Topic: Bitcoin does not need to be spent constantly to maintain its value - page 3. (Read 1904 times)
December 10, 2015, 03:27:03 PM
Hoarding works to increase value untill it reaches the point where everyone sells. But Without buying and selling products mass adoption cant happen due to no where to spend them.
December 10, 2015, 03:17:04 PM
I find it hilarious when some people would get pissed off at the fact that you wouldn't use your Bitcoin frequently for transactions and just hoard. It's like they want to tell you what to do your money, when the fundamental point of Bitcoin is precisely this fredoom to do whatever you want.
Nonetheless I still believe in a worldwide accepted Bitcoin that success to scale to global levels, we should aim for that in any case.
Nonetheless I still believe in a worldwide accepted Bitcoin that success to scale to global levels, we should aim for that in any case.
Any rational person would first spend fiat money which lose its value constantly, they would get rid of fiat money as quick as possible in order to not be hurt by inflation, while they will hold bitcoin as long as possible in order to gain from deflation
If you have 10 bitcoin and 4K dollar, which one do you spend first?
December 10, 2015, 03:04:38 PM
I thought that hoarding = less monetary supply = more value. Doesn't hoarding promote bitcoin's value then?
December 10, 2015, 03:02:16 PM
I find it hilarious when some people would get pissed off at the fact that you wouldn't use your Bitcoin frequently for transactions and just hoard. It's like they want to tell you what to do your money, when the fundamental point of Bitcoin is precisely this fredoom to do whatever you want.
Nonetheless I still believe in a worldwide accepted Bitcoin that success to scale to global levels, we should aim for that in any case.
Nonetheless I still believe in a worldwide accepted Bitcoin that success to scale to global levels, we should aim for that in any case.
December 10, 2015, 02:43:34 PM
There is a common misleading concept: Money's value comes from its transaction demand, without transaction demand money worth nothing
The reality is, throughout human history, money's value has never come from transaction demand, be it grain, gold, or fiat money. It comes mainly from the property that it can be trusted to hold value in a relatively long time, and secondly it can be accepted widely
No matter how much the transaction demand is, if a money is quickly losing its value every day, it will be refused in transaction. This is also the first mandate of FED, e.g. low inflation rate
Whether a person trust certain kind of payment medium depends on his financial knowledge. Some people would like to accept Euro when they are in US, because they often travel to Europe and know that Euro is accepted there. Managers of large enterprises would accept stocks and options as payment medium because they know they can liquidate them at exchanges for fiat money any time
From this point of view, as long as people knows there is an easy and quick way to exchange their bitcoin for fiat money, then they would accept them the same way as they accept foreign currency, stocks or options
Bitcoin is not used a lot in transaction. Its value ultimately comes from people's trust of its limited total supply, thus continuous purchase of bitcoin to store value. It is a superior form of store of value given you have enough IT skill
For traditional money, you need merchant acceptance to be useful, so it never goes beyond boarder of a country. But bitcoin is more universal form of money, you don't really need merchants to accept the payment, you can easily exchange to what ever currency they accept. It is amazing that you can exchange it to any currency on localbitcoins, no other currency in the world have this kind of worldwide exchangeability
Of course with the help of payment processors, merchant will also accept bitcoin. But since most of them just convert to fiat money behind the scene, it is still exchanges that matters most. And who is buying on exchanges? Those people who purchase bitcoin for long term saving or speculation, and international remittance sometimes
The reality is, throughout human history, money's value has never come from transaction demand, be it grain, gold, or fiat money. It comes mainly from the property that it can be trusted to hold value in a relatively long time, and secondly it can be accepted widely
No matter how much the transaction demand is, if a money is quickly losing its value every day, it will be refused in transaction. This is also the first mandate of FED, e.g. low inflation rate
Whether a person trust certain kind of payment medium depends on his financial knowledge. Some people would like to accept Euro when they are in US, because they often travel to Europe and know that Euro is accepted there. Managers of large enterprises would accept stocks and options as payment medium because they know they can liquidate them at exchanges for fiat money any time
From this point of view, as long as people knows there is an easy and quick way to exchange their bitcoin for fiat money, then they would accept them the same way as they accept foreign currency, stocks or options
Bitcoin is not used a lot in transaction. Its value ultimately comes from people's trust of its limited total supply, thus continuous purchase of bitcoin to store value. It is a superior form of store of value given you have enough IT skill
For traditional money, you need merchant acceptance to be useful, so it never goes beyond boarder of a country. But bitcoin is more universal form of money, you don't really need merchants to accept the payment, you can easily exchange to what ever currency they accept. It is amazing that you can exchange it to any currency on localbitcoins, no other currency in the world have this kind of worldwide exchangeability
Of course with the help of payment processors, merchant will also accept bitcoin. But since most of them just convert to fiat money behind the scene, it is still exchanges that matters most. And who is buying on exchanges? Those people who purchase bitcoin for long term saving or speculation, and international remittance sometimes
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