The economic impact of too many physical bitcoins

Lethn

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Quote

Are you saying that casascius coins are a poorly designed concept? Because if so, I would disagree. I think I may have mis-read your post though.

No, I think Casascius coins are brilliant, what I'm saying is that if there were any knockoffs or forgery attempts then they'd be that badly designed that most of us would spot them.

mhill12

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While mBTC is becoming somewhat standard for some applications, with the bitcoin at ~$120 there is no real need to move away from BTC just yet. It is easy to spend ~10 in most situations, and 0.1 BTC is not really an eyesore.

As to hoarding and physical BTC, anyone who uses a paper wallet is basically doing the same thing. I'll wait a few months and then decide whether I want to use my bitcoins online again then.

coinerd

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Quote from: amincd on May 13, 2013, 05:01:38 PM

Quote from: BitBank on May 12, 2013, 09:54:01 PM

Funny you mention this. I'm actually working on a large project to this effect. Details to come, but it uses a new unit of account for 0.001BTC, as you suggest.

Nice. We need vendors to use denominations of 0.001 BTC as the standard.

Quote from: Stephen Gornick on May 12, 2013, 11:19:36 PM

Stock split is not the correct term to use there.

I know, which is why I put quotation marks around it. It's similar to a stock split, and I can't think of a better term to describe it.

inflation

amincd

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Quote from: BitBank on May 12, 2013, 09:54:01 PM

Funny you mention this. I'm actually working on a large project to this effect. Details to come, but it uses a new unit of account for 0.001BTC, as you suggest.

Nice. We need vendors to use denominations of 0.001 BTC as the standard.

Quote from: Stephen Gornick on May 12, 2013, 11:19:36 PM

Stock split is not the correct term to use there.

I know, which is why I put quotation marks around it. It's similar to a stock split, and I can't think of a better term to describe it.

BitBank

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Quote from: Lethn on May 12, 2013, 11:51:58 PM

In order for the physical bitcoins to have value they'd have to have Bitcoins actually on them and if you look at the way people like Casascius have done it then the physical Bitcoins would only be worth as much as the physical metal they were made with. Nevermind all the security stuff behind Bitcoin and the physical coins, you'd have to peel off the hologram to take the Bitcoins so even if counterfeiters managed to make fakes it would be extremely difficult to pull off.

I'm pretty sure anything else would be a cheap copy and would get called out immediately.

Are you saying that casascius coins are a poorly designed concept? Because if so, I would disagree. I think I may have mis-read your post though.

Lethn

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In order for the physical bitcoins to have value they'd have to have Bitcoins actually on them and if you look at the way people like Casascius have done it then the physical Bitcoins would only be worth as much as the physical metal they were made with. Nevermind all the security stuff behind Bitcoin and the physical coins, you'd have to peel off the hologram to take the Bitcoins so even if counterfeiters managed to make fakes it would be extremely difficult to pull off.

I'm pretty sure anything else would be a cheap copy and would get called out immediately.

BitshireHashaway

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The only thing I think it will do is increase the price as people realize its value and attempt to store more.

Stephen Gornick

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Quote from: amincd on May 12, 2013, 08:38:21 PM

One way to alleviate this is by doing a 'stock split' and making mBTC the standard unit of account, or redefining 1 BTC to mean what we now consider 0.001 BTC, which would suddenly increase the number of 'coins' in each person's wallet by 1000X.

Stock split is not the correct term to use there.

BitBank

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Quote from: amincd on May 12, 2013, 08:38:21 PM

One way to alleviate this is by doing a 'stock split' and making mBTC the standard unit of account, or redefining 1 BTC to mean what we now consider 0.001 BTC, which would suddenly increase the number of 'coins' in each person's wallet by 1000X.

Funny you mention this. I'm actually working on a large project to this effect. Details to come, but it uses a new unit of account for 0.001BTC, as you suggest.

amincd

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It makes no difference. The bitcoin not locked up in physical coins will just see their value increasing, keeping the purchasing power of 'liquid' BTC holdings constant. Ultimately what matters is purchasing power of BTC, not the number of 'coins' in each individual's wallet.

Some people fail to distinguish coins from value, which leads them to believe that fewer coins is bad for bitcoin. One way to alleviate this is by doing a 'stock split' and making mBTC the standard unit of account, or redefining 1 BTC to mean what we now consider 0.001 BTC, which would suddenly increase the number of 'coins' in each person's wallet by 1000X.

1bettor.com

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depends, can go a lot of ways. The hoarders get a premium for their product. Why else would they hoard for? To make more money. Eventually, if a bitcoin was 500k each, most, if not all, would liquidate. Demand will push prices to skyrocket.

Or....

People use an alternate form of paying, litecoin, some other coin, and that becomes the new norm.

Think about Oil. What would we do if the oil companies wouldnt release oil? What good is oil? What makes the world go round? . Oil could be worth 5 dollars a barrel or 5000. Its worth what people are willing to pay you. Eventually though, if the shells and exxons of the world said nope, no more oil unless we get 100k a barrel, people would use horse and buggy or come up with an alternative way to travel or heat their home, etc.

Greed can really shoot oneself in the foot......Got to be careful

Rob768

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It should only help the value of each bitcoin, as supply is lowered, but demand continues to grow. Since Bitcoins can be divided into as small of piece as they need to be, this should not have an effect on the total volume in US Dollars.

BitBank

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I was wondering, preferably for those well versed in economics...

What is the potential impact on bitcoin value if a significant number of people are storing physical coins, for instance, if bitcoins become used more as a commodity than a medium of exchange?

Has anyone done an analysis of how "bitcoin days destroyed" impact potential value?

Topic: The economic impact of too many physical bitcoins (Read 2141 times)