lsparrish comments on Bitcoins are not digital greenbacks - Less Wrong
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That there may be environmental advantages to deflation (and/or environmental harm from inflation) is not something I had deeply considered, but it makes a certain amount of sense. Thank you for pointing it out.
My long-term goals are to live as long as possible, to eventually establish residence off planet, and to minimize the number of people who die from preventable causes like (as I see it) aging. I think that can be done without harming the environment, but I much less sure deflation and an overall shrinking of the economy is beneficial to that goal. Stable currency that lets you send clear market signals about your desires in the form of expenditure and investment seems better.
Digital goods are already pretty popular in an inflationary economy, and I see this growing as they get better. Cleaner tech will tend to become more widespread as well, which is again a form of economic growth.
That's an okay near term perspective. Bitcoin currently serves that niche, for people who have bitcoin and view it as spendable. It could get replaced in that niche fairly quickly by something viewed as more stable. But then, digital content has little investment cost so it is plausible that bitcoin could continue to dominate there due to lack of need to borrow money for this kind of production.
It's a complicated question. But I think people may underestimate how well bitcoin has picked the low hanging technological fruit and/or how adaptable it is. Most of the cryptocurrency money is apparently in bitcoin form, and it has massive physical infrastructure in the form of mining FPGAs and ASICs supporting it.