Topic: Bitcoin bubbles usefulness for regular people (Read 1554 times)

One person can perform many roles at once, sure.

The greed of hoarders who sink fiat into bitcoin is a source of profit for more flexible savers/consumers.

Ok, so what about the people who speculate/trade, AND save/consume?

IMO people get all caught up in this "OMG HOARDERS VS. SPENDERS" mentality, it's a false dichotomy, get off it already. Not everything is black and white. I guarantee you the biggest hoarders still have to buy shit once in a while, after all, they are human - and since BTC users tend to be fiat-haters, those "hoarders who also buy stuff" (i.e. all of them) definitely have a good few in their ranks who will buy aforementioned "things" with bitcoins rather than USD, when they can.

So chill with the hoarders vs. spenders mentality. It doesn't work like that. We can do both, I know this because most people DO both. Sure there are differences in ratios between saving and spending. Some people have a million $$ in bitcoin and spend a tiny bit on stuff each month, some people have $10,000 in bitcoin and buy silver or clothes or whatever pretty regularly. Just like there's folks with a billion USD in their bank account who spend a tiny fraction of that each month on "consumption" and then there's folks with 400 USD in their bank account at any given time who spend many times that each month on expenses.

A family member pays me back for groceries and cell phone bill each week/month in BTC, but also has a significant amount saved and is hoping to "Get rich quick." Depending on which h8er you talk to, this family member might be either (a) destroying bitcoin by speculating and hoping that value increases, or (b) helping bitcoin by using it to consume. I don't think we need to make this distinction; I think both activities are healthy uses of a deflationary quasi-commodity.

For every stereotype and false dichotomy someone can provide me regarding "what you think people do with their bitcoins" I can pop it faster than a bitcoin bubble 

So you put the miners in the same category as consumers for whom you said are "normal working people paying for the whole banquet."  But, right now miners are raking in huge profits, so obviously they are not the ones paying. So, who's paying?

Yeah, I'd fit miners in savers/consumers. Just as any hard working people they use their skills and resources to get btc. Sure, many of them go and try themselves as traders on gox but thats later.

Leveraging goods distribution chain position is very simple in theory - you get electronics dirt cheap from Chinese wholesaler and retail it in your country. You are higher up the chain than end-consumers and so able to make a profit.

And miners!

Also, I don't understand how do you leverage your goods distribution chain position.  And what does that even mean?


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Bitcoins are definitely not worse than a bank. Nice graphs!

The first graph is good. Its very clear in explaining some characteristics of the bitcoin price trend. It will be useful in explaining bitcoins value to journalists and other interested parties. Thanks for that contribution.

It is also fair to say that bitcoin is not a bubble but a series of bubbles and bubble is your friend.

Yeah, bitcoin can be seen as sort of "mutual help fund" or "pile of value to fetch and fill"

This is why i think bitcoin is not a bubble but more like a bank. Better bank. When you think about it, banks are bubbless too. They take your money and lend it to others to make profit. If people dont pay they loans or others want to take out they savings all at once bank will crash. Its the same with bitcoin, so bitcoin is not worse than bank in that regard!

TL;DR
Bitcoin bubbles popping - go shopping to btc merchants.



Okay, let’s say there are three main players in Bitcoin economy:

• Speculative traders who are looking for btc value to drive up.
• Merchants who are trying to leverage their goods distribution chain position to get a longer end of a deal.
• Savers/consumers who are the normal working people paying for the whole banquet.

Let’s see how they interact with each other:

• Traders and Savers push against each other meeting at consensual currency valuation. When optimism prevails savers buy money out of speculative circle fueling offer shortages and perpetuating optimism. When tides turn money grab commences and traders hurry to pull value out of btc. And so do savers. Or should they turn consumers?
• Consumers and Merchants pull each other legs to get a better end of a deal. Merchants get goods cheaper but so they must arrange their distribution and that is costly (unless they sell information). And consumers can offer depreciating currency to get valuable goods and services now and leave “the problem” to the merchants.
• Merchants and Traders wrestle for currency viability. If a merchant can not pay supplier upper on the chain with btc - he has to go through traders to acquire acceptable currency. Starving speculative capital of money flow by spinning bitcoins inside ecosystem sustains economy and dampens bubbles amplitude.

So looking on this from regular people’s eyes I’d really recommend to go shopping when bitcoin bubbles pop instead of dumping your savings on gox and making situation worse. Savers/consumers and merchants can dampen bubbles together.

After all you may want to follow George W. Bush advise but do it for better life and with bitcoins, not green rectangular papers for war:

http://www.youtube.com/watch?v=fxk9PW83VCY

What do you think?