Currently there are many cryptosceptics (crypto-deniers, "no-coiners") in the world, especially in authoritarian countries, and I like to argue with such people. Below I write two simple speculations, which explain why the cryptosceptics are wrong:
The inflation is in fact a hidden taxation, and this "tax" is mostly paid by poor people, not the wealthy (because wealthy people store their riches not in the form of money, but in the form of assets like real property). And this situation makes useful any things which help people to store their savings:
1)
Let's assume that there is some completely useless and worthless product on the market, let's call it pipyruses; and everyone knows that the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation). One pipirus costs ten dollars. Then people will quickly understand that they can use pipiruses as means of accumulation: a worker will buy 300 pipiruses every month, and in ten years, having accumulated thirty thousand pipiruses, he will sell them and buy an apartment with this money. And this option for accumulation is obviously more profitable than dealing with banks, loans and mortgages.
2)
Let's say 100 programmers have created a a cryptocurrency pipycoin for themselves and agreed to use it as an alternative money (to exchange it for real money). The price of one pipycoin is 10 dollars. And once a month, each of these programmers sells a part of his salary and buys 300 pipycoins from other programmers. Then, once every 10 years, each programmer sells 30 000 pipycoins to others and buys an apartment with this money.
It turns out that for these programmers, the pipycoin is a convenient means of lending money to each other; thus, an ordinary means of exchange, i.e. money, turns into a means of accumulation, which allows these programmers to save money relatively successfully. These programmers loan the money from each other more honestly, than the banks do.

Edited May 1May 1 by Linkey

2 hours ago, Linkey said:

Currently there are many cryptosceptics (crypto-deniers, "no-coiners") in the world, especially in authoritarian countries, and I like to argue with such people. Below I write two simple speculations, which explain why the cryptosceptics are wrong:
The inflation is in fact a hidden taxation, and this "tax" is mostly paid by poor people, not the wealthy (because wealthy people store their riches not in the form of money, but in the form of assets like real property). And this situation makes useful any things which help people to store their savings:
1)
Let's assume that there is some completely useless and worthless product on the market, let's call it pipyruses; and everyone knows that the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation). One pipirus costs ten dollars. Then people will quickly understand that they can use pipiruses as means of accumulation: a worker will buy 300 pipiruses every month, and in ten years, having accumulated thirty thousand pipiruses, he will sell them and buy an apartment with this money. And this option for accumulation is obviously more profitable than dealing with banks, loans and mortgages.
2)
Let's say 100 programmers have created a a cryptocurrency pipycoin for themselves and agreed to use it as an alternative money (to exchange it for real money). The price of one pipycoin is 10 dollars. And once a month, each of these programmers sells a part of his salary and buys 300 pipycoins from other programmers. Then, once every 10 years, each programmer sells 30 000 pipycoins to others and buys an apartment with this money.
It turns out that for these programmers, the pipycoin is a convenient means of lending money to each other; thus, an ordinary means of exchange, i.e. money, turns into a means of accumulation, which allows these programmers to save money relatively successfully. These programmers loan the money from each other more honestly, than the banks do.

In practice, crypto varies wildly in value, from one month to the next. They are a purely speculative asset and do not even remotely represent a stable store of value, as you seem to suggest. They have the further disadvantage of being unregulated and opaque are thus much favoured by criminals.

There are plenty of people in stable democracies (amongst which I do not include the Unites States of America) who think they are a terrible idea. I'm one of them. And so is Jemima Kelly of the Financial Times.

On 5/1/2025 at 5:57 AM, Linkey said:

Let's assume that there is some completely useless and worthless product on the market, let's call it pipyruses; and everyone knows that the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation). One pipirus costs ten dollars. Then people will quickly understand that they can use pipiruses as means of accumulation: a worker will buy 300 pipiruses every month, and in ten years, having accumulated thirty thousand pipiruses, he will sell them and buy an apartment with this money. And this option for accumulation is obviously more profitable than dealing with banks, loans and mortgages.

How is this better than putting your money in a bank? You have $300,000 worth of papiruses after ten years. In a bank you earn some interest, so you have more.

You’re converting back to dollars at the end, so putting your dollars into a non-appreciating vehicle is the same as putting it in your mattress.

33 minutes ago, swansont said:

How is this better than putting your money in a bank? You have $300,000 worth of papiruses after ten years. In a bank you earn some interest, so you have more.

You’re converting back to dollars at the end, so putting your dollars into a non-appreciating vehicle is the same as putting it in your mattress.

The pipiruses will have a higher prices in dollars after a year, as any other goods, just because of the dollar inflation. And the dollar inflation is always higher than the bank's interest.

Edited May 2May 2 by Linkey

9 minutes ago, Linkey said:

The pipiruses will have a higher prices in dollars after a year, as any other goods, just because of the dollar inflation. And the dollar inflation is always higher than the bank's interest.

But the USD or EUR value of your pipiruses may be only half what it was when you bought them. Or they may have collapsed entirely because their founder is on the run from the police. These crypto things are not at all stable in value.

