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By the same logic why wouldn't you use all the extra cash you have to buy bitcoins? If you frame it that way then the answer is obvious, there is no guarantee

by gigq 13y ago

By the same logic why wouldn't you use all the extra cash you have to buy bitcoins? If you frame it that way then the answer is obvious, there is no guarantee the value will continue to rise so you will use it to purchase when you think it's over priced (I bought a TV and new camera when the price was over 1k). The volatility actually ends up being a good thing in this regard because sometimes you are better off purchasing other goods with bitcoin, sometimes you are better off holding. If the value eventually balances out and is truly deflationary against inflation then I don't think people are going to lose sleep over selling bitcoins that are going up 3% each year the same way they don't worry about taking money out of a savings account to buy something they don't really need.

tptacek 13y ago
That's easy to answer. You wouldn't convert your dollars to bitcoins because bitcoin will only appreciate in value if it becomes an important instrument of commerce; it has no other value even in theory. If you believe the deflationary attribute of bitcoin will cause it to be hoarded instead of used as a tool of commerce, you also believe that hoarding bitcoin is irrational, because the system is eventually going to collapse. It doesn't take any insight about bitcoin to arrive at that conclusion ("deflationary currencies are unusable, therefore don't bother hoarding bitcoin"); it's just logic.
- gigq 13y ago
  "If you believe the deflationary attribute of bitcoin will cause it to be hoarded instead of used as a tool of commerce" I don't believe that, I think we can see that people are willing to sell it when there is something they want.
- 3pt14159 13y ago
  For certain transactions you MUST use Bitcoin. Bad currency generally drives out good, but if the good is the only way you can anonymously buy dildos in Saudi Arabia, then it is the only currency. Furthermore, bad currency drives out good generally when they hold the same face value. Otherwise there is a free float of exchange. Also, for people living in "weird" countries, like Angola, there is often no way for them to buy things online since payment processors flag them as suspicious transactions.
  - tptacek 13y ago
    To "Alpha Black Lotus Depository Certificates" I hereby add "Saudi Arabian Dildo Vouchers" as a synonym for cryptocurrency.

by gigq 13y ago

tptacek 13y ago

That's easy to answer. You wouldn't convert your dollars to bitcoins because bitcoin will only appreciate in value if it becomes an important instrument of commerce; it has no other value even in theory. If you believe the deflationary attribute of bitcoin will cause it to be hoarded instead of used as a tool of commerce, you also believe that hoarding bitcoin is irrational, because the system is eventually going to collapse. It doesn't take any insight about bitcoin to arrive at that conclusion ("deflationary currencies are unusable, therefore don't bother hoarding bitcoin"); it's just logic.

gigq 13y ago
"If you believe the deflationary attribute of bitcoin will cause it to be hoarded instead of used as a tool of commerce" I don't believe that, I think we can see that people are willing to sell it when there is something they want.
3pt14159 13y ago
For certain transactions you MUST use Bitcoin. Bad currency generally drives out good, but if the good is the only way you can anonymously buy dildos in Saudi Arabia, then it is the only currency. Furthermore, bad currency drives out good generally when they hold the same face value. Otherwise there is a free float of exchange. Also, for people living in "weird" countries, like Angola, there is often no way for them to buy things online since payment processors flag them as suspicious transactions.
- tptacek 13y ago
  To "Alpha Black Lotus Depository Certificates" I hereby add "Saudi Arabian Dildo Vouchers" as a synonym for cryptocurrency.