Sleeping beauty Bitcoin wallets wake up after 14 years to the tune of $2B

Personally I think that this can be considered on the "bug" side of Bitcoin's finite number coins: if, over time, they are lost, then there's a smaller quantity† of currency that is useable to actually do stuff with.

This can make the 'rate of deflation' that occurs worse:

* https://en.bitcoin.it/wiki/Deflationary_spiral

* https://isps.yale.edu/news/blog/2014/06/the-perils-of-bitcoi...

* https://crypto.bi/deflationary/

† I am aware of satoshis.

When I listen to Bitcoin discussions, one of the advantages people bring up is that there is a limited number of it and you can’t just “print” more.

Considering this, while it is true that all this makes deflation worse, I’d assume most bitcoin hodlers would not mind this.

It is under-appreciated that inflation actually is desirable in a working economy.

Look at it this way. If your money (in money form) is worth less tomorrow than today, you are incentivised to spend it, thus fueling economic activity of all sorts (from going out and buying a drink to buying a car, traveling, investing). If your money is worth more tomorrow, then you are incentivised to tighten your belt and not spend for as long as you can. At scale, this negatively affects production, economic mobility, and so forth; the rich get richer and hoard the money. I do not believe any of today’s economies can be healthy and competitive (or even functional) with a deflationary currency.

This argument falls apart when you consider technology though. And even daily essentials. No one would not buy food and water because they can get more in future. They need it now.

The same goes for technology. We all know next year’s iPhone will be better than this year but we still buy them…because we need them now.

I’d argue inflation’s incentives are worse - the constant need to invest/spend so that your money doesn’t lose value. It means money flows into anything and everything like zombie companies, over consumption, property. Those on the poorest end are just trapped because as soon as they get any money it starts depreciating.

> We all know next year’s iPhone will be better than this year but we still buy them

Next year’s iPhone will not only be better, but also (even with the same price tag) cost more, inflation-adjusted. That factors into the decision to buy now.

> I’d argue inflation’s incentives are worse - the constant need to invest/spend so that your money doesn’t lose value.

It is a problem when it is at extreme, like in unstable countries where money can be a liability to unhealthy degree. However, I’d argue it should be a liability to a smaller degree.

What you highlight is the ever-present conflict between personal benefit and societal benefit. Obviously for an individual it is more preferable that the value of their money increases; I would never argue that. However, for society as a whole it is more preferable if the value of money decreases at a stable rate.

Perhaps this is why all major economies settled on the idea that an amount inflation is crucial to have.

I do not buy into the idea that “everyone did it then it must have been a good idea”.

We’ve already seen the negative side of fiat currencies in how they eventually collapse (Zimbabwe, Venezuela, Argentina) and even in more developed countries wages have not kept up with inflation. Money is trending to zero People are trending to destitution.

We saw it recently in the UK - where public sector workers were not given pay rises because the government argued it would fuel inflation. So how does that even make sense.