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> As the amount of coins grow the difficulty of calculating hashes increases. This is wrong. As the amount of coins grow, the amount of coins generated per blo

> As the amount of coins grow the difficulty of calculating hashes increases. This is wrong. As the amount of coins grow, the amount of coins generated per block decreases (it halves every ~4 years). The difficulty is completely unrelated to the amount of coins in existence and is instead derived from the hashrate: as hashrate increases, difficulty increases, to target a block rate of 1 per 10 minutes. > Doesn’t this completely undercut the idea of bitcoin as currency? I don't think so. Right now people can buy bitcoin which is "guaranteed to become more valuable", and yet they still choose to buy things other than bitcoin with their USD. Why would it be different if their base currency was BTC instead of USD? Even if you don't think bitcoin is "guaranteed to become more valuable", there are plenty of things that are close approximations to that (pick any good investment), and yet people still choose to buy things other than investments. How do you explain that? Whatever reasoning you use to explain that can be applied verbatim to explain why people will buy things with BTC instead of just holding it.

wpietri 9y ago
You're confusing investment use with currency use. Currencies need approximately stable values to be useful as mediums of exchange. Inflation and deflation can both wreck currencies. Investments, in contrast need to have generally increasing values to be useful as investments. Bitcoin started as currency, but its enormously deflationary record has turned it into an investment.
- jstanley 9y ago
  You didn't address my argument. If bitcoin being deflationary would truly prevent people from buying things, then why doesn't it do so already? You can already buy bitcoin instead of anything else you want to buy, so why do people buy things other than bitcoin? If you can explain why people might want other things more than they want bitcoin, you can explain why the existence of bitcoin won't prevent people from buying those things. And whether they already hold bitcoin or not is totally irrelevant.
  - imtringued 9y ago
    I would say thanks to it's deflationary nature it is no longer a currency, just an investment.
    - jstanley 9y ago
      You also haven't addressed my argument. It doesn't matter whether you call it a currency or investment. There are already things you can buy that are likely to go up in value over time, relative to the US dollar (e.g. stock market index funds). If the existence of those investments (that people can buy instead of other things) doesn't stop people from buying other things, why would a deflationary bitcoin stop people from buying other things?
      - vasilipupkin 9y ago
        people don't buy things by paying for them with US stock index funds. They pay for them with the cash portion of their portfolio. I mean sure, at some point they convert parts of their stock portfolio to cash. the reason it matters whether it is currency or an investment is, if it is an investment, then it should be valued on principles we use for valuing other investments.
        jstanley 9y ago
        The only reason to hold off on purchases because you think your bitcoin will go up in value is because you think your bitcoin will go up in value. But that applies just as well even if you don't already own the bitcoin (you could just buy bitcoin instead of the other thing). Why does anyone buy anything that's not bitcoin? Because they want those things more than they want bitcoin. That doesn't stop being true just because you can pay for things in bitcoin. Identical reasoning applies if you replace "bitcoin" with anything else that you think is going to go up in value over time. And people still buy things. The sky isn't going to fall down!
        vasilipupkin 9y ago

wpietri 9y ago

You're confusing investment use with currency use. Currencies need approximately stable values to be useful as mediums of exchange. Inflation and deflation can both wreck currencies. Investments, in contrast need to have generally increasing values to be useful as investments. Bitcoin started as currency, but its enormously deflationary record has turned it into an investment.

jstanley 9y ago
You didn't address my argument. If bitcoin being deflationary would truly prevent people from buying things, then why doesn't it do so already? You can already buy bitcoin instead of anything else you want to buy, so why do people buy things other than bitcoin? If you can explain why people might want other things more than they want bitcoin, you can explain why the existence of bitcoin won't prevent people from buying those things. And whether they already hold bitcoin or not is totally irrelevant.
- imtringued 9y ago
  I would say thanks to it's deflationary nature it is no longer a currency, just an investment.
  - jstanley 9y ago
    You also haven't addressed my argument. It doesn't matter whether you call it a currency or investment. There are already things you can buy that are likely to go up in value over time, relative to the US dollar (e.g. stock market index funds). If the existence of those investments (that people can buy instead of other things) doesn't stop people from buying other things, why would a deflationary bitcoin stop people from buying other things?
    - vasilipupkin 9y ago
      people don't buy things by paying for them with US stock index funds. They pay for them with the cash portion of their portfolio. I mean sure, at some point they convert parts of their stock portfolio to cash. the reason it matters whether it is currency or an investment is, if it is an investment, then it should be valued on principles we use for valuing other investments.
      - jstanley 9y ago
        The only reason to hold off on purchases because you think your bitcoin will go up in value is because you think your bitcoin will go up in value. But that applies just as well even if you don't already own the bitcoin (you could just buy bitcoin instead of the other thing). Why does anyone buy anything that's not bitcoin? Because they want those things more than they want bitcoin. That doesn't stop being true just because you can pay for things in bitcoin. Identical reasoning applies if you replace "bitcoin" with anything else that you think is going to go up in value over time. And people still buy things. The sky isn't going to fall down!
        vasilipupkin 9y ago