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It isn't a bubble - BitCoin is just an inherently unstable, deflationary financial instrument. This is why newer coins that actually correct for hoarding - lik

by Aqueous 13y ago

It isn't a bubble - BitCoin is just an inherently unstable, deflationary financial instrument. This is why newer coins that actually correct for hoarding - like PPCoin - will start to see some traction because they will be more stable, since they encourage spending, encourage transaction volume. There will be less of a risk of the decoupling of the bitcoin economy and the bitcoin value.

erikpukinskis 13y ago
I've been steadily spending Bitcoins for a while. I sold bitcoins to pay my rent several months in a row. People only "hoard" Bitcoin until the temptation to buy something awesome now is higher than the temptation to have more savings later. In my case having a longer runway to work on my own project is worth more to me than savings later in life. There's nothing fundamentally inflationary about Bitcoin. In fact, because the supply is algorithmic, it's fundamentally not likely to either inflate or deflate. Prices are going up as financial markets and consumers wrestle with what it's worth, what it's good for, and how to use it. When that process levels off the price will stabilize, and it will be far more stable than any other currency.
- steveklabnik 13y ago
  > In fact, because the supply is algorithmic, it's fundamentally not likely to either inflate or deflate. This is wrong, or at least, not for the domain term 'deflationary' in economics. BTC is deflationary because there are only a finite number of BTC, while the population is still growing. http://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation http://en.wikipedia.org/wiki/Deflation#Money_supply_side_def...
  - erikpukinskis 13y ago
    Once economists get a good understanding of bitcoins usefulness they can model that growth and it will be priced in and "deflation" stops.
adamb_ 13y ago
I think bitcoin (like most protocols) has first mover advantage, and won't be replaced by something similar, unless something catastrophic happens to it.
crassus 13y ago
Also, it remains to be seen if miners keep mining bitcoin after the block rewards run out. IMO this is bitcoin's only design mistake.

by Aqueous 13y ago

erikpukinskis 13y ago

I've been steadily spending Bitcoins for a while. I sold bitcoins to pay my rent several months in a row. People only "hoard" Bitcoin until the temptation to buy something awesome now is higher than the temptation to have more savings later. In my case having a longer runway to work on my own project is worth more to me than savings later in life. There's nothing fundamentally inflationary about Bitcoin. In fact, because the supply is algorithmic, it's fundamentally not likely to either inflate or deflate. Prices are going up as financial markets and consumers wrestle with what it's worth, what it's good for, and how to use it. When that process levels off the price will stabilize, and it will be far more stable than any other currency.

steveklabnik 13y ago
> In fact, because the supply is algorithmic, it's fundamentally not likely to either inflate or deflate. This is wrong, or at least, not for the domain term 'deflationary' in economics. BTC is deflationary because there are only a finite number of BTC, while the population is still growing. http://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation http://en.wikipedia.org/wiki/Deflation#Money_supply_side_def...
- erikpukinskis 13y ago
  Once economists get a good understanding of bitcoins usefulness they can model that growth and it will be priced in and "deflation" stops.

adamb_ 13y ago

I think bitcoin (like most protocols) has first mover advantage, and won't be replaced by something similar, unless something catastrophic happens to it.

crassus 13y ago

Also, it remains to be seen if miners keep mining bitcoin after the block rewards run out. IMO this is bitcoin's only design mistake.