Bitcoin Forum

As great as bitcoin;s are for store of value, they sometimes have to be used in order to create more economic output, which means spent….

Bitcoin was designed to be spent. If it wasn't, then the blockchain wouldn't be necessary at all.

Then you sell your gold for fiat, exchange that for Bitcoin and use that.

"Every road leads to Bitcoin" (ancient proverb).

At a certain point in time this would mean bitcoin collapse.

In a timeframe where mining reward is only fee from transactions, if there was such a case of only store of value, and no transactions, the mining would come to a halt
and it would tear the whole thing from the ground up.

Please note that a case like that is not going to happen, there will always be transactions and trading, but if major part of people use it as store of value, it would extremely increase its value i guess.

cheers

This

Although many people think the best use of bitcoin is to store it over the long term, if too many people do this and too few people actually spend their bitcoin then there will be no reason for people to buy it in the first place

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joecooin, your ancient proverb..., I like that.   :)

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But the answer is that you should not buy TOO MUCH gold.  Gold is likely to go way up in the coming years as the physical gold disappears from the all of the fraudulent "paper gold" (futures, leased gold, "unallocated gold" and even "allocated gold" and many other gold derivatives).

I like gold a lot, and recommend that everyone who can ought to have 5% or more (depending on circumstances) of their net wealth in physical gold.  And well defended.

The problem with having TOO MUCH gold is what is happening now with Venezuela.  They are probably going to lose much of their gold to B of A and UBS (I think BA's partner) in Venezuela's pawning ($1.5 bn for 1.4 mn oz Au).  Hard times forcing someone to sell might mean having to sell your gold at TOO LOW a price.

Therefore, buy gold, but keep plenty of CA$H around so that you do not have to sell it! *



* Give it away quietly to your children (or grandchildren)!

In my opinion, BTC should be no different than any other currency in that regard.

It is a currency after all.... you can use it to buy stuff and you can save a little for a rainy day. Bitcoin would have no value, if it was never used to barter for goods and services.

Yes... It has the potential for "store of value" but it should be used too. {In the future, when all Bitcoins are mined... albeit not in our time... The only income for miners will be the fees received from transactions.. and if all bitcoins are only used to store value, the whole blockchain will collapse}  :(

So we need to use it too... and hoard some to keep everything balanced.  ;D

With consensus from the network Bitcoin has the ability to become infinitely divisible. Its divisble by 100,000,000 right now. Bitcoin will never get to the point where there isn't enough in circulation because if the supply of Bitcoin were to decrease in this way, the price of Bitcoin would rise and the amounts that people trade with would become lower (Ex. I buy $200 in silver with .8 Bitcoin. Bitcoin becomes harder to get, two years later I use .08 btc to buy $200 in silver).

Spend, spend, spend!

Spend like Bernanke if you want cause the almighty BTC has controls in place to keep the spend from getting to Fed like craziness.

Mining wouldn't halt at all, there will always be an operation that can make a profit mining, it's all about scale.

It doesn't really work in this case. If you look through the periodic table, there is essentially nothing but Gold and Silver that is unreactive and plentiful enough to be stored to keep it's value.
Bitcoin is great but can't be guaranteed to keep it's value like Gold and Silver, it could legitimately be replaced by something better and antiquated in no time, reducing it's value to zero.

Bitcoin at this stage is a good investment, but it will live or die by being used for trading.  I try to use it whenever I get the chance, I encourage others to do the same.

If bitcoin were as volatile and liquid as gold, we wouldn't run into this problem. Bitcoin won't be able to keep its value until mass adoption happens and we see the true price of Bitcoin.

sounds reasonable

Essentially we need to encourage people to spend and spend so that it becomes a norm. Eventually one day when the mining reward is gone and the network will depend entirely on fees alone to survive, it will become a big problem, because people will continue with similar trend and hold it idling in the wallet.

But Bitcoin feels too much like gold. When you own some you value it too much to spend it on mundane shit, when you have fiat for that.

It does feel like gold, but it does not work like Gold.

Gold is meant to maintain its value. It usually can't fall more than 20 dollars a day and most can't afford buying even a gold coin! Keeping your money in gold for the long term insures your investment.

You can't really do that with Bitcoin. It's 6x cheaper to buy and the prices could change in a second. One moment it could be less than a hundred and then you see it go up to 500. It's mostly a pump and dump or some media fluff that makes it really move.

Many people consider gold and silver the alternate forms of currency if the world were to collapse and economies were to start failing. That's why a majority of people even buy it in the first place. If the world went back to how it was a few centuries ago that's what it would be like and the people who have the most gold and silver would control the world. JP Morgan is secretly buying billions of dollars worth of silver and hording it not only to have control over the market, but if this were to happen.

There is no such thing as 'true price' of bitcoin. I don't understand why people think that present bitcoin price is somewhat undervalued and we need to wait for 'real' price to pop up. True price of bitcoin it is just value of bitcoin here and now. Not some mythical $1000 bitcoin may or may not reach in the future.

You don't need to encourage them, the bitcoiners will find out that spending bitcoins is the best way to make their coins worth more thus strengthen the whole bitcoin ecosystem

https://bitcointalk.org/index.php?topic=987110.0

There are spenders, borrowers and savers in every economy.
We need all types to have  a robust economy. 
The spenders increase bitcoin acceptance; the savers provide a price floor.

And what are doing borrowers? What is their purpose in the economy? In a fiat economy they create new money (through banks lending to them) thereby shifting expenditure from the future into the present ("borrowed life"), but do we need borrowers in the Bitcoin economy?

Borrowers help stimulate demand. Do you think most people could afford to buy a house without borrowing?
Their role will continue to be the same even in a Bitcoin economy.
If early adopters wish to generate income on their holdings (i.e. earn interest), you need to have somebody willing to borrow and pay interest on the other side of the transaction.

But this is only temporarily, since they will have to pay the debt in the future, which would necessarily impact debtors' future consumption. It makes some sense (though still questionable) in an inflationary environment (when incomes are increasing in nominal terms with time), but what about deflationary environment, that of Bitcoin?

Of course it would. The blockchain is what it is: A ledger that shows stuff is all legit and not double spending happening. Even if people use it as store of value, blockchain gives security.