78% of Bitcoin users are smarter than the rest of the world

[BTCGameMaker]

OK so that headline isn't exactly accurate.  I read an article about Bitcoin Friday where the founder or organizer or whatever said that 78% of Bitcoins weren't being used and something had to be done about it.  Hence Bitcoin Friday.  I'm glad at least that the "something being done about it" was encouraging people to act of their own free accord to spend Bitcoins as opposed to suggesting we rewrite the code to create a use'm or loose'm type system.

But here's my point.  Isn't savings a good thing?  I understand why it's bad for the group.  It's better for the spread of Bitcoins if more people spend them because it encourages businesses to accept them etc.  If you like to use the GDP as a measure for the quality of a country, then again spending and consumption are good things.

But on an individual level isn't savings better.  It allows you to provide for yourself if something happens to you.  It allows you to retire when you want to.  It allows you to make decisions based not on what they cost, but on what's best for you.

This is one of the great benefits of Bitcoin.  Bitcoins tend to increase in value over time compared to U.S. dollars which depreciate over time because of inflationary production of money.  This means there is added incentive to save Bitcoins for the future, because holding them is not risky and they will be worth more later.

The one potential downside of this is that it reduces incentive to invest in growth.  If your Bitcoins will increase in value just from holding them, then the return from an investment has to be that much higher to make the risk worth it.  But that may be an old world way of looking at investments.  People on Kickstarter and Kiva and sites like that choose to invest in things they want to see created, not in things that give them a financial return.  Maybe that's the way investment should work.

Back to my original point, it seems to me that the nature of Bitcoins encourages people to make better life decisions for themselves.  It encourages people to save instead of consume.  I'm not saying don't spend Bitcoins.  Let's get this economy booming.  But we should also celebrate, not being frustrated by, the fact that Bitcoins don't encourage us to act against our own self interest the way other currencies do.

Just a thought.

[FreeMoney]

I should just save and copy paste my reply to this topic.

That stat is meaningless. Most people use the services that most people use. These services often send out coins that were recently received. That means that even if everyone uses all of their coins every week many coins can remain completely still. It has more to do with a somewhat arbitrary coin management decision of a few of the bigger bitcoin companies.

I manage X bitcoins for many other people, even though we do something close to X withdrawals every week 78% of X coins have not moved in a very long time.

[evoorhees]

But here's my point.  Isn't savings a good thing? 

Yes, it's a very good thing. Anyone who calls it "hoarding" doesn't understand this, though.

[MoonShadow]

OK so that headline isn't exactly accurate.  I read an article about Bitcoin Friday where the founder or organizer or whatever said that 78% of Bitcoins weren't being used and something had to be done about it.  Hence Bitcoin Friday.  I'm glad at least that the "something being done about it" was encouraging people to act of their own free accord to spend Bitcoins as opposed to suggesting we rewrite the code to create a use'm or loose'm type system.

But here's my point.  Isn't savings a good thing?

Yes.

  I understand why it's bad for the group. 

It's not bad for the group, either.

[FreeMoney]

But here's my point.  Isn't savings a good thing? 

Yes, it's a very good thing. Anyone who calls it "hoarding" doesn't understand this, though.

Yes.

And also, ever coin is always being saved or 'hoarded' at all times.

It is a really bad article and a dumb statistic.

[Spaceman_Spiff]

The one potential downside of this is that it reduces incentive to invest in growth.  If your Bitcoins will increase in value just from holding them, then the return from an investment has to be that much higher to make the risk worth it.  But that may be an old world way of looking at investments.  People on Kickstarter and Kiva and sites like that choose to invest in things they want to see created, not in things that give them a financial return.  Maybe that's the way investment should work.

While I don't believe inflation is needed and good, nor that more consumption is usually a good thing, I do see reduced investment as a probable economic outcome (probably less bubbles too though, except for the big bitcoin bubble that is bound to happen if the systems manages to survive all hurdles :-), still orders of magnitude away though).  The degree to which this will have a negative impact on the economy will depend on the rate of deflation (since investments need to produce at least that percentage of profit, and then some).
I don't agree with the idea that people will suddenly look at investments in a different light, maybe some idealists will, but this will never be more than a minority.  I don't see why there would be more of these types of lending than is currently being done.  The majority of lending practices will still be about making money.

Back to my original point, it seems to me that the nature of Bitcoins encourages people to make better life decisions for themselves.  It encourages people to save instead of consume.  I'm not saying don't spend Bitcoins.  Let's get this economy booming.  But we should also celebrate, not being frustrated by, the fact that Bitcoins don't encourage us to act against our own self interest the way other currencies do.

Couldnt agree with you more.

[BTCGameMaker]

I don't agree with the idea that people will suddenly look at investments in a different light, maybe some idealists will, but this will never be more than a minority.  I don't see why there would be more of these types of lending than is currently being done.  The majority of lending practices will still be about making money.

I agree with you within existing society.  But I also just saw http://www.kickstarter.com/projects/680276743/learn-game-programming-codeschoolorg?ref=category over at Kickstarter.  I couldn't fathom why he would get over 5 times his stated goal, especially since you figure once the tutorials are up you get access to them either way.

My only explanation is there is a trend towards investing in the commons, and this trend is self perpetuating.  The more people invest in the commons, the more commons people can take advantage of, the more people want the commons to grow, the more people invest in the commons.  I am in no way suggesting that existing forms of investing will disappear.  I'm only suggesting that as a mechanism for growth and development we may see a day in the future when popular support and crowd funding becomes an equal if not greater driver of growth then traditional investors.

