Quote:
Originally Posted by JoshGirls Josh
the fact that BTC has a preprogrammed limit on the expansion of the currency makes it non-viable as a stable medium of exchange. its price will be forever volatile & unsuited as a store of value. great for gambling. useless to store wealth.
the gold standard failed. Gold is a limited supply commodity & causes hyperdeflation/hyperinflation during boom & bust cycles. The economy creates wealth, thus the demand for dollars grows, but the supply of money stays the same, so the value of money skyrockets. The value of goods collapses as the currency becomes super valuable.
look at silk road. as BTC goes from 100 to 700, an eighth of bud collapses in price. the price is 1 BTC/eighth in march & now its .09 BTC now. But producers still have their costs so when they can only get .09 BTC, they have to sell far more to get the money. its great if you are long BTC but terrible for goods valued in BTC.
This is why the federal reserve was created & the gold standard passed away.
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Gold failed because you can't carry it around and trade it in micro grams easily and as tied to US dollars Nixon didn't want to payback the gold to the International investors and took us off the gold standard.
Bitcoin you can trade to .00000001. So 21,000,000 bitcoins at a value of $1,000,000.00 per coin, a bitcoin can still be divided into small enough amounts to buy a piece of bubble gum with.