The problem with bitcoin

[Burning_Rider]

The only reason I see why bitcoin will not work as the ultimate currency used by all is simple:
When all the bitcoins are minded there is no possible to way to get any more, nobody will want to spend anything because it will ultimately be the most valuable thing, and besides how the hell do you handle a deficit or surplus when everything is being done in the same currency and nobody can make more of it.
Ultimately we come back to the gold standard that had the same exact problems and blew up. The only thing i can envision for bitcoin in the future is to make online trading more efficient, but seriously there would have to be an unlimited number of bitcoins to solve the golden standard problem.

Your thoughts, let the flames begin!

[bitcon]

so if i have a bunch of bitcoins but i want a bigmac because i am hungry, i will rather starve than spend a bitcoin because its so valuable? altcoins will still be being mined also.

[sonofliberty]

Deflation. Here we go again.

[MicroGuy]

The only reason I see why bitcoin will not work as the ultimate currency used by all is simple:
When all the bitcoins are minded there is no possible to way to get any more, nobody will want to spend anything because it will ultimately be the most valuable thing, and besides how the hell do you handle a deficit or surplus when everything is being done in the same currency and nobody can make more of it.
Ultimately we come back to the gold standard that had the same exact problems and blew up. The only thing i can envision for bitcoin in the future is to make online trading more efficient, but seriously there would have to be an unlimited number of bitcoins to solve the golden standard problem.

Your thoughts, let the flames begin!

There's something you seem to have missed in regards to the way the digital currency revolution is unfolding. Bitcoin is only the very very beginning.

Once people realize there's more than one make and model of automobile capital will begin flowing into the other automakers. Bitcoin POS hardware will be updated to accept multiple coins and consumer demand will catapult the most competitive altcoins into the stratosphere.

[justusranvier]

Can we get a bot that automatically detects these posts and sends people to the Wiki or something to explain why deflation isn't the end of the world?

[fattypig]

Deflation. Here we go again.

Right, now we are going again.. Why is it Deflation??

[Impaler]

If you add a bot, have it direct people towards Freicoin, the only coin developed and lead by people who take the deflation problem seriously.  By the inclusion of a 5% per annum carrying cost (aka Demurrage) charge on all coins the incentive to hoard coins till the end of time is reduced and with it much of the irrational speculative frenzy which drives BTC prices ever upwards.

[Walter Rothbard]

Ultimately we come back to the gold standard that had the same exact problems and blew up.

If this is what you think, then Bitcoin is not for you.  Bitcoin is for people who disagree with what you said in that sentence.

If you'd like to explore further, a couple great reading suggestions:
Whatever Happened to Penny Candy? by Richard Maybury
What Has Government Done to our Money? by Murray Rothbard

But basically, if you believe the gold standard suffered from these problems you have described and failed as a result, don't use Bitcoin!

You might consider starting an alternate coin that doesn't have a reward drop, or sticking with a more traditional currency system.

[Walter Rothbard]

Can we get a bot that automatically detects these posts and sends people to the Wiki or something to explain why deflation isn't the end of the world?

Usually I respond to the deflation problem with a link to the FAQ in the wiki.

In this case since he mentioned "problems" with gold, I figured it was a good opportunity to share with him (and any lurkers) that not everyone agrees with these "problems" with gold.

[Walter Rothbard]

How did this thread make it out of the newbie section when the OP has only 3 posts?  I ignore the newbie section so that I don't have to read FAQs like this (as often).

[Carlton Banks]

That's right, everyone will starve themselves to death and forego every new opportunity that would require them to spend coins in order to take said opportunity. So that they can have "more money". Great analysis.

[notthematrix]

What you see is not the deflation!
Its the mirror that is fooling you , you see the inflation of the dollar real time!
The reason why people move dollar to btc is the fact that you loose mony if you dont spend,,,
and thats a good thing,,, who unaccacary spending is a bad thing?
Watch this clip ... http://www.youtube.com/watch?v=AfzQzGNYaiU inflation destry's the planet!
its that simple.

[Mondy]

so if i have a bunch of bitcoins but i want a bigmac because i am hungry, i will rather starve than spend a bitcoin because its so valuable? altcoins will still be being mined also.

youve got an awesome name!!

[Walter Rothbard]

What you see is not the deflation!

That is a very good point - the reason Bitcoin's value is going up so fast and is so unstable is not because it is "deflationary" (finite supply).  I think a lot of people miss this.  (In fact frequently I fall into thinking this and have to correct myself.)

However, I disagree that it is going up so fast purely because of inflation of fiat, either.  Fiat is inflating, but it is not inflating that fast!

No, what is happening here is a process of price discovery.  Bitcoin is radically new - as the market expands, this price discovery is going to continue for quite some time.

[MicroGuy]

The only reason I see why bitcoin will not work as the ultimate currency used by all is simple:
When all the bitcoins are minded there is no possible to way to get any more, nobody will want to spend anything because it will ultimately be the most valuable thing, and besides how the hell do you handle a deficit or surplus when everything is being done in the same currency and nobody can make more of it.
Ultimately we come back to the gold standard that had the same exact problems and blew up. The only thing i can envision for bitcoin in the future is to make online trading more efficient, but seriously there would have to be an unlimited number of bitcoins to solve the golden standard problem.

Your thoughts, let the flames begin!

Don't worry so much. Altcoins will save the day!  

[beetcoin]

OP has a point.. BTC being a deflationary asset means people will hoard it, and it cannot become a true currency.

i often hear people claiming it's a currency, but it's just not. it's quasi currency, quasi store of value. it's a problem, but it doesn't mean BTC will never rise or be valuable.

[greenlion]

Monetary deflation is only viewed as negative in the milleu of conventional macroeconomics because for the kinds of currencies that they are looking at, deflation is an indicator for impending economy-wide demand collapse.

Deflation in this context without those conditions is a completely different phenomenon, because prices reach an equilibrium where time preferences are incorporated.

[freedomno1]

Can we get a bot that automatically detects these posts and sends people to the Wiki or something to explain why deflation isn't the end of the world?

Just put a sticky thread to the bitcoin wiki 101
And back to newbie hell with 3 activity

[greenlion]

The only possible problem I anticipate with Bitcoin achieving its full potential, is that a large number of socially-inept internet morons stand to become obscenely rich and do terrible idiotic things with large sums of money.