Intro: This article is about bitcoin, NOT cryptocurrencies in general.
Bitcoin investors like to think that they are revolutionaries. I'll give you this quote from Yanis Varoufakis, an economy professor, founder of DiEM25, and one of the figures hated the most by EU establishment:
Deflation rewards the patient just for being patient, rather than being a reward to costly searching activity. Under deflation everyone benefits from waiting and aggregate demand thus collapses (penalising us all). If, under such deflationary circumstances, monetary policy cannot be loosened up to stop the decline of average prices, wholesale disaster is guaranteed. This was the terrible flaw of the Gold Standard, in the mid-war period. It is the Achilles Heel of Bitcoin today and, indeed, remains a design fault of the Eurozone too.
I have seen some comments that claim how deflation is actually a good thing and that it reduces the prices and consumerism in the end (hence protecting the environment). Anyone who claims this clearly hasn't studied economy. The level of ignorance in some comments on Reddit truly shocked me. Wages in a deflationary scenario will fall faster than the consumer products, weakening the poor even further. I take the argument that reducing consumerism could be a good outcome; but the way bitcoin establishes this is problematic. Reducing consumerism should be done in a different way.
There is a reason why people moved from gold to fiat currencies, just like there is a reason why people formed governments (we might have corrupted the concept of government but the idea makes sense, it's the same idea as blockchain actually!). "Hodling" is very popular in bitcoin proponents. It might be a good investment strategy, but hoarding an asset without an intrinsic value against the assets that do have value is problematic for the whole society (I can't believe that I have to explain this clearly). In addition, reduction of buying is good; but poor have basic necessities every month which they will cover with their few bitcoins, ending with zero coins every month; while rich, after spending few bitcoins on the very same necessities, will not only remain with a significantly larger amount of coins, but also those coins will be valued much higher thanks to a longer survival timeframe. The result is rich getting exponentially richer, while poor getting poorer every month.
This brings us back to the question in the title. Who is bitcoin for? Is it a good utility tool for the society? The answer is no unfortunately, bitcoin isn't a good utility tool for society. Due to the reasons I mentioned above, I think bitcoin is only for investors, who have enough money to cover their basic necessities and even daily luxuries; and then they have enough money "they can afford to lose" that they put into bitcoin. Because before bitcoin implodes due to its dangers for the society, it might as well reach $1,000,000 price mark.
PS: As I stated in the beginning, the arguments in this article are not valid for all crypto-currencies. Many coins overcome bitcoin's shortcomings.
