It's not because its "scarce and deflationary"
its because it's as scarce and deflationary *as possible*
and as a result
capital investment and purchases are also discouraged and deferred as much as possible
this is a knee-jerk reaction to fiat insanity.
not a sober design for good money.
I don't think it is that bad of a design.
First of all I'd argue most of consumerism would vanish under the inelastic supply of a bitcoin standard.
Unfortunately western civilization restructured itself around debt and we need this kind of harsh wake up call.
That means going back to the essence of money: buying houses, buying food. No more gambling, no more hedge funds.
Moreover, inflation rate in itself doesn't really matter nearly as much as the consensus around it. Are halving cycles that much different from tail emissions? I view halvings as decreasing tail emissions.
Either way what saves us is that it isn't possible to issue debt out of thin air. We need bitcoin as SoV, Monero as MoE.
its not as bad a design as arbitrary inflation.
but that doesn't make it great either.
āAs possibleā is a subjective opinion. We are just arguing semantics at that point. The most deflationary money as possible would be one where the supply shrinks exponentially until its supply is near 0. Bitcoins supply is hard capped, gold inflates at 2%, shitcoins add and burn coins at the whim of a board of directors, and fiat inflates at whatever 12 bankers decide. So my summary is: Savings and deferred spending is still a type of investment, capital investment would still occur under a hard money standard, and yes, a money that deflated to a supply of near 0 āas deflationary as possibleā may not be desirable either.
That isn't what deflationary means.
"Deflationary" just means that the number of monetary units grows slower than the economic activity it represents.
As with Bitcoin, have a static number of monetary units that represents increasing growth.
So in that case, how is "as possible" subjective?
When we cap the number of monetary units we lock the Supply side of the Supply/Demand equation.
The only way to make the situation MORE deflationary is to somehow artificially stimulate demand for money.
Which I suppose is possible, so maybe a Bitcoin standard *could be made more deflationary.
But the point is
a economic based on a fixed amount of monetary units creates the maximum deflationary condition.
I maintain that āAs possibleā is an arbitrary opinion. The other way besides increasing demand for money to make that system more deflationary is to decrease money supply as well. Crypto XYZ could actually burn off coins at 2% a year, making it more deflationary. Your āas possibleā statement is subjective if referring to bitcoin. Many monies can be more inflationary or deflationary than bitcoin. Bitcoin simply has a fixed supply and generally fixed rules. Decide which system rules you want to play by and act accordingly. Thereās pros and cons to different systems. Thatās all.
Ok. We aren't communicating clearly.
I am NOT talking about the money supply itself being "disinflationary" when I say a hard cap creates a "disinflationary-as-possible environment".
I am talking about the *macro economic condition*
As maxis love to point out
A standard using a hard capped money means that the macro environment pumps your purchasing power (disinflation!) to the direct extent there is any economic growth.
This is a *disinflationary* macro environment and,
if we collectively decide to use a money with a fixed number of units,
there's literally no way to make it more so.
It is consciously creating *the exact inverse of the current problem* and enshrining it as unchangeable.
