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    I think blockchain could potentially revolutionize banking: not because blockchain is a good idea (I think it’s silly), but because it makes things like “updating your legacy systems” and “having good interopt with other systems” sound cool and trendy. Tricking banks into eating their vegetables =)

    Microsoft accepts bitcoin for payments on its online store

    This is misleading: it only accepts it for buying games and apps.

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      I know nothing about economics. One thing I know - besides that a currency is only worth what people’s sentiment about it’s backer is (how liquid it is) - is that inflation is one of the key drivers of growth. If you think sitting on your pile of monetary instruments is going to make you richer, you’d rather sit on it. If people told me that my $1 today would be worth $2 in one year, I would hold. Instead I’m told that instead it will be worth $0.9 and if I put it in the stock market it will be worth $2 - taxes, so I do that.

      Governments also can influence the economy by printing more or less money. When done sensibly this can cushion the boom/bust cycle which has been with us for ever.

      What is the corresponding incentive in Bitcoin for spending bitcoin as opposed to hoarding it?

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        The wealth effect. It’s the idea that as people become richer they will spend more.

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          Note that inflation is a bad deal for low-income earners who can’t afford investments as well as lesser-clued people who choose not to.

          Maybe the best case against inflation is that because it narrows down on investments, we need inflation to keep startup bubbles and shit going, so we don’t have even more people in poverty.

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            Inflation / deflation is tricky.

            Most everyone agrees that in a society that depends on credit to function - i.e. ours - deflation is bad. Not only does it disincentivise pure spending/investment, it also raises real interest rates, making existing debts very expensive to service.

            Too much inflation is bad too, because people will hesitate to lend money if they can’t get a decent return over a longer timescale.

            Moderate inflation is generally accepted to be a good compromise - people are incentivized to invest money in other ventures than just interest-bearing instruments, and it also keeps real interest rates manageable.

            You know who doesn’t like inflation? People with lots and lots of money. When you’re part of the 0.1%, there’s simply not that many ventures that give a positive rate of return that will beat inflation slowly eroding your net worth.

            Before people thought long and hard about this, credit crunches, booms and busts were just a fact of life. Then smart people realized that they could guide/manipulate the money supply and interest rates and thereby keep the variable “inflation” at an optimum.

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              (I meant to say deflation up there, that’s what might disincentivize investments)

              The smart people did us all a real big favor with negative interest rates and all that, for sure. People here buying up apartments at ridiculous prices because the rates are so low. I mean, folks get tired of waiting when it’s taken a decade of crawling economy to buy a home. Especially when the media says we’re out of trouble though youth unemployment is in the double digits.

              The smart move might still be to rent and invest on something that’s sure to give huge returns by retirement.

              I’m sure there’s something out there worth investing in. Surely a pension plan has never failed anyone, just as inflation and interest rates, national debt, regulation and laws have never failed, because smart people (voted in by smart people in total agreement) thought about them.

              Waiting for the troll downvotes, but I’m not entirely wrong on this.

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                I’m not saying you’re wrong. There’s a lot of things that are dysfunctional in the global financial system when looked at certain axes.