Post
Topic
Board Economics
Re: Is Inflation Necessary
by
Fortify
on 30/04/2024, 20:13:07 UTC
The bitcointalk forum is comprised of diverse people from all over the world. Our countries' must have gone through inflation as a nation at least once or more since its history. As a refresher, inflation happens when the prices of goods and services rise and people can no longer afford those items because the country's money almost becomes useless. But is inflation needed? Why can't we just keep the currency at the same value? And why does it only happen to money? For example, the same wouldn't happen if we used gold as a currency instead. Is inflation a ploy that the government uses so people don't get rich off of savings?

People who tout the gold standard simply don't understand it. It had a purpose and fulfilled that purpose at one point in history, a time when things were much simpler than they are now. However it would be unfit for that purpose today because there is too much transaction activity. It's the same problem with bitcoin - it can fill a niche, but is not a direct competitor to things like credit card transaction networks that can keep track of much higher volumes of activity in a much more efficient way. It's nice having a decentralized currency but it is restricted in certain ways.