Post
Topic
Board Bitcoin Discussion
Re: Why satoshi doesn't come forward
by
twiifm
on 13/04/2014, 07:26:33 UTC
I read that pdf and the only similarities I see between "ideal money" and BTC is a common theme of anti-inflation & anti-central banking.   The cool factor of Nash = Satoshi might appeal to "geeks" but it doesn't change the underlying weakness of BTC as currency system.   Nash's "ideal money" uses a basket of commodities (CPI) in place of a gold standard,  whereas,  BTC uses arbitrary  and artificial scarcity in the code so it "acts like gold".   "Ideal money" is closer to Keynes "bancor" than BTC.

Don't get me wrong.   The Nash is genius and I love to study game theory.   Still,  I'm not convinced that deflation is preferable.   I'm a firm believer that money needs elasticity to meet demands of the economic cycles.  

Nash spends an entire section talking about savings and why inflation hurts savings.   I hear the same argument from bitcoiners all the time.   But this rarely reflect reality of most people's lives.   Nobody saves money in cash.   Most of the middle class own property as their main wealth asset.  

Deflation puts long term borrowers at extreme disadvantage.  Deflation makes it hard for people to make big purchase like a house,  student loan,  medical bills.  

In any case the macro is more complex than the neoi classical model I'm presenting.   At the macro level,  deflation can lead to recession and depressions