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I think this could pose a problem in the future for Bitcoin. Bitcoin was meant to be a decentralized vehicle of value that you could use to trade or buy things.

I think this could pose a problem in the future for Bitcoin. Bitcoin was meant to be a decentralized vehicle of value that you could use to trade or buy things. However recently its being treated more as a stock and being stockpiled so I no longer see people as willing to pay for different services etc with Bitcoin as they used to because they can gain more value by waiting which goes against Bitcoin's intent as an independent vehicle of value. Even though one could argue that Bitcoin has the status of gold but gold is not something one commonly trades or uses to buy food etc in a normal non-disaster scenario. EDIT: Because this comment is bringing a lot of attention, I would like to reiterate my stance on Bitcoin. I'm supportive of Bitcoin, I would like a decentralized currency that is not tied to the importance of any country or government and as well can be used to foster trade between countries simply because it is much easier to just buy foreign goods than in the current state due to import duties, etc. Moreover, I see the world moving towards more coming together as a whole than fighting over lands and other issues that don't directly benefit humanity from using Bitcoin. However my problem is the fast-increasing price of bitcoin is increasingly headed towards the playground of high net-worth individuals or organizations/investment banks such as Goldman Sachs and no longer being able to be traded between normal people who don't have their deep pockets or are scared away by the pricing which prevents Bitcoin from becoming a worldwide vehicle of value to be used for common transactions and sort of deviates from the original intent. I also know one can trade decimal value Bitcoin for food and it could the volatile nature at play but it defeats the purpose if one needs to first check the Bitcoin markets before deciding on an eventual decimal value amount for the food paid.

