Yep, this is what excites me too.
If someone somewhere invents this BitCurrency in a way that intrinsically tracks a reliable independent measure of demand, so it auto-deflates or inflates as required, we will have a stable currency that cannot be centrally manipulated.
If this happens I'd get as much base commodity (BTC) as I could

Maybe I should refine.
While commerce can exist in a world of imposed deflation (we have to buy food at least right), a payment mechanism that is deflationary cannot compete where an inflationary one exists**.
So unless BTC creates a market where only it can operate, it has to operate in markets where inflationary fiat exists.
Unless as I say, a BitCurrency can be used for trading that uses BTC as it's base.
What would be really cool is if this BitCurrency can be hardwired to inflate in line with a reliable measure of demand. This would keep the value of this currency stable.
BTC however will grow in value, but it wont matter anymore because people would use BitCurrency rather than fiat.

**The evidence for this is logical as I mentioned at the beginning. People would save BTC and spend using something else**

The consensus here has been that commerce needs an "inflatacoin". So if you think consumer spending can exist without it you are dreaming.

Toknormal, however makes a very good point in that we shouldnt be comparing BTC with fiat, but instead with gold as a base commodity. So while BTC will always be deflationary, a BitCurrency could be put into circulation that uses BTC as it's base. But this Bitcurrency mustn't deflate with demand, which means there must be a flexible mechanism for inflation that allows the BitCurrency to remain decentralised.

Maybe his intentions are good, but don't you think if Satoshi came out and said "yes I have a lot of BTC, but I am committed to spending them, not for disposal, but for day to day purchases and in new innovative niche markets" then everyone would have a lot more confidence the growth of users long-term bottom up.
It would be akin to the majority stakeholder CEO endorsing his company rather than hiding in the shadows. that would be a company worth the majority considering investing in.

Bottom up is certainly right. It will never happen top down because commerce wont support it without a market to tap into.
The only way that market will be created is if people spend their BTC rather than save it.
So when you say 'Bitcoin as saving account during transition to a full Bitcoin world', the only way that transition will happen is if you dont just use it as a speculative savings account.

If you spend it, they will come.
Problem is, when playing in the same market as fiat, it's detrimental to spend our BTC.

Stan I like the link, innovation into new markets rather than competing with current ones is the only way BTC can thrive.


P.S. One last point that worries me. If I was BTC's creator and had a huge proportion of supply. I would want to encourage the adoption of my new technology by spending my BTC. Instead Mr Creator remains anonymous.
Is it to hide what he's really doing? That being maybe sitting on his BTC while hoping it gains traction through the support of others.
If Mr Creator came out and confirmed that he is not spending his BTC, then we'd all lose confidence very quickly and BTC would die.

Agree you're English isn't bad at all. We British are often the worst
I completely agree that spending beyond your means is a bad thing, and I for one never do so.
But unfortunately if we spend less with BTC (however sensibly) in favour of saving for future gains, the Amazons of this world will never switch from the fiat that we spend so freely.

As Stan says, maybe the only way that BTC can really compete with fiat in terms of consumer usage, is if there are products that can only be purchased in BTC, and then BTC can operate in a niche market.
The thing is, someone sooner or later would tap into that market with fiat and we will then inevitably stop using BTC.

The sad truth is that fiat currencies are more adaptable to market conditions so will always win. Survival of the fittest innit.

Exactly, if I see that by not transacting today I will have more value in my pocket tomorrow then I'd be stupid to transact.
In fact I'd never transact unless I had to or I really really wanted to buy something.
When that happens I'd think "if only there was another way to get that thing I really want without me having to spend my increasingly valuable BTC...oh wait there's those £'s I have knocking around that are not doing anything for me. Happy days! I can keep my cake and eat my newly purchased cake"

Irrefutable I'm afraid.

And this reinforces my point. Currently in the world of fiat we see the folly of saving, so we are taking on cheap debt to enable us to spend more (or some of us look for inflation beating investment opportunities). Business loves this and encourages it because we will buy more of whatever they are trying to sell.
Bitcoin needs big business to adopt and encourage BTC, and while many argue that low transaction costs provide enough incentive, what they really need is volume of spenders.
But BTC's increasing demand:supply will encourage us to save not spend, so companies won't be able to sell their products to us in BTC when people have the option of using £.
Then companies will drop BTC and pop!

Consumer driven spending economies are based around the fact that deflationary currency is a bad thing because it deters spending (slightly).
If Bitcoin is to succeed it needs to become a Consumer driven spending economy. But Bitcoin is destined to be deflationary, and that coupled with the other option of spending inflationary fiat instead, will mean that sensible people will never spend BTC.

So in my example do you really think most people will do A rather than B?? because if BTC is to succeed this is what needs to happen.

In your analogy, those who spend spend spend in a growing economy are the sheep that represent the 99% that push every economy to a bubble. Those who invest fare better until the bubble bursts and debt is made cheap to save the sheep from oblivion.
This is how capitalism works, it is fuelled by consumer debt and designed to suck money from sheep debt while never allowing the sheep to die.

If you spend your BTC amidst rapid price appreciation, and spent less as it falls, you will always lose money in relative terms.

But I am inclined to invest in the next bubble because I'm willing to bet that most people won't realise this and spend BTC regardless.
That and my ££ is going nowhere at the moment so I may as well take a punt on humanities stupidity.

Completely agree with Greenstox. In fact I has just joined to post the same realisation.

I want Bitcoin to succeed, I want to invest in it, but it is inherently economically flawed as a large scale currency replacement.

While I see the potential for Bitcoin to reach even $1,000,000 in value looking at market share projections. It is wishful thinking over reality because those projections can never come to pass.

Bitcoin is designed to appreciate. Yes sure there's is inflation currently in place through mining control, but everyone knows there is a limit to supply. So everyone knows that as demand increases through adoption, then the price will always increase.

That's when reality hits, in that people wont spend a rapidly appreciating asset which will be a massive barrier to capturing market share.
Lets be honest, say you want to buy a TV, you could A) spend $400 worth of your Bitcoin even though it may be worth $1000 the following year.
Or B) you could spend $400 from your dollar account knowing that due to controlled inflation it would be worth say $395 the following year in real terms.
So anyone sensible would do B and hold onto their BTC, and this is the reason I cannot see it taking off no matter how much we want it to.


Bitcoin will just destined to be a series of bubbles until all confidence is lost.


P.S I would love to be wrong