There were plenty of 'bitcoin millionaires' who watched their fortune dwindle when bitcoin plummeted from a peak of $32 to just over $2 within a few months. Things are looking great now at $14+ but we must always remember there is no guarantee at all that the price will continue to rise, even in the long term. There may be a point where it's tempting to cash out and buy something nice.
That was back then when the difficulty was quite low that a decent rig could mint 2-3 coins a day. Printing $100 a pretty much guaranteed the price to crash as people cash out. 
Topic: The Bitcoin Millionaire Syndrome extreme Bitcoin speculation and Bitcoin Economy (Read 3249 times)
January 12, 2013, 01:00:35 PM
January 12, 2013, 12:57:53 PM
The whole process is driven by market forces - if I want fiat I will price my products accordingly in fiat; if I want bitcoins I will price my products accordingly in bitcoins; if I want bitcoins that I will then immediately convert to fiat, I will price my products accordingly.
The market will drive the prices - bitcoin price can be independent of fiat price (depending on what the merchant wants)
The market will drive the prices - bitcoin price can be independent of fiat price (depending on what the merchant wants)
January 12, 2013, 08:03:45 AM
There were plenty of 'bitcoin millionaires' who watched their fortune dwindle when bitcoin plummeted from a peak of $32 to just over $2 within a few months. Things are looking great now at $14+ but we must always remember there is no guarantee at all that the price will continue to rise, even in the long term. There may be a point where it's tempting to cash out and buy something nice.
January 12, 2013, 05:04:30 AM
It is the opposite of a problem. People with this view don't only want to keep what they have they want to get more. To get more they will focus their energy and attention toward providing goods and services in exchange for bitcoins making bitcoins more useful and more desirable. Doing this double fills their goals, they get more bitcoins and they make their bitcoins more valuable.
This is exactly what got me into bitcoin. Really I expect this first experiment to fail despite being first on the block, but even if that happens the concept will live on. The need for this and the fact that there are people out there who saw this need and filled it, really gives me faith in humanity.
Cryptocurrency shovels is where it's at.
January 12, 2013, 03:51:12 AM
It is the opposite of a problem. People with this view don't only want to keep what they have they want to get more. To get more they will focus their energy and attention toward providing goods and services in exchange for bitcoins making bitcoins more useful and more desirable. Doing this double fills their goals, they get more bitcoins and they make their bitcoins more valuable.
January 12, 2013, 02:26:07 AM
I have caught the Bitcoin Millionaire Syndrome. I think that some day my few Bitcoins may become worth anywhere from a small fortune to a large fortune. This means that I am much more reluctant to actually spend Bitcoins. Is it possible that this thinking and behavior is common among those who own Bitcoins and is it detrimental to the expansion of the Bitconomy? for a more in depth post look at http://wp.me/p2VF4G-r. Please forgive me for putting this on the wrong board.
Hoarding is limited due to "Time Preference", at times when bitcoins are overbought even the most bullish longterm speculators will find better shortterm returns elsewhere.
http://wiki.mises.org/wiki/Time_preference
Indeed... if my bitcoin holdings become too valuable I have a tendency to buy assets with them.
January 12, 2013, 01:55:37 AM
I have caught the Bitcoin Millionaire Syndrome. I think that some day my few Bitcoins may become worth anywhere from a small fortune to a large fortune. This means that I am much more reluctant to actually spend Bitcoins. Is it possible that this thinking and behavior is common among those who own Bitcoins and is it detrimental to the expansion of the Bitconomy? for a more in depth post look at http://wp.me/p2VF4G-r. Please forgive me for putting this on the wrong board.
Hoarding is limited due to "Time Preference", at times when bitcoins are overbought even the most bullish longterm speculators will find better shortterm returns elsewhere.
http://wiki.mises.org/wiki/Time_preference
January 12, 2013, 01:42:31 AM
Thank you Johnathan I found that post insightful but I still think that there are other ways to be involved in the Bitconomy besides just using Bitcoin to move money across distance and time i.e. saving. I want to be more involved in helping the Bitconomy grow either through education or entrepreneurship.
January 11, 2013, 11:54:20 PM
Is it possible that this thinking and behavior is [...] detrimental to the expansion of the Bitconomy?
If I have $100 USD at an exchange, I can buy about $100 worth of bitcoins.
