Oddbean new post about login | logout when you talk about inflation ; do you consider assets as part of the basket ? asking cuz that's not a right approach ..
the purpose of currencies is to make sure commodities don't catch the deflationary trend .. I mean if you transacted in assets ( gold or btc) ; the mass manufactured commodities would soon hit the rock bottom. Because commodities are the lowest value per unit .. which means no incentive for producing wheat unless it becomes scarece. you don't want people to fight for food .. Thus comparing assets to currencies ain't a good idea .. we need to strive for better currencies (eg USD stables) as much as we strive to have sound assets ( eg btc) Assets and Currencies are two wheels of a cart .. it is efficient to run economy on two wheels rather than just one ! Sound Currencies protect the poor. Sound Assets support the rich . Both are necessary . Keyword here is "sound" - corruption is possible in both .
Even a sound currency ( say USD) is by definition permissioned , censored and without consent. As opposite to a sound asset which is quite the opposite. Through controls, currencies bring stability to commodity prices .. to allow long term investment in commodities irrespective of demand forecasts. They provide credit and liquidity in market place. And most importantly, they fight deflation. Arbitrary controls allow the issuer of currency to navigate the economy in a desired direction - good or bad depends on the driver .. some currencies will fail sooner .. good will last longer .. but ultimately they too must evolve or die. Store of value is supposed to protect the wealth for longer horizons .. time scales of thousands of years plus .. eg Gold . It too must evolve but that evolution cycl s in the range of thousands of years . eg Gold is now evolving into digital form BTC .