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You can buy a better computer by waiting. Does that stop you from buying computers?

Considering how easily people invest cryptocurrencies into quite risky ICOs, you can see that people don't have any problem spending, as long as it's something they consider valuable.

> You can buy a better computer by waiting. Does that stop you from buying computers?

On the margin, yes. It doesn't stop me from ever doing it, but it does mean I put off upgrading as long as possible.

In other words, you buy computers when you need to. Seems healthy.

It's bad for the velocity of the economy; holding a computer you're not using isn't great, but holding money you're not using is even worse, because by buying the computer you're sending out price signals earlier on that the rest of the economy can use to allocate resources appropriately. And deflation has a nasty tendency to form a self-reinforcing spiral (as does inflation to a slightly lesser extent, so the preferred approach is to have people actively adjusting interest rates etc. to keep a currency value reasonably stable but with a small rate of inflation).

The economy is not everything. It's better people use their money more rationally, rather than buying junk that they don't really need, which then falls apart and poisons our soils and oceans.

Plus it's quite clear to me that people are willing to spend their deflationary currency on the things that they believe in - the whole ICO market demonstrates it.

Not really - ICOs are just buying other, more deflationary cryptocurrencies.

I dont consider Bitcoins as computers, you're not paying for visas or food with computers because computers aren't vehicles of value and they're not really liquid, you can't just go i'm buying a house with many computers as you can with Bitcoin.

As well as waiting for it, I only pointed this out after reading the fb comments about an article: https://www.google.ca/url?sa=t&source=web&rct=j&url=https://... where they basically did not want to pay because of Bitcoin's worth, again this could be because that they were asking for 60 bitcoins.

I didn't say bitcoins are like computers. You misunderstood my comment.

To clarify, computer markets emulate the deflationary nature of something like bitcoin. Yet they sell just fine.

That's not really the question though, a better question would be "you need to buy a computer today, do you pay in bitcoin or fiat?"

If you believe that bitcoin is going to be successful then you should absolutely pay in fiat.

There's also a bigger question, I may need a computer today so I'll buy one instead of waiting. But what about the money that I don't need to spend, my retirement fund or something like that? With inflationary currency I have an incentive to invest that money, fueling the economy. With bitcoin I can just let the money sleep in my cold wallet and I know that it'll keep getting more and more valuable by virtue of being in ever more limited supply. The rich get richer and the poor can't get a loan.

Of course you might say that if the economy is unhealthy it'll cause a recession which will end up devaluing my bitcoins, but then you have a prisoner's dilemma: you want people to invest bitcoins into the economy but you sure as hell don't want to be the one doing it.

But remember kids, bitcoin is about killing the greedy banks and helping the poor farmers in Africa or something so fight the good fight and buy those coins.

It's amusing to me how the bitcoin community rejoices every time a business starts accepting bitcoin but at the same time the rallying cry is always "HOLD", as in do not ever spend your bitcoins because they're going to increase in value. There's an amusing dissonance here.

Well, the thing about bitcoin is that anyone can buy bitcoin. If you're poor, you can have coinbase buy $10 in bitcoin a week automatically. It's an investment of a quality that isn't really available in other forms, and accessible to poor people and middle class who are excluded from things like venture capital and other things by securities regulations.

HODL doesn't mean never sell nothing, it means don't try to trade in and out of bitcoin to time the market.

Nothing wrong with spending some bitcoin, that's not opposed to holding, just better to spend less bitcoin than you're earning from your salary each month.

Saving money is a luxury. That's where the huge inequality lies. Just google the issue to find tons of links, here's one at random: https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-...

>63% Of Americans Don't Have Enough Savings To Cover A $500 Emergency

Most people simply can't afford to invest a significant amount of money in bitcoin, especially with the high volatility we're having at the moment.

That's actually the point the parent was trying to make, except it backfires here. People won't stop buying food, clothes and paying rent to invest in bitcoin for later returns. They have to spend that money. Rich people on the other hand can do whatever they want.

If poor people want to become rich they'll probably need some initial investment, but bitcoin's deflation removes some of the incentives for rich people to invest money.

One way to solve this issue would be to tax bitcoins savings to force the rich to "spend" their money by paying taxes, but at the same time bitcoin makes it easier than ever to hide and launder your money and even if the state manages to track your account they can't cease it without having access to your private key. Forget the panama papers, forget the lux-leaks. All you need is a computer running the bitcoin client and you can move millions anonymously without any intermediary.

I don't understand the comment "especially with the high volatility we are seeing at the moment". Volatility doesn't change your ability to have coinbase buy $10 in bitcoin every week... in fact because of volatility you can dollar cost average that way. Even you could have them do $10 a day if you want to put in $300 a month. There are millions of people who can afford that... but they don't save, as you have pointed out.

The not saving part is a cultural and habitual issue. People were addicted to credit in the past 20 years and this is due to a lot of forces, mostly government driven that benefit a fiat currency system.