[Coinabul]

The point of Bitcoin Friday was to support Bitcoin merchants. That's all.

[Fjordbit]

Another problem with the stat is that it's unknown how many bitcoins are just lost from the early years when they weren't worth tracking.

[Spaceman_Spiff]

The point of Bitcoin Friday was to support Bitcoin merchants. That's all.

And it was a good initiative 

[bitboyben]

I'm looking forward to more initiatives like this. Maybe we need active bitcoin evangelism with a different focus each month. How can we as a community increase demand for btc services?

Also I don't like the word "Hoarding" with regards to bitcoin. It has a negative connotation we need a new term. imo 

Saving? Storing? Stashing? Banking? 

[BTCGameMaker]

The point of Bitcoin Friday was to support Bitcoin merchants. That's all.

And it was a good initiative 

Second that.  As I said...

Let's get this economy booming. 

[Lethn]

OK so that headline isn't exactly accurate.

No shit, if Bitcoin users were so intelligent then why do I keep reading complaints about getting scammed?

Also, don't try and influence the way free market economics works, all the other currencies are doing that and look what's happening to them, just leave it alone and the market will grow.

[squall1066]

Woo Hooo, I'm one of the 23%

[tgmarks]

I feel like some user on this thread are missing a key point.  If everyone just saved their bitcoins they wouldn't be worth anything!  They would be useless as there would be no trading on the exchanges, no reason for businesses to accept them and just no point.  Yes, its good to save, and yes, it's generally a great thing for the individual, but unless a certain portion of bitcoins are circulated to some extent, they will not grow in value or maintain their current value.  They have to at least support a basic structure around them.

[Spaceman_Spiff]

I feel like some user on this thread are missing a key point.  If everyone just saved their bitcoins they wouldn't be worth anything!  They would be useless as there would be no trading on the exchanges, no reason for businesses to accept them and just no point.  Yes, its good to save, and yes, it's generally a great thing for the individual, but unless a certain portion of bitcoins are circulated to some extent, they will not grow in value or maintain their current value.  They have to at least support a basic structure around them.

I agree that bitcoin would be worthless without the ability to trade them for something else, but technically, if there were no sellers, then bitcoins could maintain their value without any trade in them...

[ElectricMucus]

I feel like some user on this thread are missing a key point.  If everyone just saved their bitcoins they wouldn't be worth anything!  They would be useless as there would be no trading on the exchanges, no reason for businesses to accept them and just no point.  Yes, its good to save, and yes, it's generally a great thing for the individual, but unless a certain portion of bitcoins are circulated to some extent, they will not grow in value or maintain their current value.  They have to at least support a basic structure around them.

I agree that bitcoin would be worthless without the ability to trade them for something else, but technically, if there were no sellers, then bitcoins could maintain their value without any trade in them...

We are talking practically though.

[Spaceman_Spiff]

I feel like some user on this thread are missing a key point.  If everyone just saved their bitcoins they wouldn't be worth anything!  They would be useless as there would be no trading on the exchanges, no reason for businesses to accept them and just no point.  Yes, its good to save, and yes, it's generally a great thing for the individual, but unless a certain portion of bitcoins are circulated to some extent, they will not grow in value or maintain their current value.  They have to at least support a basic structure around them.

I agree that bitcoin would be worthless without the ability to trade them for something else, but technically, if there were no sellers, then bitcoins could maintain their value without any trade in them...

We are talking practically though.

I think it might be true practically as well.  Bitcoins could have a useful function in being a store as value as well as being a medium of exchange (although a longer track record of resilience against possible attacks on the system would be much appreciated of course).  Although something cannot be a store of value without the ability to exchange it for something else, not a lot of exchange is needed. 

[ElectricMucus]

I feel like some user on this thread are missing a key point.  If everyone just saved their bitcoins they wouldn't be worth anything!  They would be useless as there would be no trading on the exchanges, no reason for businesses to accept them and just no point.  Yes, its good to save, and yes, it's generally a great thing for the individual, but unless a certain portion of bitcoins are circulated to some extent, they will not grow in value or maintain their current value.  They have to at least support a basic structure around them.

I agree that bitcoin would be worthless without the ability to trade them for something else, but technically, if there were no sellers, then bitcoins could maintain their value without any trade in them...

We are talking practically though.

I think it might be true practically as well.  Bitcoins could have a useful function in being a store as value as well as being a medium of exchange (although a longer track record of resilience against possible attacks on the system would be much appreciated of course).  Although something cannot be a store of value without the ability to exchange it for something else, not a lot of exchange is needed.  

In that case it will take only 2 stray investors to start a sell-off. One who takes the profit and the one which follows. Everything else is just basic crowd psychology.

[MoonShadow]

I feel like some user on this thread are missing a key point.  If everyone just saved their bitcoins they wouldn't be worth anything!  They would be useless as there would be no trading on the exchanges, no reason for businesses to accept them and just no point.  Yes, its good to save, and yes, it's generally a great thing for the individual, but unless a certain portion of bitcoins are circulated to some extent, they will not grow in value or maintain their current value.  They have to at least support a basic structure around them.

I agree that bitcoin would be worthless without the ability to trade them for something else, but technically, if there were no sellers, then bitcoins could maintain their value without any trade in them...

We are talking practically though.

I think it might be true practically as well.  Bitcoins could have a useful function in being a store as value as well as being a medium of exchange (although a longer track record of resilience against possible attacks on the system would be much appreciated of course).  Although something cannot be a store of value without the ability to exchange it for something else, not a lot of exchange is needed. 

True.  Gold is a fine store of value, but trades very little percentage wise.