Edited May 2May 2 by exchemist

The volatility of the bitcoins is indeed a great problem, but despite this, they continue to grow on average - similarly to gold.
Can anybody here write, what is the difference between the gold and the bitcoins from the point of view of the economic theory?
By the way, Friedrich Hayek (nobel prize winner) wrote that private money would save the world economy.

3 minutes ago, Linkey said:

The volatility of the bitcoins is indeed a great problem, but despite this, they continue to grow on average - similarly to gold.
Can anybody here write, what is the difference between the gold and the bitcoins from the point of view of the economic theory?
By the way, Friedrich Hayek (nobel prize winner) wrote that private money would save the world economy.

Here you are. https://doi.org/10.1016/j.frl.2021.102379

This is about the very well-established cryptocurrency bitcoin. Importantly this study, as some others have found some inflation-hedging capabilities of bitcoin (in most studies it appreciates if folks expected inflation). However, in times of uncertainty it basically moves with the market, in contrast to gold. The conclusion is basically that it is not a similar safe-haven asset as gold.

It should be noted that average growth is not a specific benefit to bitcoin. Index funds also all grow on average. A more important issue is probably whether it will still have the value when you need it, especially in times of crises.

If you look at the wild swings of the various cryptocurrencies compared to gold, or even indices like S&P500 they do not look too reliable to me.

2 hours ago, Linkey said:

The pipiruses will have a higher prices in dollars after a year, as any other goods, just because of the dollar inflation. And the dollar inflation is always higher than the bank's interest.

No, that’s not what you said. You said the price is constant. That might not be what you meant to say, but it’s what you said.

Dollar inflation means the value actually goes down in that scenario. Plus no interest.

1 hour ago, CharonY said:

If you look at the wild swings of the various cryptocurrencies compared to gold, or even indices like S&P500 they do not look too reliable to me.

Which is why I hate that they’re called currency. One of the desirable traits of a currency is stability.

They’re more like crypto barter tokens

Here I cite myself:

the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation)

So if there was a currency which is not constantly emited or "easend" - in the currency the price of pypicoins will remain constant. However all modern money do inflate (during last 300 years, as far as I understand), so in these money the price of absolutely everything, including the pipyruses, is growing.

By the way, as I suppose, all nowadays money were firstly created in England by Isaac Newton.

Edited May 2May 2 by Linkey

4 hours ago, Linkey said:

Here I cite myself:

the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation)

As discussed in another thread, this is not necessarily the cause of inflation

4 hours ago, Linkey said:

So if there was a currency which is not constantly emited or "easend" - in the currency the price of pypicoins will remain constant. However all modern money do inflate (during last 300 years, as far as I understand), so in these money the price of absolutely everything, including the pipyruses, is growing.

By the way, as I suppose, all nowadays money were firstly created in England by Isaac Newton.

So you have a certain amount in constant dollars, but in a bank you still earn interest.

I had mentioned Hayek above. I haven’t read Hayek’s texts in detail, but I can explain this as I understand. During the last 40 years, in the Western countries the inequality grows: the rich become richer, the poor poorer, the middle class disappears. I have seen a lot of such graphs in the Web:

I am not a US resident and it is difficult for me to speculate reliably, but I have a lot of scattered information relating the subjects – some information from bloggers, some posts of the residents in the Western countries about their life – and all this information forms a general picture. Roughly speaking, 40 years ago only one member of a US family worked, now two members work, and at the same time 40 years ago the family could afford a house, now it is much more difficult.

One of the reasons of this is the inflation, as I wrote in OP (rich people store their wealth in the form of assets, not money).

Edited May 11May 11 by Linkey

On 5/2/2025 at 6:59 PM, Linkey said:

Here I cite myself:

the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation)

So if there was a currency which is not constantly emited or "easend" - in the currency the price of pypicoins will remain constant. However all modern money do inflate (during last 300 years, as far as I understand), so in these money the price of absolutely everything, including the pipyruses, is growing.

By the way, as I suppose, all nowadays money were firstly created in England by Isaac Newton.

Don’t be silly. There has been centrally issued coinage since at least Roman times. Newton was merely one holder of the office of Master of the Mint in the reign of William III (Mary having died by then). The Royal Mint itself has existed in England from the c.12th.

On 5/1/2025 at 10:57 AM, Linkey said:

Currently there are many cryptosceptics (crypto-deniers, "no-coiners") in the world, especially in authoritarian countries, and I like to argue with such people. Below I write two simple speculations, which explain why the cryptosceptics are wrong:
The inflation is in fact a hidden taxation, and this "tax" is mostly paid by poor people, not the wealthy (because wealthy people store their riches not in the form of money, but in the form of assets like real property). And this situation makes useful any things which help people to store their savings:
1)
Let's assume that there is some completely useless and worthless product on the market, let's call it pipyruses; and everyone knows that the price of pipyruses will remain constant in the future  (in a "normal" currency, which is not constantly emited and thus does not have inflation). One pipirus costs ten dollars. Then people will quickly understand that they can use pipiruses as means of accumulation: a worker will buy 300 pipiruses every month, and in ten years, having accumulated thirty thousand pipiruses, he will sell them and buy an apartment with this money. And this option for accumulation is obviously more profitable than dealing with banks

Cab you please clarify the point of this thread in one simple sentence.

