Topic: What is the deal with hoarding? - page 3. (Read 5016 times)

No, because if they hoard it then their mining costs are the new inflow of capital.

So...it would be better for the Bitcoin economy if miners hoard their coins...in order to avoid this requirement for an inflow of capital. Correct?

That's still an inflow of capital (labor/services), and it would have to be an inflow sufficiently high enough to maintain current market value.

Or being used as currency. Spent on bitcoin purchases for goods or services.

Well they're not flowing at all if they're being hoarded by miners. And if they're being sold it's immaterial what exchange they're sold on, it will still require $X/coin to maintain the current market value or the value will adjust downward due to inflation. Point is -- to maintain current market value with an inflation rate in existence, new money must flow in at around 3600 coins/day @ current market value. Somewhere in the bitcoin economy, this must happen. Whether from new adopters or miners.

Newly mined bitcoins.

Nice, thanks.

@Hmm, I am only able to see down to 167 on there, is there a setting to widen the chart?

The + - upper right above the chart

@Correct, and because it does not flow through MtGox, the price is not affected.

What's not flowing through MtGox?

Correct, and because it does not flow through MtGox, the price is not affected.

Hmm, I am only able to see down to 167 on there, is there a setting to widen the chart?

If they don't sell it, they're investing in it (at cost), so it's still the same amount entering the market just via electrical expenditure instead of direct USD. Might not be exactly because there is a profit margin, but it's still new money. Just they are the new money.

I am not sure of the exact price as I cannot view all of the charts at work but I would guestimate that selling 3600 BTC right now on MtGox would bring the price down near $100/BTC.

Has there been any indication on MtGox that all miners are selling 3600 bitcoins per day?

Or are miners different from other users that would somehow imply that they are not like the rest of the Bitcoin community where only .6% trade on a daily basis.

If the exchange price doubles every month, and you spend half of the coin each month, then your consumption power will always stay the same, isn't that amazing ?

You claim that because X bitcoins are created, Y dollars need to be invested for those X bitcoins to stay in the system.

I am asking if 3000X bitcoins require 3000Y dollars to be invested for those 3000X bitcoins to stay in the system.


X being 3600 and Y being $.5 million.

3000X being ~11 million and 3000Y being $2 billion

Because I can spend it anywhere I want to, and chances are better it'll retain value over the long haul than BTC which is 4 years old and can be traumatized with the swipe of a pen from an overzealous legislature.

Regarding your debate with mestar. I think his point is, if someone sold 3600 BTC right now on MtGox, what would be the next highest bid after those 3600 coins were liquidated?

The point is...why do you still have fiat?

How is that the same,  I simply don't see your logic here.

Saying that somebody sells $0.5 million per day means that if nobody is willing to buy that amount at that price, the price will go down.  

At no point does the total "market cap" enter the picture.

I think the point is I can quicker meet my needs paying with fiat than spending a BTC that will be worth 20% more tomorrow. I guess for some reason you're assuming it's necessity to spend BTC?

WHY ON EARTH DO PEOPLE KEEP SAYING THAT NOBODY IS SPENDING BITCOINS?

It just keeps popping up... and I can't for the life of me figure out how we come to this conclusion.
Bitpay is getting a RECORD number of new merchants, and their sales figures are increasing at a record rate, so it's not just merchants signing up for an unused service... it doesn't even matter whether or not the merchant cashes out to USD; people are SPENDING BITCOINS. Sure, it sucks when you buy something with bitcoins when they're $24 and then at $150 you think of how much more money you could have... but what are you going to do, throw every single cent of FIAT at MT. GOX and live in a cardboard box on a hunger strike until bitcoin hits $1,000,000? DUDE, THAT'S SO TOTALLY NOT HOW IT WORKS. (Is anybody doing that? PLEASE tell me if you're doing that, so I can laugh at you, for being the one idiot that doesn't spend during deflationary opportunity)

Your theory is whack because it is based in a Paul Krugman wet dream fantasy world where people don't spend deflationary currencies since they will be worth more in the future. People are human, they have needs that must be fulfilled in the PRESENT MOMENT. When the need for something in the present moment surpasses any potential future benefit of putting off that need, the person will seek to meet the need in the present. Sure, I'll give you this: The faster the currency deflates, the saving:consumption ratio increases. But we're not at a point where nobody's spending bitcoins, because if that were the case, NOBODY WOULD BE SPENDING BITCOINS. By the way, the charts above say this a little better than my violent stream of arrogant language so I apologize. The problem you describe - we simply don't have this problem right now. When bitcoin starts going up 1000% a day then maybe people will start throwing every cent of fiat into bitcoin and living in cardboard boxes - then I'll concede to your superior logic :-P

People are spending bitcoins. So, Q.E.D. wipe Krugman's inflationary emission off your face and buy something with your bitcoins. 

The problem with hoarding is not as much the hoarding as the lack of spending. The value of bitcoin is ultimately determined by its utility. Its primary, if not only, utility is as a medium of exchange. If most people buy bitcoins to hoard them and not spend to them, then the price rises but the utility stays the same. This situation will ultimate lead to a crash, which could kill bitcoin's future. That is the problem with hoarding.

Take a look at the charts below. Though the indications are not completely clear, it appears to me that hoarding is not pervasive and not likely to cause a crash. People appear to be selling off their hoarded bitcoins and there is still plenty of demand.

The first chart shows that the number of transactions vs. the number of exchange trades is falling. This can be interpreted as saying that more people are hoarding than spending. That's bad news.



However, the second chart shows the amount of transactions in USD has increased tremendously, almost as much as the price. This indicates that hoarding is not as prevalent as some people think. That's good news.



Finally, the last chart is complicated to explain. In simple terms, if you compare the graph to a graph of the total number of bitcoins, it indicates the level of hoarding. A high value compared to the total number of bitcoins indicates more spending and less hoarding. This chart shows that the percentage of hoarded coins is dropping, and very quickly in the last few weeks. That is great news.