Here is the retained purchasing power of each of the coins since the law was passed in September 2021:
Legal tender 1: -15%
Legal tender 2: +115%
Guess which one has been deemed a "Failed experiment".
replies(4):
Do you see the absurdity?
The point of legal tender is that it reduces in value slowly over time, so you don't just hoard it under your bed. If someone paid me in BTC, I wouldn't spend it, I would hang on to it. That's not how currency works. Currency is the thing you want to spend, not hand on to.
and they both can share the same unit of account.
The Unadulterated Gold Standard articles have a more detailed discussion of this.
https://singlelunch.com/2020/10/21/badeconomics-putting-400m...
But to answer your question more directly, you should use a money that loses value because its purpose is as a medium of exchange and not a store of value. You need to have something in your life that you can reliably use to acquire things you need and exchange them for things you have (new laptop for hours worked). You want a hot potato, you get it, you pass it along to someone else. If you don't want to spend it on material goods and want to save, that's fine, you can instead "buy" a savings, or "buy" an index fund. You're still passing the hot potato around, but its giving you different things.
Now imagine you don't have a hot potato, you work and you get paid in... idk, something you don't want to get rid of. You struggle with letting go with your currency and so it costs you when you're trying to do exchanges. Similarly, if you're a shop owner or something, people are more hesitant to give you their currency as well. Things get slower, and darker, like a mechanical flashlight that you're spinning slower and slower.
That's an odd definition of money. The ancient Greeks already thought that money is medium of exchange AND a store of value, and throughout history people have preferred money that held its value. It's also circular reasoning. A medium of exchange should lose value, so you should use money that loses value.
> you can instead "buy" a savings, or "buy" an index fund
So money that loses value creates inefficiencies in the economy, because people have to waste time worrying about preserving their wealth, investing, etc.
> You struggle with letting go with your currency
I still need to eat, to live somewhere, I want to experience things, a money that increases in value does not destroy my desire to consume.
I'm also not sure that's a circular reasoning as I provide the reasons why you want a medium of exchange that loses value...
Hmmm... sure, I suppose you can look at it that way. In an inflationary-esque economy, you worry about saving your wealth, so you create instruments to do so: fractional reserve banking, mutual funds, etc. This is a problem with many solutions. On the other hand, in a deflationary-esque economy, you worry about spending your wealth, and perhaps more importantly, getting everyone around you to spend it as well. That problem has less solutions.
I said you struggle, you don't hold on forever, you struggle letting go. As in you eventually do let go, but not as quickly as if it had been depreciating. It functions as a brake on consumption, not a full stop. It slows things down. Slow is not good. Things start to go down when things slow.
Well the point of money is to use it at some point, your theory is right if people were to live for the infinity but we don't so at some point you will spend all your hard earned Bitcoin because you just don't want to die rich but live rich.
That's the basic reason why all this nonsense about how bad having an deflationary economy is crap. People spend at some point their money, they don't hold on to it for ever.
At some point a balance between reward (money taking more value) and loss (time spent starving, not benefiting from your assets) is reached.
I sincerely don't know anything about monetary policy, but I can't imagine that sort of volatility in the value of your currency is considered a good thing.