Hacker News Reader

Comment by hapnin | Hacker News Reader

It used to be called "savings".

But there's a huge difference. With old fashioned "savings", the money was in a bank, which in turn would use it to invest it elsewhere. In other words, the money would still circulate in the economy. On the other hand, these bitcoins that are hoarded in a bunker are extracted from the economy as long as they are there.

The implications are big: with the current trend of concentrating wealth to only a small fraction of the population, at least all that money is not 'gone'. Even though the rich probably don't pay much taxes over it, their banks will invest it in other companies. If this bitcoin hoarding ever becomes a trend, the consequences for the economy will be disastrous.

> On the other hand, these bitcoins that are hoarded in a bunker are extracted from the economy as long as they are there.

These bitcoins were bought with cash, which is now sitting in the sellers "savings" account. The dollars did not disappear in thin air.

Those dollars continue to circulate, contributing to a functional dollar economy. Those bitcoins don't, so we don't have a functional bitcoin economy.

At some point, after the last central bank and Buffet bought bitcoin reserves, it will stop appreciating in value. Then it can start to circulate.

But what bitcoin owner is going to be willing to sell up and lock in their losses? They'll keep HODLing to the end, with only the occasional sale (to someone else in the ever-shrinking circle of people who care about bitcoin) to meet immediate needs.

today's market cap for BTC is around 158 Billion$. so we're talking about something around 7% of the world supply, "locked in an underground bunker".

What's not clear to me: is this just the keys stored underground and clients have access? or is this "cold storage"?

I'd speculate that more than 7% of the world's gold is locked up in bunkers, where it can be accounted for and borrowed against.

Nobody is shocked to know that gold is stored in vaults. Nobody is shouting that the folks buying overpriced coins from stupid mints are going to decimate the world economy with their irresponsible hoarding.

We're all just totally comfortable that, yeah... in a situation where a-bombs start dropping, gold would probably be a functional store of value.

Nobody is shocked because at least gold has a historical value and won't dissappear. When the a-bombs start dropping, nobody is going to want a piece of steel with an engraved bitcoin wallet key

> When the a-bombs start dropping, nobody is going to want a piece of steel with an engraved bitcoin wallet key

But they'll want a bunch of a heavy yellow metal? At least the small piece of steel is easier to carry around.

Savings accounts were replaced by checking accounts after the great depression. They still called them savings accounts, but people had no idea that 'savings' meant people did not have instant + reliable access to it.

So now we have 0.01% interest 'savings' accounts! They are just as liquid as our checking accounts.

Do people still use savings accounts on any significant amount of money? I'll admit I live in a bubble and don't know how most Americans store wealth

Reply on news.ycombinator.com