Replies (26)

Not sure why it would destroy investment. Prodcuers are always looking to optimize and increase efficiency. Couple this with dimishing volatility that should come with higher capitalization of bitcoin, and people will see more value in continuing increasing production efficiency rather than just holding an asset with lesser returns netted through flat price of the asset being held.
do you run a Bitcoin business? if not, maybe take a clue from someone who does. the note says they expect to LOSE money because of Bitcoins deflationary nature. your word salad is just armchair fantasy.
"producers will become more efficient" isnt a "logical argument that stems from free market dynamics" you make it sounds like a graduate thesis. the fact is increases in efficiency will have to AT LEAST beat the rate of deflation. and as our example illustrates it isnt easy to do. Bitcoin is a deflationary SoV, why spend if you just end up with less purchasing power? inb4 "muh theoretical increases in efficiency"
Under the fiat system, standard practice, investors discount future cash flows for inflation because they know the money will be worth less later. However, with Bitcoin, the opposite happens: future purchasing power is likely higher than today’s, due to its fixed supply and increasing adoption. So instead of discounting for inflation, you apply a premium for Bitcoin’s appreciation. The result? Even if an investment returns fewer bitcoins in the future, the real buying power could be far greater. Just as we adjust for loss under inflation, we can adjust for gain under deflation. This flips the script: sound money doesn’t kill investment — it makes it more intentional, more productive, and more aligned with long-term value creation.
If we are just defining inflation and deflation based on prices of good/service going up or down, then bitcoin has inflation at least once every 4 years, HUGE inflation. I’d argue you’re more likely to spend when pricing are going down then up. I spend more bitcoin when shit is cheap then when it’s expensive in bitcoin terms.
Come on now, this isn't a rocket science, just basic macroeconomics applied to an unconventional monetary environment. You said, “except in a deflationary environment the deck is stacked against you.” But that’s not how it works. As Bitcoin matures and its price becomes more stable, its appreciation slows – just like with any large, established asset. This means the return you need to justify investment goes down. Look at like risk-free rate going down. Eventually, even modest productive gains look attractive compared to just holding Bitcoin. Deflation doesn’t punish investment — it raises the bar. Only the best ideas get funded. That’s not the deck being stacked against you, it’s the market rewarding real value instead of noise.
nobody knows where equilibrium will be reached. deflationary environments penalize spenders. its just a fact. just saying "aha! but if you create value faster than then money increases it doesn't" isnt news. it just depends on details and nuance nobody knows the answer to. like "how fast is the economy growing" and "how do credit markets work on a hard money standard" so its pointless to argue about.