Reading through your posts I find a mixture of very good and decidedly bad points so I remain unclear as to what is meant.

It may interest you to know of the Mars bar theory.

For a very long time, Mars has been recognised a a stable well run company.

Economists have used the price of a Mars bar, over time, as an indicator of the value of a currency over time.

And of course you always have to take currency ups and downs into account when thinking about inflation.

Edited May 11May 11 by studiot

4 hours ago, Linkey said:

I had mentioned Hayek above. I haven’t read Hayek’s texts in detail, but I can explain this as I understand. During the last 40 years, in the Western countries the inequality grows: the rich become richer, the poor poorer, the middle class disappears. I have seen a lot of such graphs in the Web:

I am not a US resident and it is difficult for me to speculate reliably, but I have a lot of scattered information relating the subjects – some information from bloggers, some posts of the residents in the Western countries about their life – and all this information forms a general picture. Roughly speaking, 40 years ago only one member of a US family worked, now two members work, and at the same time 40 years ago the family could afford a house, now it is much more difficult.

One of the reasons of this is the inflation, as I wrote in OP (rich people store their wealth in the form of assets, not money).

As far as the US is concerned, Reagan happened. But I fail to see what this has to do with crypto, seeing as it’s a more recent development. Bitcoin didn’t start until 2009.

20 hours ago, Linkey said:

One of the reasons of this is the inflation

How about corporate price gouging (yes, I know the term is ill-defined but is still apropos for illustration)? Since the turn of the century corporate profits have quadrupled. How many people do you know have had their salaries and compensation quadrupled?

Statista

Annual corporate profits U.S. 2023| Statista

In 2023, corporations in the U.S.

Just now, npts2020 said:

How about corporate price gouging (yes, I know the term is ill-defined but is still apropos for illustration)? Since the turn of the century corporate profits have quadrupled. How many people do you know have had their salaries and compensation quadrupled?

Interesting.

Solving 4 = (1 + r/100)²⁵ tells me that this is a compound annual rate of increase of 5.7%

On 5/11/2025 at 12:57 PM, exchemist said:

Don’t be silly. There has been centrally issued coinage since at least Roman times. Newton was merely one holder of the office of Master of the Mint in the reign of William III (Mary having died by then). The Royal Mint itself has existed in England from the c.12th.

Do you know anything about the money multiplier?

https://en.wikipedia.org/wiki/Money_multiplier

I suggest you to see this video, it explains many things:

https://youtu.be/2nBPN-MKefA

23 minutes ago, Linkey said:

Do you know anything about the money multiplier?

https://en.wikipedia.org/wiki/Money_multiplier

I suggest you to see this video, it explains many things:

https://youtu.be/2nBPN-MKefA

This seems to have nothing to do with Newton or the Royal Mint.

For those who are interested in the topic of the growth of inequality, I can suggest this article:

https://kimgriest.medium.com/real-reason-the-american-middle-class-is-disappearing-901cb78ababf

The author attributes the growth of inequality to the fact that Reagan lowered taxes for the rich in the 80s. The inequality can be measured as the percentage of the property in the world which belongs to the richest 1% of population.

The author also writes that the mainstream Western media is silent about this problem or is lying. This is evident with CNN and Fox News (especially CNN). And this can be explained simply — these 1% of the richest are interested in such a state of affairs, and they control these media.

People who care about inequality watch PBS instead of CNN. CNN is like ESPN for politics. You’re watching to see who wins, not to learn and grow. It’s like eating ice cream instead of broccoli. Go to public news for healthy inputs… at least while you still can as they get their funding gutted by ideologues and grifters.

Bitcoins are analogous to gold; both gold and bitcoins are limited in total amount, making them an effective way to store money without paying the "inflation tax". However, there are currently many problems with cryptocurrencies, such as the division into "pure" and "dirty" crypto, and I am not sure that cryptocurrencies are more convenient to use than gold. And this leads to a new question: why the gold is not growing as fast as bitcoins? Maybe buying gold is illegal in the US/Europe?

56 minutes ago, Linkey said:

Bitcoins are analogous to gold; both gold and bitcoins are limited in total amount, making them an effective way to store money without paying the "inflation tax". However, there are currently many problems with cryptocurrencies, such as the division into "pure" and "dirty" crypto, and I am not sure that cryptocurrencies are more convenient to use than gold. And this leads to a new question: why the gold is not growing as fast as bitcoins? Maybe buying gold is illegal in the US/Europe?

No it's because people and institutions hold a lot of gold already, while total holdings of crapto will be tiny by comparison. Don't confuse rate of growth with amount. The greater the amount, the more it takes to grow it at a rapid rate, obviously.

Buying gold is not illegal anywhere, so far as I know.

Edited July 30Jul 30 by exchemist