I would like to provide my thoughts in this aspect

Yes, while mild devaluing of currency is isn't a problem, it doesn't stop there. What generally happens is that Governments print a lot of currency to fill in the fiscal deficit or give money as helicopter money which leads to heavy inflation. While Zimbabwe is an exaggerated example, it is important to learn from their mistakes. Moreover, Bitcoin isn't just an asset. It works as a currency as well and can be used to transact with other people.


I hope you are aware that Bitcoin that are issued keeps reducing and stops in 2140. So, the issue of Bitcoin happens at a slow sustainable rate and hence it doesn't get devalued. Further, once everyone has bitcoin, we may see a day where all transactions happen just over Bitcoin.


It's a free world. So people can hold their preferred assets. Bitcoin, as a medium of exchange, will only facilitate in the transaction. You can't eat bitcoin or wear bitcoin. Or did you have some other point here?

I hope I was able to contribute to the discussion, would be happy to have your responses and have a healthy discussion around this.

If you could choose to store value when you are not using it in either a depreciating currency or an appreciating asset, which would you choose?

It seems the logical answer is to store it in an appreciating asset.  If that's so, then why do people store any value at all in cash or cash equivalents such as checking or savings accounts? I suspect it's due to a need for liquidity and the friction and costs associated with moving value from an appreciating asset to the currency when they need/want to use some of that value for a product or service.  There are both costs and delays involved. Therefore, people hold some of their value in cash, and then replenish that from an asset when the cash balance runs low.  If I want to fill my fuel tank with gasoline, I can't spend my real estate, or my precious metals, or my fine art, or my stocks, etc.

However, imagine an appreciating asset that can be spent as cheaply and as easily as cash.  No need to sell off a $100,000 painting when you want to add $100 of fuel to your car (and then figure out what asset to put the remaining $99,000 into).  Instead, just rip off a $100 corner of the painting, and hand it to the gas station attendant.  Ok, that isn't going to work with fine art.  But, how about with an appreciating asset such as Bitcoin.  No need to sell an entire $35,000 bitcoin, just send the fuel company $100 worth of your bitcoin and move on.

One big reason that crypto is so amazing and is likely to eventually become mainstream is BECAUSE the preference for most individuals is for most money to be in assets, and having all the value that would have been in cash in crypto such as Bitcoin instead allows the individual to keep more value in assets while avoiding the costs and delays involved with other asset classes.

Once everyone is storing all the value for their short term needs/wants in Bitcoin, and most merchants are accepting Bitcoin as payment for products and services, there is no longer much need for cash as a currency any longer.  We aren't back at square one.  We've moved on to square two where the depreciating currency is abandoned by most people for most purposes, and is replaced with an appreciating asseet that can be used as a currency just as easily.

this part makes no sense. first of all bitcoin is not like gold, stocks or real estate. you can't use any of those "assets" as payment, for example when you want to buy a cup of coffee but you can do it with bitcoin. and in your scenario when everyone has bitcoin they will be accepting it as payment.
when they keep printing money you shouldn't care anymore as you already have bitcoin that appreciates in price or keeps its purchase power.

One thing which hasn't been touched on yet by the replies above is that keeping your money in assets instead of fiat is not always possible. It might be easily done for relatively well off people in relatively well off countries, but it is out of the reach of a huge proportion of the global population. Huge numbers of people from poorer countries are completely unbanked and live solely on cash. Billions of people are in poverty or live paycheck to paycheck, and may only have a very small amount of savings (if any) to their name, which they need instant access to for emergencies. How are these people supposed to buy gold, stocks, or real estate? It is nearly impossible. However, even a few bucks in cash can be fairly easily traded for bitcoin, and it requires no bank account, no ID verification, no third party custodians to turn you down or refuse your purchase.

And, as pointed out above, these people may not need to worry about trading bitcoin back to cash for emergencies, as they can potentially spend their bitcoin directly.

Generally, it would have been a nice argument only in case of full fiat substitution with cryptocurrency that has a limited supply, which we all know isn't happening anytime soon.
You're right that it would be just as good as keeping your wealth in other assets to avoid devaluation, but the main advantage of crypto here is that it's easier to purchase. You can buy different types of coins (3-4 most reliable, just in case) within minutes, and if you happen to need the money right away you can sell it just as easily, with a minimum loss, which would be basically determined by price volatility and transaction speed. What about other assets? Do you know how to buy and sell some gold or real estate just as quickly and easily?

Yes, but saving is a good thing. It reduces risk.

Typical Keynesian economics views any deflation as a serious problem, but deflation is no worse than inflation in my view. When people talk about the risks of deflation, they typically leap to hyper-deflation as if it is a foregone conclusion. But, I believe that is no more valid than the idea that any inflation will inevitably lead to hyper-inflation.

20% of the money ever printed was in 2020.... I don't even have the time to calculate 2021.


Enough said

I don't think so. People already keep significant amounts of their wealth in cash, fiat savings, or fiat equivalents, and I don't think this will change.

If bitcoin reaches the stage of a truly global currency, then yes, it will still appreciate, but at a much slower relative rate than it has done historically. $1,000 to $100k is a 100x gain, but $100k to $200k is only a 2x gain. We are completely spoiled at the moment with bitcoin being the best performing asset for several years, but at the stage of it being a global currency, I expect the slow appreciate in price will be able to be outperformed by a number of other investments, notably real estate and the right stocks or shares. People will always be looking for the optimal returns, and people will always want to diversify for risk reduction.

The deflation due to the reduction of supply (permanently lost bitcoins) will be slow. I doubt that more than 1% of the entire world's wealth will be lost in bitcoin transaction mistakes.  Stocks, bonds, and other investments generally have a much higher rate of return than that.  When a business is using bitcoin to purchase stuff, and accepting bitcoin for the sale of stuff, and holds bitcoin on their balance sheet, then any increase in the value of bitcoin (due to deflation) will increase the value of the company IN ADDITION TO any profit the business generates from the products or services it provides.  Therefore, investing in a business will be a way to increase the amount of bitcoin that you hold.

As such, I expect that funds beyond those which an individual needs immediate access to will still be invested into growing the economy (and one's personal net worth).

Remember that, right now, people still think about value in terms of their local currency.  The fact that 1 Bitcoin used to be the value of a Big Mac and is now the value of a new car isn't how people think of it, they think of it in terms of how many dollars (or euros, or yen, or rupees, etc) the Bitcoin is worth.  When Bitcoin is ubiquitous, people won't think as much about how many dollars their bitcoin can get them (since it won't matter). Especially if that value (relative to the things it can purchase) is growing at a rate of 1% or less per year.  Instead, they'll think about their net worth in terms of Bitcoin itself.  Growing one's net worth will mean growing the amount of Bitcoin one holds.  That can be accomplished by working a job that pays bitcoin, and spending less bitcoin than you earn.  But it can also be accomplished by investing some of that unspent bitcoin in a business and sharing in its success.