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"that is a deflationary monetary system, [...] being a much bigger issue" The market currently proves you wrong. This is not an "issue". Everybody knows about
by mrb 14y ago
"that is a deflationary monetary system, [...] being a much bigger issue"
The market currently proves you wrong. This is not an "issue". Everybody knows about deflation, yet spending is massively increasing. BitPay alone recorded a merchant transaction volume increasing from $687k in February to $5.2M in March. (BitPay is the largest Bitcoin transaction processor, providing a very clear indicator of whether people are spending or hoarding).
http://www.marketwatch.com/story/bitpay-eclipses-silk-road-in-bitcoin-sales-with-explosive-52m-march-2013-04-02 http://www.marketwatch.com/story/bitpay-eclipses-silk-road-i...
- makomk 14y agoHow much of that volume is ASIC purchases, which are essentially a form of speculation on the future price of Bitcoin themselves?
- eru 14y agoWhat are the ASIC producers doing with all their bitcoins?
- makomk 14y agoIn many cases, they're not receiving bitcoins in the first place. BitPay allows merchants to receive the USD equivalent of their incoming payments minus a small fee, and at least one major ASIC manufacturer does it this way.
- zanny 14y agoIt works because people value goods they can get with their coins more than the appreciating value of coins in the future. The problem everyone is having is not about coins being used for exchange - any money will provoke people to spend it on the things they value more than the money itself - but on how a deflating currency makes investment less prominent because it requires even higher returns than the rate of the currency appreciating value.