Topic: Hoarding Vs. Spending - page 2. (Read 4136 times)

I use FIAT prices as a rough guide however I actually offer lower prices in return for Bitcoin so I would say that my FIAT and BTC quotes are separate. I tend to quote a price I feel is appropriate at the time, sometimes factoring in the direction I feel the market is heading. I do see the issue you are getting at though, it is also the basis for my questions in regards to the OP, until the community is spend and buy we dont really know the value beyond what is speculated. Once I know what my 0.4BTC is worth over extended periods, irrespective of FIAT I can the provide quotes without thinking about FIAT at all.

The printing of fiat currency is in no way like how the crypto economy works. You cannot simply "print" Bitcoins this way as you can't just create new physical gold out of nothing either. After 21 Million that is all the coins there will ever be, and no more can be created after that, ever. With the Dollar they just keep printing sheet after sheet of worthless money with zero intrinsic value or rarity. To have the majority of hashpower worldwide would be very difficult and VERY expensive to do, plus this is why the network is metered to combat anyone just plopping a million Mhash rig on it and cleaning house. The addition of more power just makes mining that much harder to do. Whether the network is a single CPU or a giant hashfarm, coins only come into the system every 10 minutes, and the amount of them rewarded per block only decreases over time.

But, should probably not hijack this thread....

This rarity and difficulty in creation is what gives Bitcoin an inherent value as it took a lot of work to make them. Even when they pass the stage of a commodity, they will still continue to appreciate as Bitcoins are destroyed, kind of like a built in savings account interest whether you spend it or save it. Not a bad idea to keep some for later at this stage. China is getting on board with their own government educating their people about it, The Push 2 is on the way I think. BTC is starting to rise once more, and slowly.

Problem is not with hoarding per se, but with hoarding by miners (a.k.a. the central banks of bitcoin economy). It's everyday people who make a currency what it is, by using it to track the daily exchange of goods and services between themselves. Miners' only responsibility (aside from keeping the block chain alive and intact) is to seed enough bitcoins into circulation in order to grease enough of those daily exchange transactions between people.



But are you charging in fiat-based prices, or BTC-based prices? By that I mean, are you relying on speculative exchange rates when setting your prices?

Interesting thoughts, I guess hoarding is only an issue if everybody does it and the same principle applies to spending. I do still feel that more spending will boost the long term potential of Bitcoin though. I have found that people seem a lot more inclined to pay for services such as freelance with Bitcoin which is interesting, perhaps it is just the niche area I have been catering too. I have made perhaps 75% more from working on freelance projects then I have in the past using FIAT, has anyone else experienced this? The same goes for funding now that I think about it, people are always offering to fund random projects lol.

You can do that with bitcoin, provided you have the majority of the hashing power... Think "base units" per bitcoin (see "Output value"). This is only a hint, not an explanation.

Though if fiat operated on a similar protocol, it isnt fiat, it is another cryptocurrency. Not to say the government wouldn't like to operate a centralized version of Bitcoin only they control, though if they left the mathematical constants in place this control would not necessarily afford them many benefits.

The power of fiat for them is the ability to endlessly print new money. This money they mostly just give to themselves, creating a disgusting system of corruption.

The only problem with your logic is that bitcoin represents "bad" money. Question is will it ever be used as legal tender? Because, if you had not noticed, in order for Gresham's Law to take effect both forms of money must be represented as legal tender, at equal value.

What we are discussing here is called Gresham's Law
http://en.wikipedia.org/wiki/Gresham's_law

Bad Money Drives Out Good.
The idea is that when bad money is in circulation, good money will go into treasure troves, hoarding, offshore, it will flee the marketplace to places of safety hiding.

When a currency is debased, as happened in the USA in the 60's when they stopped putting silver in the coins, all the silver coins left the market place as quickly as the cashiers could discover them, put them in their pocket and replace it with a new debased coin.

We have this today with bitcoin.  However, bitcoin is also a social phenomenon.  I do trade my bitcoins, but I do so with people I feel some affinity for or with whom I have a sense of alliance. 
Currently, this is most any other honest person who trades in bitcoin, because our universe is so small.
I always thank those that purchase my New Liberty Dollar silver pieces in bitcoin, as I know they are honoring me in the same way.

