Let's see if increase in price of btc leads to less spending and more hoarding

SomeWhere

member

Activity: 71

Merit: 10

Quote from: niko on March 09, 2013, 02:11:17 PM

Quote from: SomeWhere on March 09, 2013, 02:00:29 PM

Quote from: niko on March 09, 2013, 12:13:43 PM

Quote from: SomeWhere on March 09, 2013, 11:56:32 AM

I don't think donations have a significant correlation with spending or saving behaviours.

The motivation behind donating is very different from the motivation behind spending.

I (and proponents of the "deflationary danger" theory) speak of the motivation to not spend, not to spend. The presumed disincentive to spend should also apply to donating.

No. That would still imply that the motivation of donating would only vary on the bipolar spectrum of having vs not having the money.

I believe that there is another factor when it comes to donating that has a much more prevalant influence - belief, activism, humaneness, politics, call it what you want, but it's not primarily economic in nature.

I see your point, but don't you think the two driving forces are balancing in each act?

Personally, no. But that's of course a subjective opinion. I believe for donations, the economic dimension is mostly irrelevant, so there won't be any correlation between economic growth and the number of donations - volume (as in amounts per donation) possibly more so, but still way less than normal spending.

niko

hero member

Activity: 756

Merit: 501

There is more to Bitcoin than bitcoins.

Quote from: SomeWhere on March 09, 2013, 02:00:29 PM

Quote from: niko on March 09, 2013, 12:13:43 PM

Quote from: SomeWhere on March 09, 2013, 11:56:32 AM

I don't think donations have a significant correlation with spending or saving behaviours.

The motivation behind donating is very different from the motivation behind spending.

I (and proponents of the "deflationary danger" theory) speak of the motivation to not spend, not to spend. The presumed disincentive to spend should also apply to donating.

No. That would still imply that the motivation of donating would only vary on the bipolar spectrum of having vs not having the money.

I believe that there is another factor when it comes to donating that has a much more prevalant influence - belief, activism, humaneness, politics, call it what you want, but it's not primarily economic in nature.

I see your point, but don't you think the two driving forces are balancing in each act?

SomeWhere

member

Activity: 71

Merit: 10

Quote from: niko on March 09, 2013, 12:13:43 PM

Quote from: SomeWhere on March 09, 2013, 11:56:32 AM

I don't think donations have a significant correlation with spending or saving behaviours.

The motivation behind donating is very different from the motivation behind spending.

I (and proponents of the "deflationary danger" theory) speak of the motivation to not spend, not to spend. The presumed disincentive to spend should also apply to donating.

No. That would still imply that the motivation of donating would only vary on the bipolar spectrum of having vs not having the money.

I believe that there is another factor when it comes to donating that has a much more prevalant influence - belief, activism, humaneness, politics, call it what you want, but it's not primarily economic in nature.

niko

hero member

Activity: 756

Merit: 501

There is more to Bitcoin than bitcoins.

Quote from: SomeWhere on March 09, 2013, 11:56:32 AM

I don't think donations have a significant correlation with spending or saving behaviours.

The motivation behind donating is very different from the motivation behind spending.

I (and proponents of the "deflationary danger" theory) speak of the motivation to not spend, not to spend. The presumed disincentive to spend should also apply to donating.

SomeWhere

member

Activity: 71

Merit: 10

I don't think donations have a significant correlation with spending or saving behaviours.

The motivation behind donating is very different from the motivation behind spending.

paraipan

legendary

Activity: 924

Merit: 1004

Firstbits: 1pirata

Quote from: yucca on March 07, 2013, 10:42:31 AM

Quote from: Rygon on March 06, 2013, 11:47:55 AM

Can we please stop using the Keynesian slur "hoarding" when talking about saving money? The term "hoarding" is more closely associated with the psychological disorder of collecting items to a point where it negatively affects their lives.

I second that motion!

Third-ed!

Lethn

legendary

Activity: 1540

Merit: 1000

Quote from: yucca on March 07, 2013, 10:42:31 AM

Quote from: Rygon on March 06, 2013, 11:47:55 AM

Can we please stop using the Keynesian slur "hoarding" when talking about saving money? The term "hoarding" is more closely associated with the psycological disorder of collecting items to a point where it negatively affects their lives.

I second that motion!

Motion thirded? Cheesy

There's an awful lot of neo-keynesian propaganda on this board considering it's about a decentralised currency.

yucca

full member

Activity: 217

Merit: 100

Quote from: Rygon on March 06, 2013, 11:47:55 AM

Can we please stop using the Keynesian slur "hoarding" when talking about saving money? The term "hoarding" is more closely associated with the psycological disorder of collecting items to a point where it negatively affects their lives.

I second that motion!

dg2010

sr. member

Activity: 462

Merit: 250

Quote from: Timep34 on March 06, 2013, 10:52:08 AM

Can you explain this? Why is it wasted?

Because you only realise the value when you spend it.

thoughtfan

hero member

Activity: 784

Merit: 506

Quote from: Rygon on March 06, 2013, 11:47:55 AM

Can we please stop using the Keynesian slur "hoarding" when talking about saving money? The term "hoarding" is more closely associated with the psycological disorder of collecting items to a point where it negatively affects their lives.

