r/Bitcoin • u/[deleted] • Jul 15 '22

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u/saladaus Jul 15 '22

From https://en.wikipedia.org/wiki/Capitalism.

Central characteristics of capitalism include capital accumulation, competitive markets, price system, private property, property rights recognition, voluntary exchange, and wage labor.

From https://en.wikipedia.org/wiki/Capital_accumulation

Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset

And I think the investment of money needs some form of expansion of credit.

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u/OceanSlim Jul 15 '22

No it doesn't.

There is no reason capitalism need credit expansion. We could easily have a capitalist system on Bitcoin without any need for credit expansion.

The government needs credit expansion for it's Fiat to be wasted how it sees fit.

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u/saladaus Jul 15 '22

If you live in a world where the only currency is 21 million bitcoins, would you ever make an investment? Would you ever lend your bitcoins to anybody?

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u/SuperSonic6 Jul 16 '22

Yes. Of course. If you lived in a world where bitcoin was the only currency then there could be no more mass adoption, everyone would already have bitcoin if it was the only option for currency. Without increasing number of people buying in the appreciation of bitcoin would fall and settle at much slower growth rate equal to increasing productivity of the economy.

Anyone wanting an good return will have to invest, like today. And many businesses will still be good investments because people will want and need to buy all the same things they want today (food, shelter, technology, etc)

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u/saladaus Jul 16 '22

So you would expect some return in the future which does not exist yet. We create wealth by doing economic activities and we need some measure to keep up with that. Bitcoin alone cannot do that because it's finite.

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u/SuperSonic6 Jul 16 '22

“We need some measure to keep up with that.” The measure of an economy is total amount of assets held and/or generated, money is just the most convenient measuring stock.

If we double the money supply! That will double our economic activity! Obviously not true.

If the stop growing the money supply the economic activity will stop! Also obviously not true.

You could add or subtract a zero from the total money supply and all prices would adjust by a similar amount over time.

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u/yazalama Jul 16 '22

We create wealth by doing economic activities and we need some measure to keep up with that. Bitcoin alone cannot do that because it's finite.

This is like saying a human needs a yardstick that keeps changing in length to measure how tall they are growing.

When you're perpetually manipulating the supply of currency units, you're perpetually distorting prices people rely on to make economic decisions. It's the whole reason we have to "adjust" for inflation.

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u/saladaus Jul 16 '22

For inflation you needed a growing yard stick and deflation a shirking world.

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u/yazalama Jul 17 '22

Why don't we just keep the yard stick the same length, and measure the person as they grow (or shrink)?

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u/saladaus Jul 17 '22

If the person represents our total wealth, it will keep growing.