Then the person I send those coins to can go to the same exchange and convert those bitcoins back to just about $100 USD. There will be some loss due to exchange fees, so maybe when all is said and done the person I sent the coins to gets only $99.
The point is that this process is identical whether you are sitting on your coins or not. This is also identical whether the BTC/USD exchange rate is $14 or $40.
Where the problem comes in with you sitting on coins is whether you will you continue to hold if there is a selloff underway, and thus make the selloff even worse.
So the problem comes down to it contributing to "hoarding" increases exchange rate risk. But it does not prevent others from using bitcoins as a currency for trade.
January 11, 2013, 11:26:47 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
BitPay charges way less than 6% to convert to USD.
Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.
Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.
It is 2.69% for USD payout or 0.99% for BTC payout https://bitpay.com/pricing.
Yep. I can confirm they only charge 2.69%.
Wouldn't it be .5 to .6% to sell on an exchange and then a flat bank wire fee or .25c dwolla xfer?
Sure, if you are willing to do business with MtGox. In my experience their lack of customer service and expediency make it worth the extra couple percent to use bitpay. With bitpay, the funds are in my bank account the next day. Also, even if MtGox was always timely with dwolla transfers, I would still have to wait 3 days to transfer from dwolla to my bank.
January 11, 2013, 11:21:37 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
BitPay charges way less than 6% to convert to USD.
Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.
Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.
It is 2.69% for USD payout or 0.99% for BTC payout https://bitpay.com/pricing.
Yep. I can confirm they only charge 2.69%.
Wouldn't it be .5 to .6% to sell on an exchange and then a flat bank wire fee or .25c dwolla xfer?
January 11, 2013, 10:44:06 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
BitPay charges way less than 6% to convert to USD.
Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.
Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.
It is 2.69% for USD payout or 0.99% for BTC payout https://bitpay.com/pricing.
Yep. I can confirm they only charge 2.69%.
January 11, 2013, 09:53:26 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
BitPay charges way less than 6% to convert to USD.
Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.
Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.
It is 2.69% for USD payout or 0.99% for BTC payout https://bitpay.com/pricing.
January 11, 2013, 09:20:10 PM
I posted a similar thread here as well, seems like everyone is thinking the same https://bitcointalksearch.org/topic/closed-135858
January 11, 2013, 08:44:15 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
BitPay charges way less than 6% to convert to USD.
Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.
Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.
January 11, 2013, 08:40:02 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
BitPay charges way less than 6% to convert to USD.
January 11, 2013, 08:10:06 PM
Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.
Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.
January 11, 2013, 07:40:42 PM
Let me know how hoarding works out for you. In my experience there are so many reasons to cash out or invest bitcoins in other projects that hoarding them starts to look like the slowest way to get rich. And if you're looking to get rich, there's no reason to take the slow lane.
Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before. Lot's of starving millionaires in Zimbabwe.
Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before. Lot's of starving millionaires in Zimbabwe.
My hoarding has quadrupled my investment so far, so it's working out for me. Comparing the Zimbabwe Dollar with the USD is apples and watermelons. Moreover the US dollar index has risen and fallen 2% in a year. It's not some avalanche of depreciation.
January 11, 2013, 07:08:05 PM
True so I'm going to rent rooms in my flat starting march with dicount if someone will decide to pay in BTC
Around the same time I'm going to be looking for somewhere new to rent and was considering requesting a landlord to take Bitcoin on Craigslist. I managed to persuade my current landlord to take one casascius 25BTC physical coin in part payment one month but he doesn't get it and will simply leave it in his safe for the foreseeable. Better than nothing but ... the whole of my rent monthly in bitcoin? - now that would be good.
Or maybe he does get it. It may even have something to do with the reason he managed to accumulate enough wealth to become a landlord in the first place.
January 11, 2013, 07:00:36 PM
True so I'm going to rent rooms in my flat starting march with dicount if someone will decide to pay in BTC
Around the same time I'm going to be looking for somewhere new to rent and was considering requesting a landlord to take Bitcoin on Craigslist. I managed to persuade my current landlord to take one casascius 25BTC physical coin in part payment one month but he doesn't get it and will simply leave it in his safe for the foreseeable. Better than nothing but ... the whole of my rent monthly in bitcoin? - now that would be good.
Or maybe he does get it. It may even have something to do with the reason he managed to accumulate enough wealth to become a landlord in the first place.
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