What benefits does Bitcoin (i.e. cryptocurrency) offer?

Question

I really, really like moderate inflation. I live in Sweden where the interest rates just went negative because we are on the brink of deflation, and the rate of inflation we have now is far too low. We have huge problems attracting foreign attention and the swedes don't want to take out loans to invest since paying them back ten years down the road hurts just as bad as paying them now (and there's a real risk it might take more to pay them back later, if we go into deflation). It's a real head ache that's all the talk in our financial world.Getting a hold of Bitcoin is very, very hard and expensive. The value of it has deflated dramatically from when it was introduced, and despite occasional crashes, it could very well just keep climbing in value. It also has a cap, which to me looks like it would unleash a deflationary spiral that would only end once we find a new currency (like the Great Depression was alleviated when we stopped using the gold standard).But, I'm a computer scientist and I just can't stop finding bit coin supporters everywhere. It has thousands of evangelical missionaries using blogs and magazines to tout it as a means to liberate us from the bankers. I don't know, can't computer scientists be just as corrupt? It looks like dot coms with access to good cryptographic algorithms and server farms who can work in parallel could game the system even more, and once they've swept up all the bit coins they would wield more power than nation states.Am I missing something? What does bit coin bring to the table that is worth disregarding deflation? Does it bring positive GDP growth? Ease of investment? Monetary power to the people? How? And, I keep coming back to this, wouldn't all these positives be completely wiped out once the 30s come knocking deflation style?Why does this currency have so many supporters? Are everyone mad?

Answer 1

People with bitcoins are, of course, going to sell its benefits...

Bitcoin is not designed to benefit most people, just people who want the advantages offered by bitcoins and can afford to risk the volatility in the value of bitcoin. These people probably know that Bitcoins and other crypto currencies also compete with traditional currencies and complicate the ability of governments, like that of Sweden, to manage their macro-economy by monetary policy. But they choose to value their ability to hedge, etc. over the ability of others to provide stability to the people of their country.

Generally speaking, any policy has winners and losers and if the losers are dispersed while the winners are concentrated and motivated the policy tends to be stable.