What is wrong with costless hoarding? I'm not convinced there is any problem with it. Some people will hoard and some will invest, it all depends on the person and their incentives. If there is money to be made through investing- people will invest. If not they won't. People won't hoard if they dont' have some better alternative. Currently hoarding is the status-quo among cryptocoins because there just isn't very much of value to do with the coins themselves.
Because costless hoarding is impossible with REAL assets, everything in our world decays, entropy is inevitable. When you accumulate a surplus of goods to have as a reserve for future consumption that is perfectly natural and good, but their will be an inevitable cost in decay before the reserve is consumed.
Now if we know for sure that costless hoarding is impossible with real physical assets, yet money which is entirely a social construct of man appears to allow that which the laws of physics forbid. How can that be reconciled? The laws of physics ALWAYS trump social constructs, their is no costless hoarding even with money, money is simply causing a cost-shifting from the hoarder to the rest of society (which we call usury) which is why we can't ALL hoard at no cost, someone must always lose.
Your last point about "hoarding because their is nothing to do with the coins" is the classic supply-side economic error, the belief that is the fault of a 'supply' for not enticing money to move in the face of it's desire to remain stationary. It's argued that an increase in supply and a lowering of prices will entice money to move, but if the prescription is for continuing declines in price then how ever tempting it may be to purchase on the first drop in prices the expected future infinity of price declines constitute an even strong incentive to keep hoarding.
The reality is their is nothing to do with the coins because they are being hoarded, remove the hoarding incentive and the uses will spring up.
"Because costless hoarding is impossible with REAL assets"
But is our current financial system really "REAL" assets anyway? When the financial crisis hit, hundreds of billions of dollars in wealth were 'destroyed' but did they ever really exist? It's free to hoard Zeros.
"money which is entirely a social construct of man appears to allow that which the laws of physics forbid. How can that be reconciled? The laws of physics ALWAYS trump social constructs"
LOVE man. I disprove you with LOVE. Social Construct. Trumps Physics. Free to Hoard. The more you divide it, the more of it you have. All you need is love.
(But seriously, I'm being serious.)
"the classic supply-side economic error, the belief that is the fault of a 'supply' for not enticing money to move in the face of it's desire to remain stationary"
Money doesn't have a desire to remain stationary. It's not like the money in my wallet wants to jUmP OuT! I have to have something to spend it on. If I'm all alone in the middle of the ocean and there is no one and nothing that accepts money for anything, I don't just take what cash I have and toss it to the seagulls. I wait until some point in the future when I get somewhere (or when someone gets to me) that DOES take my money and then I make exchanges. Crypto-currency is a money on an island without any goods for sale.
The real error I think is in forgetting that as this is sort of a 'virtual' currency that is being bootstrapped the conditions are a bit more novel then traditional money. None of us really know each other, nor can reach each other. So it's very hard to find goods and services that are both in demand, and can be exchanged over either great distances or mediums. If this were an "in person" or REAL currency and all of us were in close proximity then we wouldn't have this dearth of economic opportunities. If there were nothing to sell people would at the very least turn to services or prostitution.
Not surprisingly this is what actually happens: Monkeys when taught the basics of money almost immediately turn to prostitution.
http://www.nytimes.com/2005/06/05/magazine/05FREAK.html?pagewanted=all&_r=0But this only works, once again, in person. In virtual world we are struggling to find places to spend our money, but we don't waste it just because we have nothing better to do with it. So classic error, I think not.
