Cold storage/physical bitcoin wallets killing bitcoin economy?

ranochigo

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Quote from: phishead on September 24, 2015, 05:13:43 PM

Quote from: bitcoinluv79 on September 24, 2015, 05:06:46 PM

No it won't kill the economy...it's similar to if you were hoarding a bunch of cash instead of letting it sit in a bank...
I mean it's not exactly the same, considering cash can be made instantly and out of thin air (as "credits" like banks do)

That's exactly what I was trying to get at...

Since we know that there can only be 21 million btc ever in the world, and people have already lost up to an estimate of 1-2 million btc already... since more and more people are hoarding their btc's, that would mean an even less amount of the total amount of btc's out there would exist.

When you give the example of a person hoarding cash in a safe, that isn't an entirely acceptable analogy, because the Fed can literally just print out new notes and life will go on... I see it differently with bitcoins.

Bitcoins aren't always kept unused when stored in a cold storage, hardware and paper wallets are there to provide more security against malware theft. Bitcoin can also be lost if a private key gets lost or someone send the Bitcoin to an address like this. If there is a shortage of Bitcoin, the smallest denomination of Bitcoin can be changed to include more decimals. If needed, a hardfork can be done to increase the total possible amount of Bitcoin, this needs the agreement of the miners and everyone using Bitcoin.

knowhow

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Well the supply and demand at bitcoin looks like hasnt power enought to make it go up or down,since as i know the demand and supply looks the same as bitcoin usually moves a bit daily soo there is some 0 new interest into getting more as into sell more bitcoins.

pereira4

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Bitcoin can be divided infinitesimally (or almost), there's never going to be a problem of liquidity, I think that concept is absurd. As long as there is demand, there will be liquidity. People is free to hoard or to spend it.

figmentofmyass

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Quote from: mallard on September 24, 2015, 05:32:38 PM

Surely less money in circulation would make it worth more?

i think this is a bit more complex. i don't think we can approach this question in a vacuum (on its own). from a currency perspective, velocity of money is affected by too many factors to approach it the same as "low supply = high demand." yes, fixed supply means higher demand (higher value) than an unlimited supply.

but that doesn't speak to the issue of hoarding. on one hand, hoarding = less btc liquidity to exchanges --> less sell demand. on the other hand, without some level of money velocity (value transfer among network participants), the network eventually becomes worthless, as no one uses it to transfer value. it's a tricky question. economics is opaque as hell.

MicroGuy

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Quote from: phishead on September 24, 2015, 04:57:41 PM

I was just thinking about this the other day... if more and more people are buying bitcoin wallets to store their bitcoins in, and spend a lot of money to buy cold wallets in general to hoard their bitcoins, wouldn't this kill the bitcoin economy? I would think over a period of time the more people will do this, the more bitcoins will not be regarded as a legit currency... just more as a commodity.

No. What's killing Bitcoin is the lack of core developer consensus and stagnant innovation. When Satoshi vanished, he apparently took all the creativity along with his 1,000,000 plus bitcoins. Sad

If the core devs can't agree on a single line of code change, how will they ever manage to innovate?

mallard

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Surely less money in circulation would make it worth more?

tommorisonwebdesign

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There isn't anything wrong with keeping your bitcoins saved in a secure place. If I were to store $1 million in a bank it is definitely not going to hurt the mainstream economy. Savings are not a concern to the price of bitcoin. More awareness of the technology and its awareness is needed to boost the economy.

dre1982

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I think it would even stimulate the economy. If there is less to sell then people want the price will raise.Just a case of ask and demand. So just let the one who invest in Bitcoin take it in cold storage.

phishead

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Quote from: bitcoinluv79 on September 24, 2015, 05:06:46 PM

No it won't kill the economy...it's similar to if you were hoarding a bunch of cash instead of letting it sit in a bank...
I mean it's not exactly the same, considering cash can be made instantly and out of thin air (as "credits" like banks do)

That's exactly what I was trying to get at...

Since we know that there can only be 21 million btc ever in the world, and people have already lost up to an estimate of 1-2 million btc already... since more and more people are hoarding their btc's, that would mean an even less amount of the total amount of btc's out there would exist.

When you give the example of a person hoarding cash in a safe, that isn't an entirely acceptable analogy, because the Fed can literally just print out new notes and life will go on... I see it differently with bitcoins.

bitcoinluv79

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No it won't kill the economy...it's similar to if you were hoarding a bunch of cash instead of letting it sit in a bank...
I mean it's not exactly the same, considering cash can be made instantly and out of thin air (as "credits" like banks do)

Lauda

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Terminated.

Why would this be killing the economy? If I save millions of dollars in cash, is this hurting the economy? Aside from decreasing the supply there is no greater affect. I do not want someone to be able to paste an address and press 1 button to send of thousands and thousands of $ of my money. To prevent this people are using cold storage/hardware wallets/other solutions to keep the majority of their holdings safe.

phishead

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Keep what's important, and know who's your friend

I was just thinking about this the other day... if more and more people are buying bitcoin wallets to store their bitcoins in, and spend a lot of money to buy cold wallets in general to hoard their bitcoins, wouldn't this kill the bitcoin economy? I would think over a period of time the more people will do this, the more bitcoins will not be regarded as a legit currency... just more as a commodity.

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