Why all of a sudden tech companies are not being favorable to their users?

lionkoy5555@lemmy.world to No Stupid Questions@lemmy.world – 1572 points –

YouTube disallowing adblockers, Reddit charging for API usage, Twitter blocking non-registered users. These events happen almost at the same time. Is this one of the effects of the tech bubble burst?

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Could it have something to do with inflation?

The opposite. Inflation makes debt cheaper. If you borrow at 10%, and inflation is 10%, its like you borrowed money for free.

The issue is that central banks increased interest rates significantly. If you need to borrow more money, its at 14%, 16%, or higher now.

I was having trouble wrapping my head around this at first but if the example below is correct I think I get it now.

Suppose you borrow $10,000 from a lender at an interest rate of 5% per year, and you have to repay the loan in one year. Now, let's assume that there is an inflation rate of 3% during that year.

Without inflation:

Loan amount: $10,000
Annual interest rate: 5%.
Interest payment: $10,000 * 5% = $500.
Total repayment: $10,000 (loan amount) + $500. (interest payment) = $10,500.

With inflation:

Loan amount: $10,000
Annual interest rate: 5%.
Inflation rate: 3%.
Interest payment: $10,000 * 5% = $500.
Total repayment adjusted for inflation: $10,000 (loan amount) + $500 (interest payment) = $10,500.
Inflation-adjusted value of repayment: $10,500 / (1 + 3%) = $10,145.63.

In this example, the inflation rate of 3% effectively reduced the real value of the debt repayment to $10,145.63, making it cheaper in real terms. This is because the value of money decreased due to inflation, allowing you to repay the debt with dollars that have a lower purchasing power.`