I have been waiting for the big news about the Lightning network implementation because this will definitely bring a huge push to Bitcoin. Imagine sending Bitcoin with 0 fee and instant confirmation? This solves the scalability problem that had been an issue of bitcoin for so many years, but of course development does not please everyone especially those who will be affected if this upgrade is implemented. Though I hope this will be done soon!
I'm impatiently waiting for Lightning Network activation myself but I still have my scruples about its long-term effects. I have no doubt that the price will surge to the sky once LN gets activated and established but will it contribute to real adoption in any meaningful way? Let's assume that we now have free and near-instant transactions, will that make people spend their precious coins on everyday things? Isn't Bitcoin used mostly for speculation today?
You don't pay for a cup of tea with gold, so why should you pay with Bitcoin? That question bugs me constantly. It kinda looks that hassle-free transactions aren't enough to make Bitcoin into what it was conceived to be, that is a universal means of exchange, a full-fledged currency in its own right.
on one hand you are right, you don't pay for your coffee with gold. But there are people (i know a few myself) who keep all their savings in gold and treat the gold holdings as a kind of ATM. When they need fiat money, they go out, exchange an ounce or a few ounces (a bar or coin) to A LOT OF fiat and buy things. Now imagine that this exchange is made infinitely easier - you can go out, pay with your gold and get what you wanted to buy - be it coffee, some service, petrol, whatever.
The same applies to bitcoin. Currently, to exchange bitcoin to fiat, you need to do it in large chunks, so the percentage fee consumes is kept low.
And with LN? Say you want to save bitcoins. Say, you want to save it to the point, you keep all your savings in bitcoin. You have no free money. And LN with its fee free transactions would exactly enable that - you could virtually go out with your hardware wallet full of bitcoins and be paying your everyday needs with bitcoin. And the moment your salary arrives, you could exchange it all to bitcoin knowing, that it is going to be quite easy to spend it later.
I definitely see your point and I'm not arguing with it. In fact, these dudes you are talking about have a pretty decent strategy. But this is not what I meant with my example. To tell the truth, gold was a bad choice for it because gold is mostly used as a store of value and not so much for multiplying your wealth. I just wanted to say that it is not very wise overall to spend or rather waste your capital on trivial things. People use bitcoins to earn money, and it makes sense to spend fiat thus earned, not bitcoins themselves with which you earn this fiat. It is like a woodworker selling his tools to provide sustenance to his family when he should actually sell his woodwork.
Yes I can see your point too and I am not arguing with it either
I think that many people just hodl their bitcoin and it comes with great pain when they have to depart with it. But still, you need to spend some money each month to survive. What I wanted to say is that if LN brings what it promises, than you can do BOTH: hodl whatever you can save from spending, and spend what you must, at the same time.
Then let's agree to agree!
Basically, I agree that some people may be holding their coins without doing anything else with them, but they are losing a lot of profit opportunity to multiply their wealth and capitalize on Bitcoin's volatility. Moreover, I'm strongly inclined to think that the people who are idly sitting on their coins have regular jobs, and thus they don't need to sell their stash or some part of it to provide their sustenance. On the other hand, people who are living off their cryptocapital should trade their coins if they don't want to lose it, but in that case they should earn enough fiat both to spend and reinvest it.
I would like to stress one additional thought: that with a deflational currency (bitcoin) it makes much more sense to save it than to spend it immediately. And this behaviour (saving money) whould get promotted. I think it is socially beneficial. It is in contrast with fiat: it makes much more sense to spend fiat as soon as possible, because with time it becomes less and less valuable.
In fact, money is created to be spent, not to be saved. Saving comes about as an off-target effect of one particular quality that money should have. Money should preserve its value over longer terms, otherwise it can't function as money, and this makes saving possible.
The woodworker from your example will do well to provide woodwork for his family, instead of selling it and later buying the same or similar stuff (maybe made of metal) with earned money. On the second thought I am not sure if the reworked woodworker example proves or disproves my line of thinking, but here it is anyway
You are taking my example too literally. Bitcoins right now have no practical use apart from speculation, which would justify your line of thinking. So I don't really think it is possible to use Bitcoin in the way you described, though I certainly see your point and understand what you mean here.
