Quote from: xxjs on September 04, 2013, 12:04:51 AM

Quote from: DeathAndTaxes on September 03, 2013, 09:57:25 PM

ITT I see people confused wealth with money supply. Nobody rich has any significant portion of their wealth in currency, they have their wealth in appreciating assets (companies, bonds, equities, commodities, royalty contracts, precious metals, etc). Even if Bitcoin replaced all forms of currency on the planet it would still be a small % of the wealth in the world. The Bitcoin "rich" would diversify into other assets and the distribution of the money supply would become more diverse.

The total global wealth is ~$233T.
The total global currency (M0) is ~$5T.

Say Bitcoin replaces all other forms of currency (a pipe dream) and the value of all Bitcoins is is someday worth ~$5T. Lets also assume the richest Bitcoiner alive has 10% of that or ~$0.5T worth. Yes $500B is a large amount, but it is <0.2% of the world's wealth. That would also assume the "Bitcoin rich" never exchange Bitcoins for goods/service or other fiat currency along the way. I think it is hillariously funny to imagine some fiat broke, Bitcoin rich guy living in his mom's basement refusing to liquidate 10% of his coins because they are "only" worth a million USD "but mom someday I could be a trillionaire, how stupid would it be to sell now for mere millions".

Good arithmetic here, but: There is a reason the welthy, and most other people for that part, have little money and lots of stuff. The reason is the inflation. What you call appreciating assets, is mostly inflation-safe assets. With sound money it is different, you don't have to panic buy these assets, therefore the demand for sound money might be higher than for fiat money, supporting a higher money value.

Yeah, maybe. But not only. Money doesn't do anything until you spend it. If you have companies and assets, you can do things with them. Very few people want to sit there on a big pile of wealth and watch television. People become wealthy and powerful because they like being wealthy and powerful, and exerting that power to arrange the world to their advantage. A big pile of bitcoins might help you do that, but it's not the end in itself. At least not for most people, I would guess.

That I think is a rarely expressed reason for why the argument against deflationary currency falls down, apart from the fact of "needing to spend". It assumes a "rational economic actor" that just wants to maximise. People are a bit more complicated than that. Yeah sure, maximisation of wealth is important to a lot of people, and especially for the type of people that claw their way to the top of the heap. But it is no way the only thing driving people. That's why a lot of people don't tend to stop at the point when they can do buy whatever they want. The exercise of power that huge wealth gives you is an end in itself.