So we have this dilemma, to hoard, or to spend.  The answer of course is to do both.  Spend especially with those who are either new to bitcoin, or who you may cherish for some reason.  The more that start posting out in the open the beautiful "Bitcoin accepted here" graphic, the more bitcoins will be a useful currency.
https://en.bitcoin.it/wiki/Promotional_graphics

I'm surprised that no one, even remotely, considers the possibility that fiat currencies may eventually be run on a protocol similar to bitcoin, with the government mining pool representing more than 51% of the hashing power of such block chain.

How do you get the smartest people to work on the next technological breakthrough?... You let them run amok with bitcoin!  

When this happens, the value of bitcoins won't be measured in units of fiat.  Purchasing power will be measured with how much can be bought with a particular amount of bitcoins or how many bitcoins it takes to purchase a particular good or service.  Of course there will be those that claim constantly declining prices are detrimental to an economy, but they will eventually fade away—like all of those people that used to think that Earth was flat.

The commodity nature of Bitcoin will dissolve eventually. As long as it is interfaced with fiat and used as a speculative tool it will just be this way for the time being.

Though once fiat fails completely (and it will in the very near future I think) a Bitcoin will simply be worth a Bitcoin, as any valuation in USD or other fiats will be absolutely meaningless if they are so hyperinflated as to be basically worthless. The markets will have to readjust after that, it is difficult to say if fiat is no longer viable what prices would become, as fiat can't be used as a reference any longer to the price of goods and services.

For now, hoard some, but do your part and spend some too to help the economy grow and get it adopted by businesses. The only reason I have yet to spend any is that there is simply nothing I need at the moment that can be bought with BTC. Unfortunately my local grocer hasn't caught on yet  

"Hoarding" gives it a negative tone in terms of saving unless you really are just stuffing every BTC you earn into a paper wallet assuming they will have a much larger fiat value someday, as if they are real gold. What is wrong with having a savings account? Usually that is encourage by financial institutions and financial people...

Yes, there are people out there that are willing to hoard their bitcoins for now and spend them later, but it's not a problem at all.  In fact, it's the "hoarding is a problem" mentality that is so prevalent amongst bankers and politicians, and their insistence that "something must be done" that is, in part, leading to the demise of their fiat currencies.  Fortunately, there is very little they can do to discourage hoarding when it comes to bitcoins.

keep all your money in bitcoin then try and save what you can. Spend bitcoin where you can and only convert back to fiat when you need to.

As the price goes up and they become more valuable, people will be more willing to spend them on more fiat value items. The market cap is still too small to hold much value, you can't have a big economy without the value base to go with it.

If I only have $1000 in coins I took an effort in obtaining, I'm not going to spend them. If they were to be worth $10k, I would be very much open to spend some of them. If they became $100k then I would be spending a whole lot more again.

If you were sitting on a million dollars in cash separate to your every day account and expenses, would you be able to no spend a cent of it? See a nice watch, phone, car, etc. that you would normally not buy, you would have second thoughts about it when you got spare wealth that you don't need.

Maybe the long term success depends on users that hoard and never spend their coins?

1. There will be no scalability issues because people won't create that many transactions

2. The price will always go up because bitcoins are really scarce in comparison with world population, the publicity is increasing and the supply is decreasing

3. If people know that the price will always go up, they have no reason to sell bitcoins unless they really need to buy something

Thus the system rewards hoarding, and hoarding is good for everybody. There is absolutely no reason to spend bitcoins unless you starve or don't have fiat income.

Hmmm, well I have been spending half my Bitcoin income each year, I like the trajectory of that balance sheet a lot better.   

If you add another zero to those figures, then it starts to sound kind nice.

I spend bitcoins just like I would do with my fiat money. If I need something I look at and compare prices, if it is cheaper in bitcoins I will buy in bitcoins otherwise I use fiat.

There is no such thing as continuously spending anything!

You are constantly holding onto one thing or another.  You aren't spending your house.  therfore you are hurting the housing market.  You aren't spending your organs therefore your hurting the organ market.

If you spend your bitcoin,  then you start to hold onto whatever you just bought and are now hurting THAT market.

You hold onto something because you believe it will be useful at some time in the future.  It is impossible to buy something and use it at the same time.  You might buy a hot dog because you plan on eating it a few seconds from now. You hold bitcoin in order to use it at some time in the future,  5 seconds from now or 5 years from now.  The principle is the same.

asking people not to hoard is not to improve the bitcoin economy. ...

It's merely a way to convince people to sell you their bitcoin at a cheaper price.

lol. I feel like I'm taking crazy pills!

If your not spending it then your hurting bitcoin.