Quote from: sana54210 on September 18, 2021, 09:05:35 PM

Why do people still hold dollars if they believe it will lose value constantly? That is what dollar is (and all other fiats), because of inflation the value of dollar will ALWAYS be lower and lower in the long run. Then why do people still keep holding dollars in their bank accounts, shouldn't they spend it as soon as they get it so they do not lose value?

People still do hold it on savings accounts and all that right? Because that is how people invest, well at least some people do. Plus bitcoin is a currency as well, you may spend it, but you may also earn it as well, if you want to survive then you gotta pay for bills or food or whatever and that means you HAVE TO spend, not just because you want to, but because you have to.

I'd like to answer your question about why people hold their dollars in spite of inflation. The short answer is the dollar is the most liquid asset there is. If there is an emergency, people can spend their money without any fuss or muss. No one will accept your FAANG stocks or your real estate if there is a panic. They are illiquid and are subject to depreciation during a major collapse and uncertainty. The dollar is the answer, everyone will accept it because it is liquid, highly divisible, easily transportable. The only major problem with fiat currency is that it doesn't retain its value for long. That is why people are hoarding gold, however, gold is poorly divisible, hardly transportable, and easy to confiscate, nobody wants to run around with bars of gold. Bitcoin is another option, it retains value over a long-term horizon and is easy to carry, however, it is likely illiquid during an emergency situation. Conclusively, there is no perfect solution, you should try to make use of all three options to alleviate the uncertainty that the future brings.