If BTC does catch up, the current inequality of the world will look like an anthill in comparison to the inequality that BTC will create. I can't imagine the world letting that happen..
Assets like Bitcoin?
> Bitcoin isn't pegged to CPI which means that it increases in value when economic productivity increases.
Bitcoin increases much faster than CPI, that's a sign of a bubble. The mystery is that Bitcoin survived consecutive bubbles. I can't explain it, it's what it is. The vast majority of alternative cryptocurrencies had one bubble and died after that exactly as one would expect.
>CPI pegged currencies move purchasing power from labor to capital.
This is the first time I have heard "CPI pegged currency"
I assume that you are talking about inflation. Mild inflation is actually a wealth transfer from capital to labor because inflation is in its essence a wealth tax. Labor is paid in current year salaries as long as you switch employers. You don't get paid 1930 salaries, you get paid more to compensate for the loss of purchasing power, you just have to ask for a raise or switch employers and that is the entire point of inflation. If anyone steals from you it's your boss. You know who doesn't get paid more? Capital owners, they have to invest productively and earn enough to beat inflation.
Your next job will pay more than your last so you should switch as soon as possible. If you were paid in Bitcoin then employers would have to pay you less and less Bitcoin per year because they simply cannot afford the Bitcoin since it keeps going up in value. So your best bet is to stay with your current employer until the employer fires you because they cannot afford you anymore. Ultimately you lose anyway.
Let's also talk about why high inflation is bad. Basically, at some point you have to switch jobs so frequently that you never actually end up doing any work, most of your day is spent finding a new job. Important work like food production gets neglected.
Those who are wealthy, don't own cash at all. They borrow cash as much as possible and buy assets that go up in value. The loan is diluted away while value is stored. Those who credited the loan (poor people and businesses who own cash) lost their earnings. Inflation is definitely not a wealth tax.
Bitcoin survives because more and more people find out that it is the best store of value, because of its absolute scarcity and other properties. Lots of people join just because the value goes up, which causes bubbles. However, the long term trend is that inferior assets (which is everything) will go down relative to bitcoin.
Like how all the existing owners earned it?
5 years later...
“It’s not fair that not enough people bought in. Now we have to ban it because the wrong people bought in!”