olegkikin 9y ago
You can buy a better computer by waiting. Does that stop you from buying computers? Considering how easily people invest cryptocurrencies into quite risky ICOs, you can see that people don't have any problem spending, as long as it's something they consider valuable.
- lmm 9y ago
  > You can buy a better computer by waiting. Does that stop you from buying computers? On the margin, yes. It doesn't stop me from ever doing it, but it does mean I put off upgrading as long as possible.
  - olegkikin 9y ago
    In other words, you buy computers when you need to. Seems healthy.
    - lmm 9y ago
      It's bad for the velocity of the economy; holding a computer you're not using isn't great, but holding money you're not using is even worse, because by buying the computer you're sending out price signals earlier on that the rest of the economy can use to allocate resources appropriately. And deflation has a nasty tendency to form a self-reinforcing spiral (as does inflation to a slightly lesser extent, so the preferred approach is to have people actively adjusting interest rates etc. to keep a currency value reasonably stable but with a small rate of inflation).
      - olegkikin 9y ago
        The economy is not everything. It's better people use their money more rationally, rather than buying junk that they don't really need, which then falls apart and poisons our soils and oceans. Plus it's quite clear to me that people are willing to spend their deflationary currency on the things that they believe in - the whole ICO market demonstrates it.
        lmm 9y ago
        Not really - ICOs are just buying other, more deflationary cryptocurrencies.
- forkLding 9y ago
  I dont consider Bitcoins as computers, you're not paying for visas or food with computers because computers aren't vehicles of value and they're not really liquid, you can't just go i'm buying a house with many computers as you can with Bitcoin. As well as waiting for it, I only pointed this out after reading the fb comments about an article: https://www.google.ca/url?sa=t&source=web&rct=j&url=https://qz.com/1099475/a-small-pacific-island-will-now-let-you-buy-citizenship-with-bitcoin/&ved=0ahUKEwj9noec-O3WAhXM6IMKHfrkDyYQFgg1MAI&usg=AOvVaw3H5dhHd8yvydsq4h6XOW3q https://www.google.ca/url?sa=t&source=web&rct=j&url=https://... where they basically did not want to pay because of Bitcoin's worth, again this could be because that they were asking for 60 bitcoins.
  - olegkikin 9y ago
    I didn't say bitcoins are like computers. You misunderstood my comment. To clarify, computer markets emulate the deflationary nature of something like bitcoin. Yet they sell just fine.
- simias 9y ago
  That's not really the question though, a better question would be "you need to buy a computer today, do you pay in bitcoin or fiat?" If you believe that bitcoin is going to be successful then you should absolutely pay in fiat. There's also a bigger question, I may need a computer today so I'll buy one instead of waiting. But what about the money that I don't need to spend, my retirement fund or something like that? With inflationary currency I have an incentive to invest that money, fueling the economy. With bitcoin I can just let the money sleep in my cold wallet and I know that it'll keep getting more and more valuable by virtue of being in ever more limited supply. The rich get richer and the poor can't get a loan. Of course you might say that if the economy is unhealthy it'll cause a recession which will end up devaluing my bitcoins, but then you have a prisoner's dilemma: you want people to invest bitcoins into the economy but you sure as hell don't want to be the one doing it. But remember kids, bitcoin is about killing the greedy banks and helping the poor farmers in Africa or something so fight the good fight and buy those coins. It's amusing to me how the bitcoin community rejoices every time a business starts accepting bitcoin but at the same time the rallying cry is always "HOLD", as in do not ever spend your bitcoins because they're going to increase in value. There's an amusing dissonance here.
  - rothbardrand 9y ago
    Well, the thing about bitcoin is that anyone can buy bitcoin. If you're poor, you can have coinbase buy $10 in bitcoin a week automatically. It's an investment of a quality that isn't really available in other forms, and accessible to poor people and middle class who are excluded from things like venture capital and other things by securities regulations. HODL doesn't mean never sell nothing, it means don't try to trade in and out of bitcoin to time the market. Nothing wrong with spending some bitcoin, that's not opposed to holding, just better to spend less bitcoin than you're earning from your salary each month.
    - simias 9y ago
      Saving money is a luxury. That's where the huge inequality lies. Just google the issue to find tons of links, here's one at random: https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/#4c6e93384e0d https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-... >63% Of Americans Don't Have Enough Savings To Cover A $500 Emergency Most people simply can't afford to invest a significant amount of money in bitcoin, especially with the high volatility we're having at the moment. That's actually the point the parent was trying to make, except it backfires here. People won't stop buying food, clothes and paying rent to invest in bitcoin for later returns. They have to spend that money. Rich people on the other hand can do whatever they want. If poor people want to become rich they'll probably need some initial investment, but bitcoin's deflation removes some of the incentives for rich people to invest money. One way to solve this issue would be to tax bitcoins savings to force the rich to "spend" their money by paying taxes, but at the same time bitcoin makes it easier than ever to hide and launder your money and even if the state manages to track your account they can't cease it without having access to your private key. Forget the panama papers, forget the lux-leaks. All you need is a computer running the bitcoin client and you can move millions anonymously without any intermediary.
- vannevar 9y ago
  You can buy a better computer by waiting. Does that stop you from buying computers? It does in practice, actually. But there is always some portion of the market that needs the better system now. That is much less true of Bitcoin, which is mostly held for speculation rather than as a currency. People who are forced to "spend" Bitcoin are people who want to realize their speculative gain and exchange it for dollars, which they then use as currency because it's still vastly more convenient than Bitcoin.
simias 9y ago
That's predictable though, given the deflationary nature of the currency. If bitcoin is successful then it'll keep increasing in value. That means that there's very little incentive to ever spend your bitcoins if you can avoid it.
ringaroundthetx 9y ago
recently? well folks look like this argument is going to be around forever. people were saying the same things in 2012. bitcoin is functioning at the same standard of any existing currency, so no need to make a new higher standard for it. The M1 supply is a tiny fraction of the asset and used for buying things. The M2 and M3 supply is a larger stockpiled group which is also being used for investing in things inside of its own economy. Thats not controversial.
- forkLding 9y ago
  I understand I am making a presumption here by saying this and can be proven wrong, but I cant find exact data on people spending a lot of Bitcoin on services that take in Bitcoin thus I am presuming that people dont want to pay but are buying and holding Bitcoin and thus operates with a different standard than your typical US dollar which could pose a problem and also kind of goes against the idea of a currency used by everyone and decentralized from any govt.
  - ringaroundthetx 9y ago
    There's no way to definitely prove you wrong, and there's no way your presumption can be proven right. Bitcoin volumes increase month over month, Bitcoin transactions onchain still increase month over month, or at least year over year so far, you can try to extrapolate days destroyed to see how much of the supply moves But you will never know the purpose behind the transactions. Payment processors releasing data wouldn't even give a picture of peer to peer purchases happening, and they aren't even releasing data. People investing in mining cooperatives, mining hardware, and token sales for all manner of organizations, are all part of the picture. And this will be in the billions this year.
jstanley 9y ago
I think you under-estimate just how far Bitcoin has come. Many people have their only income in Bitcoin. I do. I am forced to spend (or, at minimum, sell) Bitcoin because if I don't, I don't have any food or housing.
rothbardrand 9y ago
Bitcoin is a currency going thru the technology adoption cycle. This is a really new thing. The technology adoption cycle-- what the internet and smart phones went thru-- is when increasingly large waves of population accept the new technology. Bitcoin still has some UI issues and a steep learning curve, and as a new form of money has to overcome massive societal inertia as to "what money is". That said, so long as it is going thru this process, it will operate more as a store of value and speculative investment than as a currency. Bitcoins volatility has been declining over the years, as it gets closer, though it's a long way off. So the currency use case is less dominant now and will be as it is distributed to wider and wider numbers of people. One thing we have to overcome is the idea you deal in "bitcoins".... bitcoin is divisible to 1/100,000,000th of a coin-- a satoshi. When people get in the habit and comfortable with owning partial bitcoins, it will go much wider. There will only be 21 million bitcoins in existence, there are 11 million millionaires in the USA alone. That means that even american millionaires will never be able to own 2 bitcoins.

