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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 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.

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.