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1268 sats \ 4 replies \ @grayruby 5 Jan \ on: What does credit and lending look like to you under a Bitcoin standard? bitcoin
Yes credit markets will definitely shrink as credit won't be a means of arbing melting fiat value.
It should be much healthier and reduce a lot of malinvestment.
100% co-sign this and appreciate the humble response. Beyond what you are saying is going to be very speculative. We can look to the past for ideas about how harder money worked but technology has advanced in ways that will make this different. Also, there has never been anything like bitcoin. The truth is no one knows how it will work out but we can speculate about problems that will be fixed by bitcoin.
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credit won't be a means of arbing melting fiat value
Succinctly put and I think that's the main difference. There's less incentive to "save" in the modern sense (which is really just lending), because actually saving an appreciating currency more than preserves purchasing power.
That should mean that real interest rates (interest rate above inflation) might be higher on a bitcoin standard. However, nominal interest rates will likely be lower.
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