olegkikin 9y ago

You can buy a better computer by waiting. Does that stop you from buying computers? Considering how easily people invest cryptocurrencies into quite risky ICOs, you can see that people don't have any problem spending, as long as it's something they consider valuable.

lmm 9y ago
> You can buy a better computer by waiting. Does that stop you from buying computers? On the margin, yes. It doesn't stop me from ever doing it, but it does mean I put off upgrading as long as possible.
- olegkikin 9y ago
  In other words, you buy computers when you need to. Seems healthy.
  - lmm 9y ago
    It's bad for the velocity of the economy; holding a computer you're not using isn't great, but holding money you're not using is even worse, because by buying the computer you're sending out price signals earlier on that the rest of the economy can use to allocate resources appropriately. And deflation has a nasty tendency to form a self-reinforcing spiral (as does inflation to a slightly lesser extent, so the preferred approach is to have people actively adjusting interest rates etc. to keep a currency value reasonably stable but with a small rate of inflation).
    - olegkikin 9y ago
      The economy is not everything. It's better people use their money more rationally, rather than buying junk that they don't really need, which then falls apart and poisons our soils and oceans. Plus it's quite clear to me that people are willing to spend their deflationary currency on the things that they believe in - the whole ICO market demonstrates it.
      - lmm 9y ago
        Not really - ICOs are just buying other, more deflationary cryptocurrencies.
forkLding 9y ago
I dont consider Bitcoins as computers, you're not paying for visas or food with computers because computers aren't vehicles of value and they're not really liquid, you can't just go i'm buying a house with many computers as you can with Bitcoin. As well as waiting for it, I only pointed this out after reading the fb comments about an article: https://www.google.ca/url?sa=t&source=web&rct=j&url=https://qz.com/1099475/a-small-pacific-island-will-now-let-you-buy-citizenship-with-bitcoin/&ved=0ahUKEwj9noec-O3WAhXM6IMKHfrkDyYQFgg1MAI&usg=AOvVaw3H5dhHd8yvydsq4h6XOW3q https://www.google.ca/url?sa=t&source=web&rct=j&url=https://... where they basically did not want to pay because of Bitcoin's worth, again this could be because that they were asking for 60 bitcoins.
- olegkikin 9y ago
  I didn't say bitcoins are like computers. You misunderstood my comment. To clarify, computer markets emulate the deflationary nature of something like bitcoin. Yet they sell just fine.
simias 9y ago
That's not really the question though, a better question would be "you need to buy a computer today, do you pay in bitcoin or fiat?" If you believe that bitcoin is going to be successful then you should absolutely pay in fiat. There's also a bigger question, I may need a computer today so I'll buy one instead of waiting. But what about the money that I don't need to spend, my retirement fund or something like that? With inflationary currency I have an incentive to invest that money, fueling the economy. With bitcoin I can just let the money sleep in my cold wallet and I know that it'll keep getting more and more valuable by virtue of being in ever more limited supply. The rich get richer and the poor can't get a loan. Of course you might say that if the economy is unhealthy it'll cause a recession which will end up devaluing my bitcoins, but then you have a prisoner's dilemma: you want people to invest bitcoins into the economy but you sure as hell don't want to be the one doing it. But remember kids, bitcoin is about killing the greedy banks and helping the poor farmers in Africa or something so fight the good fight and buy those coins. It's amusing to me how the bitcoin community rejoices every time a business starts accepting bitcoin but at the same time the rallying cry is always "HOLD", as in do not ever spend your bitcoins because they're going to increase in value. There's an amusing dissonance here.
- rothbardrand 9y ago
  Well, the thing about bitcoin is that anyone can buy bitcoin. If you're poor, you can have coinbase buy $10 in bitcoin a week automatically. It's an investment of a quality that isn't really available in other forms, and accessible to poor people and middle class who are excluded from things like venture capital and other things by securities regulations. HODL doesn't mean never sell nothing, it means don't try to trade in and out of bitcoin to time the market. Nothing wrong with spending some bitcoin, that's not opposed to holding, just better to spend less bitcoin than you're earning from your salary each month.
  - simias 9y ago
    Saving money is a luxury. That's where the huge inequality lies. Just google the issue to find tons of links, here's one at random: https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/#4c6e93384e0d https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-... >63% Of Americans Don't Have Enough Savings To Cover A $500 Emergency Most people simply can't afford to invest a significant amount of money in bitcoin, especially with the high volatility we're having at the moment. That's actually the point the parent was trying to make, except it backfires here. People won't stop buying food, clothes and paying rent to invest in bitcoin for later returns. They have to spend that money. Rich people on the other hand can do whatever they want. If poor people want to become rich they'll probably need some initial investment, but bitcoin's deflation removes some of the incentives for rich people to invest money. One way to solve this issue would be to tax bitcoins savings to force the rich to "spend" their money by paying taxes, but at the same time bitcoin makes it easier than ever to hide and launder your money and even if the state manages to track your account they can't cease it without having access to your private key. Forget the panama papers, forget the lux-leaks. All you need is a computer running the bitcoin client and you can move millions anonymously without any intermediary.
vannevar 9y ago
You can buy a better computer by waiting. Does that stop you from buying computers? It does in practice, actually. But there is always some portion of the market that needs the better system now. That is much less true of Bitcoin, which is mostly held for speculation rather than as a currency. People who are forced to "spend" Bitcoin are people who want to realize their speculative gain and exchange it for dollars, which they then use as currency because it's still vastly more convenient than Bitcoin.

