Topic: Here's the problem - BitCoin users are too cheap and just want to hide it (Read 4541 times)

They are easy enough to replace so I don't think that's true.

If I could buy the things I want using bitcoins, I would. Then I'd simply purchase replacement coins on an exchange to keep my chosen level of bitcoin savings constant.

This is one of the issues of deflationary expectations, there is a strong economic incentive to save and hold than to spend. Which means that in general it takes more work to part people from their bitcoins when compared to currencies with inflationary expectations.

Anybody selling milk, coffee, eggs or bacon?

Ditto. Toys would be good too. Although you'd have to beat the experience of going from charity shop to charity shop somehow...

You and everyone with kids. I have one boy and I know exactly what you mean.

Haha.  It's completely opposite from the typical bachelor-nerd demographic of Bitcoin users, but it is something I need to buy from time to time.

You might be into something there

Here is what I would like to pay for with Bitcoins:
- My mortgage
- Inexpensive children's clothes
- My credit card and personal loan bills
- My auto insurance
- Groceries at the local store
- Gas
- BFL miners

I don't have any room in my budget for anything else, except maybe a video game every once in a while.

So, if you don't offer one of the above items, then I won't be buying from you.  Simple as that.  If I had more discretionary income, it wouldn't matter so much, and I'd buy lots of the trinkets and toys offered.  I have little interest in precious metals, or in holding much BTC, as that's just money that could be used to pay down my debts.

How can you determine that someone isn't just sending themselves a bunch of coins to keep the diff low? Won't work.

Ah; so you want owners of bitcoin to make purchases they otherwise would not have?

The point of a market economy is that both parties to a trade walk away better off than they were had they not traded.  If you encourage altruistic spending (i.e. spend for the good of the currency, rather than the good of yourself), then you are arguing that one party should trade and walk away at a loss.  How would that be a good thing?  What if everyone engaged in the behaviour you suggest?  Both parties trade, not at mutual benefit, but at mutual loss -- I'm pretty sure that ends in everyone being poorer, not richer.

Fortunately, self-interest is built in, and your cry that bitcoiners should become spendthifts won't make the slightest bit of difference.  People will buy when they have more desire for the purchase than they do for the currency.

Besides all that; I don't believe that hoarding is the problem.  It's simply that you can't expect there to be bitcoin-paying customers just because you offer to sell something.  The market simply isn't big enough yet.

Here's an example.  I don't spend a lot (other than bills) in USD or BTC.  But today, I've just bought one of these DVB-T devices.

http://www.ebay.co.uk/itm/110898287043

I wanted specifically that model for playing with software defined radio.  If I had been able to purchase it with bitcoins, I would have.  I wasn't able to though.  That's my disposable income purchase for this month; and it was in fiat.  Bad luck bitcola, you weren't selling what I wanted this month.  Maybe next month?

The fact that nobody bought your bargains doesn't mean bitcoiners are mean, it means they didn't want what you were selling.  Suck it up and offer something they do want.

Hardly. There would be no incentive to pay transaction fees. If, then, there was sudden increase in number of transactions(like satoshidice just did), it would lead to faster block generation and blockchain size would mushroom out of control, much more than it does today.  We need to mind the environment

It'd be interesting if difficulty were affected by not only block gen rate, but also by the amount if coins being sent for a given cycle.  The more commerce there is, the lower the difficulty (or at least has some weight in determining difficulty). Someone build that into an alt chain!

Holy thread necro bumping, film2240. 
It's good to know this is still true 1 year later lol

My thoughts exactly.

Good, important thread. The main problem I can see at the moment actually comes from Bitcoin's strength - namely, that BTC allows easy *spending* among a distributed network, but for buying "things" that always means paying for postage and having to wait. It's not about users being "cheap" - it's about diversity of choice, and being able to resort to existing alternatives which are a) work well enough, even if they're more expensive, or b) are large enough to support free and fast postage.

Driving spending based on the currency doesn't make much sense, long term (ironically the same problem facing major economic powers currently) - using bitcoins needs to "piggyback" on existing and *new* trading, as a better alternative to paypal etc. But, in a sense, having the "bitcoin community" come up with business ideas is somewhat arse-end-first. That's why I get more excited about existing small businesses offering to take BTC.

That's also why I think it's important to at least study what makes local economies successful or not. A lot of local currencies spring up where local trade is already doing pretty well, and people want to stop value from leaving the local system. I'm glad there's some talk of tying Bitcoins to local or "child" currencies as that, I think, is one huge area of potential of a *technological* currency (rather than a legal one). The idea of forking a blockchain is amazing because it *can* be done, even if it's not necessarily a good idea (YMMV).

Right now I'm spending a lot of time wondering where BTC could be applied in the real world, rather than worrying about hoarding BTC and hoping someone comes up with a site that doesn't get hacked. Tip jars are interesting, but I'm not sure tipping is actually fashionable at all (too much free stuff around anyway). People still like to think of consumption as a social activity, rather than creation.

Gresham's Law (the simple version): Bad money drives good money out of circulation.

In this case, BTC is the good money, and dollars and other fiat tend to drive BTC out of circulation. We want to keep our BTC (which are holding value, or even becoming more valuable) but get rid of our dollars as quickly as possible, before they become completely worthless. Normally Gresham's Law only applies when the exchange rate between the currencies is fixed, but a similar principle is in play here due to the contrast in monetary policies: market-based vs. deliberately inflationary.

In general, the currency people demand and hold and save in is the stronger of the two, and more likely to hold its value long-term. However, the weaker currency will have a higher "velocity" (which mainly benefits those imposing a tax every time wealth changes hands, not those spending or receiving it).

Given the current trends in BTC value, it really would make more sense for vendors with a stake in BTC to give discounts for paying in BTC, rather than surcharges, then hold on to those BTC rather than immediately exchanging them for USD, and make up the difference through the change in market value.

Hey TangibleCryptography I have two prepaid phones and would love to buy pin codes as my girlfriend and I use those phones a whole lot. I PM'ed you about this. You guys really are taking bit coins to a positive direction. Thank you!

After fees for trading and exchanges, Bitcoin is more expensive than fiat for me. This is a temporary problem. Also I've noticed when there is a lot of volatility, the Bitcoin stores have problems. Again, a temporary problem. You can believe I'll be spending Bitcoin when the value soars.

I don't think there are any true bears holding Bitcoin. So we hoard. It's not that we're cheap, it's just that it is safer to spend $100 in fiat money that will be going down in value, than $100 worth of Bitcoin that will be going up.

If anyone is to blame for folks not spending Bitcoin, it is merchants that are not willing to give Bitcoin discounts or simply demand Bitcoin only payments for their unique merchandise that cannot be easily bought with fiat money elsewhere. Bitcoin vendors need to be looking for niche markets and exploiting the unique properties of Bitcoin.

Examples: Ticket scalping would be an ideal business for Bitcoin only. It is for short term, last minute sales. Last minute reservations at hotels, restaurants, and transportation should be secured through Bitcoin to eliminate identity fraud. Yet none of these exist.

That's just a few reasons I'm not ready to spend Bitcoin, but I am hoarding them for the day when I will be able to do these things. Blame the market, not the customer.

i am buying (trying to buy) broken n64 controllers and broken wii controllers for btc.

Just my 2c: bitcoin is being hoarded because it lacks good and transparent investment opportunities. Many people have lost their investment so they rather buy and hold. One laudable example of transparent accounting is MPOE,hope there will be more...but it still hangs on the goodwill of its owner, and on security of its code. In practice I (and certainly, many other people, who  may even think of themselves as libertarians) find it still weaker guarantee than if it would be guaranteed by law.