"Gresham's Law" Bad money drives out good
http://www.investopedia.com/terms/g/greshams-law.asp
Investopedia explains 'Gresham's Law'
Coins were first made with gold, silver and other precious metals, which gave them their value. Over time, the amount of precious metals used to make the coin decreased because the metals were worth more on their own than when minted into the coin itself. If the value of the metal in the old coins was higher than the coin's face value, people would melt the coins down and sell the metal. Similarly, if a low quality good is passed off as a high quality good, then the market will drive down prices because consumers won't be able to determine the good's real value.
Topic: Effects of hoarding on trading - page 2. (Read 4613 times)
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
If you rebuy the spent BTC immediatelly back, there is no reason to not spend Bitcoins. In fact this way you helping your saved BTC gain value and you loose nothing
This is exactly what I also do, although I have to admit that there's not much (yet) I can buy / have bought with Bitcoins (although not nothing!).
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
If you rebuy the spent BTC immediatelly back, there is no reason to not spend Bitcoins. In fact this way you helping your saved BTC gain value and you loose nothing
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
If hoarding Bitcoins is good, sellers will want to hoard Bitcoins, which will mean they will offer buyers lower prices for paying in Bitcoins.Why do gas stations ever sell gas? They know they can wait until tomorrow when the price of gas will be higher due to inflation. Simple reason: The price of gas *today* already takes inflation into account.
Same for Bitcoins. The price of Bitcoins today already takes into account the fact that people want to hoard them.
Or, to put it another way, if you felt this way, why would you ever buy anything with dollars unless you had no choice? Why would you handle dollars at all?
Hi all,
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
For tax reasons - it makes more sense for me to convert to BTC and then buy whatever I need. (I am assuming my couple of stored BTC will appreciate in value)
Ideal is spend all your fiat as fast as you can because of inflationary nature. And if you cant convert all to Bitcoin, then spending fiat has priority for me. Getting paid in Bitcoins would help, I agree
Good to see everybody's thoughts. I agree that until people are still getting paid in fiat which is hugely inflated compared to bitcoin, people would continue to buy using fiat. Bitcoin gambling website is what I am getting into making ! Ha 
This is a great question and an issue for any deflationary currency like bitcoin. If you expect it to be worth more tomorrow, why would you ever spend it today? This is why I think bitcoin will be more of a store of value rather than a medium of exchange if it is successful.
I agree with the others though that spending bitcoin is the best way to further its adoption, so it is an interesting issue.
Did you ever buy a PC or laptop?I agree with the others though that spending bitcoin is the best way to further its adoption, so it is an interesting issue.
Why did you do that? You could buy a better one for the same money if you wait.
This is more a problem of hyperdeflation than deflation.
But Bitcoin will have to go through hyperdeflation for a while in order to become mainstream.
This is a great question and an issue for any deflationary currency like bitcoin. If you expect it to be worth more tomorrow, why would you ever spend it today? This is why I think bitcoin will be more of a store of value rather than a medium of exchange if it is successful.
I agree with the others though that spending bitcoin is the best way to further its adoption, so it is an interesting issue.
I agree with the others though that spending bitcoin is the best way to further its adoption, so it is an interesting issue.
It is beneficial to the Bitcoin community and often more straightforward to buy stuff with bitcoin so I spend some of mine from time to time, almost regardless of the exchange rate. I was spending them freely when the exchange rate was under twelve bucks! 
Using bitcoin for payment then rebuying is a good idea too.
Using bitcoin for payment then rebuying is a good idea too.
Hi all,
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
just because the market is 1 BTC = $200 USD at the moment doesn't mean everyone must exchange freely at that rate. You chose not to (you would rather buy BTC with USD), others choose to do so (sell BTC for USD).
Hi all,
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
From my experience as a merchant that accepts bitcoin your right. When the price is rising rapidly barely anyone is purchasing items from me with BTC. When the price is crashing I get a flood of orders.
You could use Bitcoins and rebuy them (at least if it's not too much of a hassle to get them).
I think a lot of people prefer saving their money in Bitcoins instead of trying to spend it though, because they see it more as a good investment.
Also don't forget everyone gets paid in fiat right now, if people got their paycheck in Bitcoins they would use them way more to buy stuff.
And currently Bitcoin has to be hyperdeflationary in order to get a magnitudes higher market cap, another point towards investing instead of spending it.
I think a lot of people prefer saving their money in Bitcoins instead of trying to spend it though, because they see it more as a good investment.
Also don't forget everyone gets paid in fiat right now, if people got their paycheck in Bitcoins they would use them way more to buy stuff.
And currently Bitcoin has to be hyperdeflationary in order to get a magnitudes higher market cap, another point towards investing instead of spending it.
Hi all,
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
Just last month I went to a site which was selling some tickets and they accepted both bitcoins and fiat currency . In this case, of course I choose to pay via fiat currency because I didnt want to spend my bitcoins. Within a week, bitcoin value went up by 15% !!
My point is , due to deflation, why would people spend bitcoin instead of fiat currency to buy regular items like electronics, shoes, groceries etc. I see lots of these sites coming up, but I am not sure what is the volume of business these sites are doing. Of course bitcoin is the currency of choice to buy stuff like drugs and in a decentralized fashion. Would it still make sense for businesses like Amazon (that anyway ask you to enter personal details) to accept bitcoins, seeing that fact the so much hoarding is going on.
I want to know what is general thoughts of the community on this.
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