I convert my bank deposits to cash before spending it. It's not like there's cash in a vault with my name on it, I ask to withdraw cash and my checking account is debited. Doesn't seem so different than an exchange.
It’s entirely different, because you are transacting in the same currency without an exchange mechanism required.
This is important in days like today, where a coffee would cost more in BTC this evening than it would have this morning - how do I know how many BTC I have spent without referring to the current market price in USD and calculating it?
BTC seems to be about 10 times more volatile than the dollar on a daily basis. Like, last friday, the dollar was down about 0.4% and BTC was up or down 4-5% intraday.
This seems to me kind of like the argument that the government is "just" another gang of armed bandits.
There is a huge amount of value in predictable taxation rather than random robbery. Partly because of the variance, and partly because government has more of a long term interest in the viability of the citizenry, even if it weren't especially democratic per se.
And similarly, there's a huge value in a currency that gradually loses value over time rather than being up or down 5% in a day and 30% in a few weeks.
The whole point of currency is that it's not a long term investment asset, but a tool for trade, isn't it? So why would long run inflation be relevant?
Yea, but I don't have a problem with volatility. I have a problem with inflation. So, as a customer of this product, you can tell me I should want a lack of volatility. But what I really want is a lack of inflation. And indeed, your note implies that you too are fleeing cash. But I don't want to park all my money in bonds (also being printed like crazy) and houses (also being printed like crazy) or even companies (also being printed like crazy). I'd like to just park it in the IOU-form I earned it in without having it's value stolen or being forced to invest in something being printed like crazy with all sorts of complexity of risks (e.g. debt filled companies, real estate I have to rent or something). Just to have my money not lose value and for me to be able to spend it without someone being able to stop me. And it does that. I'll take the volatility.
My experience of BTC is when people say “I don’t want inflation” what they really mean is “I want my money to go up in value”.
Which ultimately just ends up in people wanting speculation.
A bit of a generalisation, but I know plenty of people who hold Bitcoin and they all are buying it because it might be worth more in the future, and none are buying it to transact in Bitcoin and use it as a currency.
Fiat is a currency that's continuously going down in value. There can be no dispute about that; it's the stated goal of nearly every central bank.
So, I don't want that. It's that simple. If you could transfer USD anywhere without audit and the US fed had it increasing in value, I wouldn't need bitcoin.
But they can't do that. They literally cannot afford to in the sense that the government they're attached to does deficit spending and the bond market isn't enough. They have to print. Not only must they print, but the spending that causes them to do it is heavily military. They're buying the tanks and planes they used to start wars for as long as any of us have been alive (Korea, Vietnam, Iraq, Afghanistan, etc.) Thus, every dollar I keep in my pocket is a continuous loan to their war machine; it loses value and that value goes to buying bombs.
I'm not participating any more. I'm taking my barbies and going home. Before BTC, there was no where to run to. Now there is. No more fiat. Long live deflationary, un-censor-able, distributed crypto currencies.
> My point was this is the wrong focus, because of what currency is by nature.
Ah, fair enough. That said:
> I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
This only works if you have a effective means of prohibiting (any) interest on those loans (ie anti-usury laws that actually have teeth). Otherwise the lender just bakes inflation into the interest.
I don't know if you are American, but it's common here to have 30 year fixed rate mortgages. I gather that's rare most other places. So I'm supposing a typical scenario where a person borrowed or refinanced recently to lock in very low inflation expectations.
That said, there are variable rate loans, but last year some lenders were actually offering such loans at a noticeable discount to prime (albeit with a floor that is above prime for now).
That helps a little, but relies on lenders underestimating future inflation. If they can predict X% inflation, they can price that into the initial fixed rate. So it's useful for making damages due to usury less variable - which is helpful for the same reasons insurance is helpful - but it doesn't usefully reduce them.
(I’ve got an idea, and I think the answer is speculation….)
Converting BTC to Fiat and then spending Fiat isn’t the same as buying things with Bitcoin. It’s buying things in Fiat with extra steps.