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sinclaire comments on Bitcoins are not digital greenbacks - Less Wrong
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I could agree with you if people were rational but they aren't. People need incentives to do what is rational and deflation provides those incentives by rewarding the rational and punishing the irrational. You can spend in a deflationary currency but if you spend on stuff which isn't worth it then you get to experience buyers remorse or guilt over all the money you could have saved if you had not bought that Pizza. I think that is a really good thing because it makes people give considerably more thought into their investments.
And you're right if people are saving rather than spending it means products aren't good enough. And most products truly aren't good enough which is why people are sending that signal. Businesses who need capital in the Bitcoin world can get it from USD which is inflationary. There is plenty of credit and cheap USD money that angel investors can supply to Bitcoin businesses. This is why USD and Bitcoin will have to co-exist.
This is an example of why I don't like deflation, at least not for the economy as a whole. It makes you get buyer's remorse about things like pizza, which actually are a pretty good deal in some situations. You can get fed without having to make food, you can arrange a party without hiring a catering service. The time spent by humans on making the pizzas is drastically reduced on a per-pizza basis because the pizza maker has specialized tools and skilled personnel.
So to me the fact that it discourages people from buying pizza is a sign of economic inefficiency. If they were not buying pizza in a market where the choice to hold onto your cash does nothing aside from retaining the ability to make other purchases, it would be a clearer signal that pizzas are not needed, that other things are more important.
Not really. There will be people who like to eat. There will be morbidly obese people who will eat until a heart attack. But there is nothing fundamental about pizza that it's essential to the planet, the survival of the species, the sustainability of the environment, or staying happy and healthy. If it were important then people would buy more pizza, such as if pizza were shown to extend human lifespan then yes people will buy a lot of pizza. But if pizza doesn't do that but vitamins do then people will spend Bitcoin on expensive vitamins instead of pizza but the Bitcoin will always be spent.
Pizza almost certainly would not go away even in a deflationary economy. If anything, more people would spend time creating pizzas in their own kitchens. This would take away from their hours previously available for leisure, education, and jobs. This is just one example of how deflation could make people act in less efficient ways, by relying less on mass production and economies of scale.