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Author Topic: Forgive my ignorance, but shouldn't hoarding = decreasing value of BTC?  (Read 3797 times)
Anth0n
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June 09, 2011, 07:06:02 AM
 #21

Hoarding means less available on the market = less supply = more value.

More value = more Bitcoin merchants = more demand = more hoarding. Repeat loop.

Each iteration = slower growth due to fewer people not yet using Bitcoin. More coins are spent when price increases are slower.

Equilibrium is reached, Bitcoin economy flourishes!
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bittersweet
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June 09, 2011, 07:21:34 AM
 #22

It's pushing me.  I want to stick around but there's no circulation.  I have a nice product.  I have plans to reinvest BTC into a bitcoin themed die.  I have no shortage of inquiries about it.  I know that demand is there but Gresham's Law keeps people paying me in USD.

Go figure.

People hoard because they expect the value of Bitcoins to rise. So I have my theory: to fight this, Bitcoin prices should have a discount comparing to USD prices, even below production cost. You may think it doesn't calculate, but actually it does if you don't sell the Bitcoins immediately. The discount is the price you pay for getting currency that deflates by design.

You could do some calculations and predictions about deflation and how long you will keep Bitcoins, but psychologically, any discount would help - if people could trade USD to Bitcoins and buy your products cheaper.

My Bitcoin address: 1DjTsAYP3xR4ymcTUKNuFa5aHt42q2VgSg
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June 09, 2011, 08:59:34 AM
 #23

It's pushing me.  I want to stick around but there's no circulation.  I have a nice product.  I have plans to reinvest BTC into a bitcoin themed die.  I have no shortage of inquiries about it.  I know that demand is there but Gresham's Law keeps people paying me in USD.

Go figure.

People hoard because they expect the value of Bitcoins to rise. So I have my theory: to fight this, Bitcoin prices should have a discount comparing to USD prices, even below production cost. You may think it doesn't calculate, but actually it does if you don't sell the Bitcoins immediately. The discount is the price you pay for getting currency that deflates by design.

You could do some calculations and predictions about deflation and how long you will keep Bitcoins, but psychologically, any discount would help - if people could trade USD to Bitcoins and buy your products cheaper.

I'm giving loans based on a similar concept. In the end the more I lend the lower fees I charge.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
TradersEdgeDice
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June 09, 2011, 11:21:01 AM
 #24

It's pushing me.  I want to stick around but there's no circulation.  I have a nice product.  I have plans to reinvest BTC into a bitcoin themed die.  I have no shortage of inquiries about it.  I know that demand is there but Gresham's Law keeps people paying me in USD.

Go figure.

People hoard because they expect the value of Bitcoins to rise. So I have my theory: to fight this, Bitcoin prices should have a discount comparing to USD prices, even below production cost. You may think it doesn't calculate, but actually it does if you don't sell the Bitcoins immediately. The discount is the price you pay for getting currency that deflates by design.

You could do some calculations and predictions about deflation and how long you will keep Bitcoins, but psychologically, any discount would help - if people could trade USD to Bitcoins and buy your products cheaper.

I like that idea.  I need to implement it in a different way from the simple mybitcoin link I currently have.  Maybe I can put up a note for now.

Buyers who mention this thread can take 30% off the current BTC price.  :-)

Like what I posted?

Buy my Metal FX Currency Dice Set
http://tradersedgedice.com

Buyers using bitcoin get a deep discount.  Free worldwide shipping.

Web of Trust: http://bitcoin-otc.com/viewratingdetail.php?nick=TradersEdgeDice&sign=ANY&type=RECV

GPG Identity: http://bitcoin-otc.com/
tymothy
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June 09, 2011, 01:21:23 PM
 #25


Quote
People hoard because they expect the value of Bitcoins to rise. So I have my theory: to fight this, Bitcoin prices should have a discount comparing to USD prices, even below production cost. You may think it doesn't calculate, but actually it does if you don't sell the Bitcoins immediately. The discount is the price you pay for getting currency that deflates by design.

You could do some calculations and predictions about deflation and how long you will keep Bitcoins, but psychologically, any discount would help - if people could trade USD to Bitcoins and buy your products cheaper.

Bingo. It also makes consumers not using bitcoins willing to use them and increases demand for Bitcoins, driving up prices. "Hmm, I could pay you 100 USD for a product, or I could go to an exchange, spend $70 to get bitcoins and then give them to you and get the product. It's a little hassle, but I'll do it to save 30%" Afterwards, that consumer's been setup with a bitcoin account and is better able to participate in future exchanges.
Arius
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June 10, 2011, 03:05:12 PM
 #26

You guys are looking at this all wrong.  Yes, the BTC is being used as a crypto-commodity , but the reason is very different then you imagine.  Money must do 2 things, new money needs to do one more.  First, money must be a store of perishable value.  I cannot hold radishes for for two years and still expect them to be valuable.  I can hold money.  The BTC can be easily traded, so it holds value.  Second, money must be a means of exchange.  BTCs are not fully developed as a means of exchange.  At this point, BTCs are only exchanged by a few people and businesses.  The special advantage that the BTC offers is freedom from a central monetary authority, which I think is pretty cool.  The reason that the BTC isn't acting like money, look at the businesses that exist around the BTC right now.  The exchanges are the most well developed.  MtGox may be the most used BTC business that currently exists.  So, of course people are trading BTCs like a commodity.  The number one priority for the BTC community is to bring more BTC businesses online that deal in staple goods.  Here's a free idea for ya.  Someone take the fortune you've made mining, and buy wholesale, non-perishable foods.  Sell those goods in BTCs only, advertising that, if the government knows who bought the food, they can come and take it.  To sell BTC-based businesses to non-BTC using people, the advantage of BTC over a central monetary authority needs to be played up a lot more.
TradersEdgeDice
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June 10, 2011, 03:47:22 PM
 #27

Okay, I implemented the idea above.

http://forum.bitcoin.org/index.php?topic=14591.0

BTC users have a significant advantage over fiat users.

We'll see how it goes.

Like what I posted?

Buy my Metal FX Currency Dice Set
http://tradersedgedice.com

Buyers using bitcoin get a deep discount.  Free worldwide shipping.

Web of Trust: http://bitcoin-otc.com/viewratingdetail.php?nick=TradersEdgeDice&sign=ANY&type=RECV

GPG Identity: http://bitcoin-otc.com/
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