Post
Topic
Board Economics
Re: Bitcoin Loans and Lending; The Weakness in The Bitcoin Economy
by
JoelKatz
on 14/07/2011, 06:28:28 UTC
Why would you ever want to hold an inflationary currency versus a currency that isn't? If someone has the option between using an inflationary currency or a deflationary one, why would they ever choose the inflationary one? I mean you personally.
Provided both were predictable, it wouldn't make much difference.

Quote
OK like this scenario: 40 years in the future the US dollar is still being inflated, while bitcoin is fairly stably deflating (and it is not subject to the large swings that it is having now). Would you want your paycheck in US dollar or in bitcoin?
A rational person would have no significant reason to prefer either. In both cases, adjustments to the amounts would be needed to keep the real payment constant. In both cases, the recipient could freely interconvert between currencies. In neither case would keeping the currency as currency be likely to provide the best investment return.