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It definitely means people won't use it as a unit of account (for debts, budgets, etc), which is one primary use for a currency... But I don't think it means p
by mbrock 9y ago
It definitely means people won't use it as a unit of account (for debts, budgets, etc), which is one primary use for a currency...
But I don't think it means people won't spend it or trade it for some other currency or asset. If you held a bunch of bitcoin while the price in USD doubled, and you happened to want a new smartphone, you're sure you wouldn't buy one?
If you were absolutely confident the price would quickly rise even more, maybe you would prefer holding, but if you really want the phone and you think BTC/USD has some risk?
- Nursie 9y agoI'd spend dollars on the phone, because the same BTC might buy 10 phones in a few weeks.
- rbanffy 9y ago> the same BTC might buy 10 phones in a few weeks. Which is kind of crazy and defies all logic - cryptocurrencies can be manufactured without any limit, even Bitcoin can be cloned and rebooted, creating a new currency space/ledger that's fresh.
- avyfain 9y agoYou can print out a piece of paper that says "TEN US DOLLARS" on it, but if the corner store or the bank won't take it it isn't really the same as $10.
- mbrock 9y agoIt's the same opportunity cost whether you spend from your BTC account or your USD account! You're choosing between "should I buy a phone or 0.1 bitcoin with these dollars?" I think the presence in the market of an asset that many people believe is continually underpriced would have a general effect on spending, not just on the utility of that asset as a medium of exchange...
- Nursie 9y ago>> It's the same opportunity cost whether you spend from your BTC account or your USD account! Only if obtaining BTC is frictionless and fee-free, something far from universal.