Yes I suppose it does have negative connotations looking at it that way. I tend to think of squirrels stashing away their nuts and acorns for tougher times ahead. The difference is the squirrel's time of shortage ahead (winter) is predictable and of limited duration. Ours (the consequence of decades of crazy government/central bank/private bank actions) is of unknown severity and of unknown duration therefore hoarding more is generally a good plan in my book

Rygon

hero member

Activity: 520

Merit: 500

Can we please stop using the Keynesian slur "hoarding" when talking about saving money? The term "hoarding" is more closely associated with the psycological disorder of collecting items to a point where it negatively affects their lives.

dancupid

hero member

Activity: 955

Merit: 1002

Whenever I see a 'donate with paypal' button I can't be bothered jumping though hoops - it's so easy to donate with bitcoin, that the trivial effort required make's me want to use bitcoin even though I'd rather dump my fiat.
It's the convenience that makes spending bitcoin attractive.

thoughtfan

hero member

Activity: 784

Merit: 506

Quote from: Mike Christ on March 04, 2013, 09:13:56 PM

Another interesting thing to point out: if over 21 million people adopt BTC, the average person can't have an entire BTC to their name Tongue

So yeah, hoarding is just an early adopter thing.

People will still be able to hoard hundreds of thousands of satoshis! I don't follow the assumption just because the number of bitcoin representing their their wealth is small compared today that that will influence their tendency to save or not.

Timep34

newbie

Activity: 39

Merit: 0

Quote from: Mike Christ on March 04, 2013, 09:13:56 PM

Another interesting thing to point out: if over 21 million people adopt BTC, the average person can't have an entire BTC to their name Tongue

So yeah, hoarding is just an early adopter thing. The more popular BTC gets, the faster it gets popular, and the less people will bother to hoard, as there won't be much to hoard by the time it gets that popular. Of course, everyone will (hopefully) have a little bit in savings, and spend on what they want and need like they would in fiat. After all, wealth earned and not spent is wealth wasted.

Can you explain this? Why is it wasted?

niko

hero member

Activity: 756

Merit: 501

There is more to Bitcoin than bitcoins.

Quote from: johnyj on March 05, 2013, 09:14:36 PM

The theory I heard is that if you have two currency, people will tends to spend the inflation one and keep the deflation one. Since wikileak only accept bitcoin donations, this might not be a good example Roll Eyes

Now, that's a good point, but it assumes that donating to WL is something donators must do, so they have no choice but to spend their precious coins. I'd say no way; WL donation is not food or water or urgent surgery.

Just thought of a better way to answer the original question, but it's beyond my ability at the moment: look at the age of mined coins (age of first-time spent coins vs. price or price trend). Coinbase addresses are easily available, so this is easy for solo miners, but to get more data we should look at the pool payouts, not just the block reward (coinbase) transactions. This would clearly show if people tend to hoard more when price is rallying, and are easier to spend on the way down.

Finally, the big picture: assume all the coins are mined, and they are valuable enough so rate of loss is negligible. Fixed supply. If the economy available to coins grows, the value goes up. Perhaps people start spending less because of this, so the economic growth slows down a bit, at least until people get used to the higher value of coins and start spending more easily. If the economy shrinks, the value of coins goes down, making them easier to spend, thus stimulating the economy. I see no problem, and would love to live in a world like that.

johnyj

legendary

Activity: 1988

Merit: 1012

Beyond Imagination

The theory I heard is that if you have two currency, people tends to spend the inflation one and keep the deflation one. Since wikileak only accept bitcoin donations, this might not be a good example Roll Eyes

niko

hero member

Activity: 756

Merit: 501

There is more to Bitcoin than bitcoins.

Quote from: pretendo on March 04, 2013, 04:04:01 PM

What exactly was the expected correlation? Let's not pretend that donations account for a substantial part of any economy

It doesn't matter how big part of an economy involves donations. Donations involve 100% of donations, and that is the data set we are looking at. People who did donate obviously did so regardless of price trends, proving false the hypothesis that "deflationary currency decreases willingness to spend". By "deflationary" they mean currency whose purchasing power is increasing (regardless of inflation or deflation of monetary base).

davecoin

hero member

Activity: 816

Merit: 1000

Quote from: Mike Christ on March 04, 2013, 09:13:56 PM

Another interesting thing to point out: if over 21 million people adopt BTC, the average person can't have an entire BTC to their name

That's a disturbing thought!

Mike Christ

legendary

Activity: 1078

Merit: 1003

Another interesting thing to point out: if over 21 million people adopt BTC, the average person can't have an entire BTC to their name Tongue

So yeah, hoarding is just an early adopter thing. The more popular BTC gets, the faster it gets popular, and the less people will bother to hoard, as there won't be much to hoard by the time it gets that popular. Of course, everyone will (hopefully) have a little bit in savings, and spend on what they want and need like they would in fiat. After all, wealth earned and not spent is wealth wasted.

DarkBet

full member

Activity: 238

Merit: 100

I dont think hoarding is longterm problem at all and just something that will benefit us early adopters.

If Bitcoin grows in popularity it will be increasingly easier to buy and then for many it will be used simply as a intermediate, or what its called, people just fund their "Bitcoin internet shopping account" weekly or just prior to making a purchase and at that point the value stabilizes as the potential is pretty much mapped out

Topic: Let's see if increase in price of btc leads to less spending and more hoarding (Read 2588 times)