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Comment by mcguire | Hacker News Reader

Which results in long-term depreciation, such that spending bitcoin is economically irrational.

It is not so, because humans have finite life span. So they MUST spend their coins within a fixed time frame of about 70 years.

> So they MUST spend their coins within a fixed time frame of about 70 years.

Inheritance. Donations.

No one passes everything to heirs

No, but anything you didn’t spend while you were alive goes to your heirs (or the state if you don’t have any, or other rules).

So, you do not have to spend everything while alive.

Lots of Bitcoin simply get lost and people are betting on this loss too. You are also forgetting the ultimate irony behind long term deflation. At some point your Bitcoin will be worth millions in dollars but will the dollar actually buy you that much product or service if there aren't enough young people to take care of everything?

The endgame is that there will be no dollars and Bitcoins will cover all exchange and savings needs. At that point deflation stops.

"At that point deflation stops."

Not unless all economic growth stops, too. More people in the world + fixed number of bitcoins = deflation. More cars/computers/thingys made + fixed number of bitcoins = deflation.

Sure it is.

As more goods get made relative to bitcoin, and more people come to exist, the prices of goods & services must come down relative to bitcoin in order to avoid liquidity crises - especially since the number of bitcoin is set to be capped (while population and goods aren't). Bitcoin instead was designed to handle this problem via trading in fractions such as satoshi's.

The "it" in the phrase "it is not so" relates to the phrase "spending bitcoin is economically irrational". It is economically rational to spend bitcoins because a person wants to enjoy some of her wealth before she dies. That is the only reason I have sold part of coins I mined in 2011.

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