Bitcoin not being fiat is quite different and it will take decades for habits to change, this is true.

That said, my facebook is overrun with non-technical, random people who are buying Bitcoin and Ethereum.

I don't see how bitcoins very low inflation rate (which produces price appreciation as adoption increases) disincentives investment.... instead it's an incentive because you can see the change month to month.

Taxing bitcoin and making the rich spend their bitcoins makes no sense... there are bitcoin whales with 100 times as many bitcoin as I have... doesn't affect me. IT's not a disincentive in the least.

By the high volatility I meant that poor people can't invest money they can't afford to lose because it's too risky at the moment. You can't invest $500 to take them out two months for now because you don't know if they'll be worth $1000 or $50 by then.

>Taxing bitcoin and making the rich spend their bitcoins makes no sense... there are bitcoin whales with 100 times as many bitcoin as I have... doesn't affect me. IT's not a disincentive in the least.

That's the kind of short sightedness that worries me about the bitcoin ecosystem. It does affect you if you ever need a loan to buy a house or start a business because those "whales" which will be the new 1percenters won't have any incentive to lend you money. The rich gets richer, the poor remains where they are. We end up with all the problems and inequalities we have today, except worse.

We killed the banks and replaced them with other banks except these new banks are even more opaque and will be even more stingy about lending you money. And on top of that we waste an ungodly amount of energy securing the blockchain. How is that an improvement again?

Your response comes from a.... perspective on economics that makes no sense to me. It's irrelevant if others have more bitcoin... if I am getting a loan, I'm certainly going to get it in the US dollar which has already lost %99.99 of its value.... cause I can pay it back in even more worthless dollars down the road.

In fact, my car loan's interest rate is below the rate of real inflation--- glad I bought bitcoin instead of paying cash!

You can't provide any evidence that we waste any energy on securing the block chain, in fact, the market value of bitcoin makes mining profitable, proving you wrong.... further, you ignore the cost of fiat currencies which are several orders of magnitude higher, including in energy usage.

You can buy a better computer by waiting. Does that stop you from buying computers?

It does in practice, actually. But there is always some portion of the market that needs the better system now. That is much less true of Bitcoin, which is mostly held for speculation rather than as a currency. People who are forced to "spend" Bitcoin are people who want to realize their speculative gain and exchange it for dollars, which they then use as currency because it's still vastly more convenient than Bitcoin.

That's predictable though, given the deflationary nature of the currency. If bitcoin is successful then it'll keep increasing in value. That means that there's very little incentive to ever spend your bitcoins if you can avoid it.

I think you under-estimate just how far Bitcoin has come.

Many people have their only income in Bitcoin. I do.

I am forced to spend (or, at minimum, sell) Bitcoin because if I don't, I don't have any food or housing.

Bitcoin is a currency going thru the technology adoption cycle. This is a really new thing.

The technology adoption cycle-- what the internet and smart phones went thru-- is when increasingly large waves of population accept the new technology.

Bitcoin still has some UI issues and a steep learning curve, and as a new form of money has to overcome massive societal inertia as to "what money is".

That said, so long as it is going thru this process, it will operate more as a store of value and speculative investment than as a currency.

Bitcoins volatility has been declining over the years, as it gets closer, though it's a long way off.

So the currency use case is less dominant now and will be as it is distributed to wider and wider numbers of people.

One thing we have to overcome is the idea you deal in "bitcoins".... bitcoin is divisible to 1/100,000,000th of a coin-- a satoshi.

When people get in the habit and comfortable with owning partial bitcoins, it will go much wider.

There will only be 21 million bitcoins in existence, there are 11 million millionaires in the USA alone.

That means that even american millionaires will never be able to own 2 bitcoins.

recently? well folks look like this argument is going to be around forever. people were saying the same things in 2012.

bitcoin is functioning at the same standard of any existing currency, so no need to make a new higher standard for it. The M1 supply is a tiny fraction of the asset and used for buying things. The M2 and M3 supply is a larger stockpiled group which is also being used for investing in things inside of its own economy.

Thats not controversial.

I understand I am making a presumption here by saying this and can be proven wrong, but I cant find exact data on people spending a lot of Bitcoin on services that take in Bitcoin thus I am presuming that people dont want to pay but are buying and holding Bitcoin and thus operates with a different standard than your typical US dollar which could pose a problem and also kind of goes against the idea of a currency used by everyone and decentralized from any govt.

There's no way to definitely prove you wrong, and there's no way your presumption can be proven right.

Bitcoin volumes increase month over month, Bitcoin transactions onchain still increase month over month, or at least year over year so far, you can try to extrapolate days destroyed to see how much of the supply moves

But you will never know the purpose behind the transactions.

Payment processors releasing data wouldn't even give a picture of peer to peer purchases happening, and they aren't even releasing data.

People investing in mining cooperatives, mining hardware, and token sales for all manner of organizations, are all part of the picture. And this will be in the billions this year.