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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

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
    It's not symmetric though. If I sell bitcoin to buy toothpaste, I will need to pay taxes and transaction costs, so I will probably just use cash to buy toothpaste, not bitcoin.
wpietri 9y ago
Currency and investment are two totally different use cases. People's intentions and behaviors with respect to them are totally different.

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
  It's not symmetric though. If I sell bitcoin to buy toothpaste, I will need to pay taxes and transaction costs, so I will probably just use cash to buy toothpaste, not bitcoin.

wpietri 9y ago

Currency and investment are two totally different use cases. People's intentions and behaviors with respect to them are totally different.