Topic: what is killing bitcoin by drastically deflating it? (Read 3397 times)

Many bitcoin holders may feel like its a good thing that bitcoin -> $ value doubled within past few weeks,
but thats terrible news for people who sell stuff and would like to accept bitcoin...

We arent talking about money in general. You can buy stuff online with creditcard, bankwire, paypal, etc... and decentralized, anonymous currency - bitcoin (good idea only as long as its stable and reliable payment option).
Obvious trend is: many who have bitcoins that become a lot more valuable with each passing week (compared to real money like $, EUR, whatever), do see it as an investment and are more and more reactant to buy stuff with bitcoin.

Oh no.  We haven't lost money and our fees have actually gone down.  I must be doing something wrong.

...
I for one am unclear why that's a distortion of your argument.  People don't stop needing things just because holding on to money longer can mean you'll get more value for it tomorrow.

Although a rapidly rising commodity brings smiles to all faces who are holding it, it also discourages people holding it for exchanging it for goods, services, and indeed Fiat currency. Now, this is when things are on the way up. On the way down, the volatility will destroy people using Bitcoin for real world economic transactions. Either way, the volatility cannibalises that which underpins the basis of the whole 'value' of Bitcoins.

Seems like there are a lot of smug types around here who think the whole Bitcoin universe's behaviour is running in accordance with their own personal simple world paradigm of how things should work. My word of warning to such people is that they should perhaps consider the possibility that perhaps they are not as smart as they think, and that perhaps they have merely got lucky, inadvertently hitching a ride on a dragons tail wings. True, that dragon may soar and spiral ever higher into the heavens, taking everyone with it along for the ride. But when that dragon dives, it will nose down right into the flames below, revealing to everyone, their false illusions regarding what is driving Bitcoins.

Do people forget what happens when market value far exceeds the underlying assets supporting it? Housing crash 2008 anyone? One thing that I could safely bet my own house on, would be that the market value of Bitcoins, is exceeding the underlying economy which supports it, by an order of several magnitude at the moment. For anyone to 'invest' in Bitcoin now for purposes of speculation, they would be doing so on the premises of 'greater fool theory' (a bigger fool than themselves will come along and pay even more than they did at some point in the future). As for the posts I have seen where people are discussing putting their pension funds into Bitcoin...OYF! 

Keep your menu price in local currency, use a local currency quote at time of checkout. It's not rocket science.

I think one of the problems with bitcoin to be implemented to buy and sell in commerces is this volatility, because the average seller doesn't want to be adapting its prices every 3 hours since their prices need to be sharp to compete.

It's a newborn for starters, and because there's a fixed supply and a forever increasing pool of adopters, the value is set to rise until everyone knows what Bitcoin is and has decided they want it or don't want it.

But bitcoin <-> real money exchanges usually make small (traditionally - ~2%-5%) profit per exchange.
With such deflation (~3-6% per day) exchangers actually lose by selling bitcoin, so fees should go up...

Why did you quote mine and then strawman my position?

Yeah, and electronics manufacturers are going broke because everybody waits until the prices drop before buying. Sorry, your argument isn't supported by the facts.

WHY? The most obvious aspect: More and more people become hesitant to make purchase today and decide to wait few days to get it cheaper - bad for merchants (10-30% of potential sales are lost).

I just got this real crazy idea.

What if Bitcoin encourages people to stop spending more than they need to buy?  Since by holding BTC you're likely to become wealthier, thereby decreasing the need to spend frivolously, people would hold onto their coins and spend them only when they had to, such as for food, shelter, and the recurring payments of entertainment--and everything else would be only if they really mean to spend, as on their business ventures or schooling or whatever else.  On the other hand, with fiat, you're encouraged to get rid of it ASAP on whatever it is you need or want.  Capitalism seems to favor an inflating currency, as people are more likely to get rid of their cash by either buying or investing in something else (but average Joe seems to prefer to buy.)  Therefor, more money runs around, the economy (is supposed to) keep moving, la-de-da.

I think a society that's more focused on conserving their cash (and thus, their resources) is much better off than the society that must eternally spend and expand.  Maybe people won't waste their hard-earned money so quickly then, and won't be so easy to coerce into giving a bank for gambling purposes--I mean, investing.  This system seemed to work well when we needed to spend and expand, but now that phase is over, and the cup keeps spilling over.