consider that in an economy with a #Bitcoin hard cap
the more economic growth there is,
the more people are incentivized to hodl.
because their hoarded purchasing power increases in direct proportion to the growth,
but without any PoW on their part.
what is the natural result of that incentive structure?
that people only spend on things they need and are less focused on consumerism while prioritizing art beauty and family. I'd say that a fix supply would be ideal but their is no such thing as the perfect in our world. 0.6 is how we fund near perfect money. bitcoins model is yet to be shown effective after the subsidies go away
a fixed supply is neither necessary nor desirable even if it does work without the block subsidy (a separate problem).
on a social level, we still want capital to get deployed. a .5% annual supply inflation creates a slightly looser environment and is better overall for human flourishing.
"as deflationary as possible" said absolutely no economist ever.
seems like they got stuff done well on the gold standard. would you not say that was a deflationary environment?
actually Austrian economics would say that wouldn't it?
gold has 1-2% annual supply inflation.
gold has been a stable SoV for thousands of years and it is proof that a hard cap isn't necessary or good.
most of the economist that would espouse your line of thinking would say that gold is deflationary and is bad for the economy. If we had gone through all the productivity gains from automated machinery on the gold standard from the 30s to the 80s it would have almost certainly been a deflationary money as the economic output exceeded 1-2% growth. Just because it has been a SoV for that long doesn't obviously point to a harder money being bad does it?
sure, makes sense. but I didn't say there was anything wrong with deflation.
I'm just saying that setting up a permanent "as deflationary as possible" economic environment is obviously not ideal.
People should be incentivized to save. That’s the point. And if everyone is productive and saving, it will benefit all those that are productive and saving equally. No one is benefiting at the cost of anyone else except if they were unproductive or not saving. And people still need to pay for food to eat, gas to commute, etc, so the economy will be chugging along. In fact, I would argue, as the value of Bitcoin increases, people would be more incentivized to spend their Bitcoin because they can afford more things. That’s why every time the price pumps, it hits a wall as new sellers come to market that weren’t there at lower prices.