simias 9y ago

That's predictable though, given the deflationary nature of the currency. If bitcoin is successful then it'll keep increasing in value. That means that there's very little incentive to ever spend your bitcoins if you can avoid it.

ringaroundthetx 9y ago

recently? well folks look like this argument is going to be around forever. people were saying the same things in 2012. bitcoin is functioning at the same standard of any existing currency, so no need to make a new higher standard for it. The M1 supply is a tiny fraction of the asset and used for buying things. The M2 and M3 supply is a larger stockpiled group which is also being used for investing in things inside of its own economy. Thats not controversial.

forkLding 9y ago
I understand I am making a presumption here by saying this and can be proven wrong, but I cant find exact data on people spending a lot of Bitcoin on services that take in Bitcoin thus I am presuming that people dont want to pay but are buying and holding Bitcoin and thus operates with a different standard than your typical US dollar which could pose a problem and also kind of goes against the idea of a currency used by everyone and decentralized from any govt.
- ringaroundthetx 9y ago
  There's no way to definitely prove you wrong, and there's no way your presumption can be proven right. Bitcoin volumes increase month over month, Bitcoin transactions onchain still increase month over month, or at least year over year so far, you can try to extrapolate days destroyed to see how much of the supply moves But you will never know the purpose behind the transactions. Payment processors releasing data wouldn't even give a picture of peer to peer purchases happening, and they aren't even releasing data. People investing in mining cooperatives, mining hardware, and token sales for all manner of organizations, are all part of the picture. And this will be in the billions this year.

jstanley 9y ago

I think you under-estimate just how far Bitcoin has come. Many people have their only income in Bitcoin. I do. I am forced to spend (or, at minimum, sell) Bitcoin because if I don't, I don't have any food or housing.

rothbardrand 9y ago

Bitcoin is a currency going thru the technology adoption cycle. This is a really new thing. The technology adoption cycle-- what the internet and smart phones went thru-- is when increasingly large waves of population accept the new technology. Bitcoin still has some UI issues and a steep learning curve, and as a new form of money has to overcome massive societal inertia as to "what money is". That said, so long as it is going thru this process, it will operate more as a store of value and speculative investment than as a currency. Bitcoins volatility has been declining over the years, as it gets closer, though it's a long way off. So the currency use case is less dominant now and will be as it is distributed to wider and wider numbers of people. One thing we have to overcome is the idea you deal in "bitcoins".... bitcoin is divisible to 1/100,000,000th of a coin-- a satoshi. When people get in the habit and comfortable with owning partial bitcoins, it will go much wider. There will only be 21 million bitcoins in existence, there are 11 million millionaires in the USA alone. That means that even american millionaires will never be able to own 2 bitcoins.