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And yet despite all the deflation people are conducting transactions in bitcoin. How long do you have to hold on to money before it's hoarding? A second? A m

And yet despite all the deflation people are conducting transactions in bitcoin. How long do you have to hold on to money before it's hoarding? A second? A minute? An hour? A year? The vast majority of money is hoarded because most people don't earn a dollar on one hand an immediately spend it on the other.

baddox 14y ago
Any USD to bitcoin exchange price reflects both a bitcoin buyer and a bitcoin spender (seller). The bitcoin exchange price can only increase through people spending bitcoins on USD. Besides, if this argument that "the only rational thing to do if you own a deflationary currency is to hoard it" is correct, then that implies that "the only rational thing to do with an inflationary currency is to buy a deflationary currency regardless of the exchange price."
- JPKab 14y ago
  Ummm, no. The bitcoin price can only go up if people are spending US dollars, Euros, etc on Bitcoins, not the other way around as you describe it. You do understand how currency exchanges function, do you not? If people are goign to an exchange, giving the exchange bitcoins, and then taking dollars for said bitcoins, the ratio of bitcoins to dollars within the exchanges holdings has just gone up, lowering the number of dollars it takes to buy a bitcoin....... so if the bitcoin takes MORE dollars, euros, etc to buy, then the opposite must be occurring. This really isn't very complicated.
JPKab 14y ago
"And yet despite all the deflation people are conducting transactions in bitcoin." Yes, because how else are they going to buy weed, ecstacy, cocaine, illegal electronics, steroids or any other banned substances that form the backbone of the commodities people are actually purchasing with bitcoins. Have you ever been to the Silk Road site? I bet you haven't. Here's a hint: you won't be able to use your browser to go, so look up Tor. Edit: For the noninformed who say "dollars?" There is a huge incentive to use Bitcoins on Tornet sites like Silk Road to trade black market goods. This is because Bitcoins can cross international borders and are encrypted, are not subject to bank regulations, etc. They are essentially difficult for Law Enforcement Agencies to trace, but not impossible.
- icebraining 14y ago
  how else are they going to buy weed, ecstacy, cocaine, illegal electronics, steroids or any other banned substances With dollars?
dragonwriter 14y ago
> And yet despite all the deflation people are conducting transactions in bitcoin. Deflation is something that happens to an economy; it can be a result of constrained supply of currency in the economy, but constrained supply of bitcoin now, which accounts for a very small share of the currency used in exchanges in any coherent economy isn't deflationary, even if the supply characteristics of bitcoin are such that it would be deflationary if it were a dominant currency. > How long do you have to hold on to money before it's hoarding? A second? A minute? An hour? A year? Probably best to say that any money held in cash is "hoarded", and characterize hoarding by degree rather than as a binary quantity. > The vast majority of money is hoarded because most people don't earn a dollar on one hand an immediately spend it on the other. People who deposit money in a bank (which amounts to a loan, even though it may be at an effective zero or, given fees charged by the institution, negative interest rate for some accounts) are not hoarding it. And, neither, for the most part, is the bank, who is turning around and investing/lending most of the funds deposited. If people are cashing their paychecks and stuffing the money in their mattresses, then, yeah, they are hoarding it, but that's not all that typical.
lolcraft 14y ago
> And yet despite all the deflation people are conducting transactions in bitcoin. Did you know that prices in Silk Road are pegged to USD? As it should. Either way, that's called argument ad populum. "And yet despite no revenue sources people are buying dotcom stocks"... > How long do you have to hold on to money before it's hoarding? This is called moving the goalposts. It's also a stupid argument in many other ways, by the way, and you should know better. "Evolution does not happen because not every single organism gives birth to one of another species"...

baddox 14y ago

Any USD to bitcoin exchange price reflects both a bitcoin buyer and a bitcoin spender (seller). The bitcoin exchange price can only increase through people spending bitcoins on USD. Besides, if this argument that "the only rational thing to do if you own a deflationary currency is to hoard it" is correct, then that implies that "the only rational thing to do with an inflationary currency is to buy a deflationary currency regardless of the exchange price."

JPKab 14y ago
Ummm, no. The bitcoin price can only go up if people are spending US dollars, Euros, etc on Bitcoins, not the other way around as you describe it. You do understand how currency exchanges function, do you not? If people are goign to an exchange, giving the exchange bitcoins, and then taking dollars for said bitcoins, the ratio of bitcoins to dollars within the exchanges holdings has just gone up, lowering the number of dollars it takes to buy a bitcoin....... so if the bitcoin takes MORE dollars, euros, etc to buy, then the opposite must be occurring. This really isn't very complicated.

JPKab 14y ago

"And yet despite all the deflation people are conducting transactions in bitcoin." Yes, because how else are they going to buy weed, ecstacy, cocaine, illegal electronics, steroids or any other banned substances that form the backbone of the commodities people are actually purchasing with bitcoins. Have you ever been to the Silk Road site? I bet you haven't. Here's a hint: you won't be able to use your browser to go, so look up Tor. Edit: For the noninformed who say "dollars?" There is a huge incentive to use Bitcoins on Tornet sites like Silk Road to trade black market goods. This is because Bitcoins can cross international borders and are encrypted, are not subject to bank regulations, etc. They are essentially difficult for Law Enforcement Agencies to trace, but not impossible.

icebraining 14y ago
how else are they going to buy weed, ecstacy, cocaine, illegal electronics, steroids or any other banned substances With dollars?

dragonwriter 14y ago

> And yet despite all the deflation people are conducting transactions in bitcoin. Deflation is something that happens to an economy; it can be a result of constrained supply of currency in the economy, but constrained supply of bitcoin now, which accounts for a very small share of the currency used in exchanges in any coherent economy isn't deflationary, even if the supply characteristics of bitcoin are such that it would be deflationary if it were a dominant currency. > How long do you have to hold on to money before it's hoarding? A second? A minute? An hour? A year? Probably best to say that any money held in cash is "hoarded", and characterize hoarding by degree rather than as a binary quantity. > The vast majority of money is hoarded because most people don't earn a dollar on one hand an immediately spend it on the other. People who deposit money in a bank (which amounts to a loan, even though it may be at an effective zero or, given fees charged by the institution, negative interest rate for some accounts) are not hoarding it. And, neither, for the most part, is the bank, who is turning around and investing/lending most of the funds deposited. If people are cashing their paychecks and stuffing the money in their mattresses, then, yeah, they are hoarding it, but that's not all that typical.

lolcraft 14y ago

> And yet despite all the deflation people are conducting transactions in bitcoin. Did you know that prices in Silk Road are pegged to USD? As it should. Either way, that's called argument ad populum. "And yet despite no revenue sources people are buying dotcom stocks"... > How long do you have to hold on to money before it's hoarding? This is called moving the goalposts. It's also a stupid argument in many other ways, by the way, and you should know better. "Evolution does not happen because not every single organism gives birth to one of another species"...