Bitcoin also won’t put gas in your car or provide medical care for your family. To be clear, I mean this literally. I realize people have made millions and billions speculating in Bitcoin. They can use that money to buy food, gas, and medical care, but the point is that Bitcoin doesn’t actually produce these items or anything else that we directly consume.
That may seem obvious, but this simple point is important to anyone interested in thinking about Bitcoin seriously. If our economy is facing supply constraints, as was the case at times in the recovery from the pandemic recession, Bitcoin will not help address the problem. It does not produce any of the goods and services that people need.
If Bitcoin, or other crypto currencies, sell for high prices, it means that the people who hold these currencies can command more of a limited supply of goods and services. In other words, high priced crypto is a recipe for inflation, in the same way as would be the case if the government just dropped trillions of dollars from the sky for people to grab on the streets and in their backyards.
From: Dean Baker (pic)
The crypto cult has insisted that we somehow need crypto. While crypto has proved somewhat useful for paying for drugs and blackmail, no one has yet identified a legal use.
I think Dean Baker is wrong.
Crypto is a computer program that requires inputs to produce; for some reason, many love and collect it. Ergo, crypto puts food on the table for the miners and producers of its inputs like Nvidia chips, computer hardware, electricity, real estate, maintenance technicians, guards, and personnel of its mining facilities, etc. All that is taxed. Yet cryptocurrencies don't directly cause general price inflation since they operate separately from traditional money supply. However, they can influence prices in specific ways:
