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Author Topic: Why there won't be a lot bitcoin-denominated trade... maybe  (Read 943 times)
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June 07, 2011, 04:45:13 AM

I've got some dollars. I've got some bitcoins. I need to buy some good or service "A". So long as real interest rates are negative, I'd rather part with my dollars than my appreciating bitcoins. So I hoard bitcoins and I spend dollars. So I'm thinking there's a powerful tendency for bitcoins to serve as a store of wealth like gold rather than as a currency in commerce so long as this state of affairs persists. I expect it will persist, because positive real rates would mean a debt-service burden the couldn't support and a cost of capital that would sink many companies. A terrifically deflationary scenario. Similar rationale applies outside the US. And so long as the Berrnank and those like him are practicing their theory at the Fed and other central banks, they probably won't let it (positive real rates) happen.

I don't think BTC being used as a store of value is bad for us, or bad for bitcoin. Just seems like a more likely evolution of events to me than anything else.

Well. Thanks for letting me get that off my chest.

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Garrett Burgwardt
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June 07, 2011, 04:51:07 AM

I spend BTC, simply because it's easier than dollars.
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June 07, 2011, 12:21:55 PM

I think the main reason people either split into "I love bitcoin" or "bitcoin isn't money" is because of the entire way we've been raised to think about currency. It takes some effort to educate and research the topic, which prevents some from realizing the full potential of a new system. It is easier to mock and deconstruct, rather than seriously examine and criticize with facts.

The initial resistance we're seeing to adoption by a small quarter doesn't bother me at all - in fact, I'd prefer it this way than suddenly the whole world being ga-ga over the idea. It means bitcoin has to prove itself, and that is just fine. It is doing that every single day. When we wake up and the mainstream press is finally praising it, then we'll know we have arrived.

The best part is we don't have to wait for anyone to confirm what we already know. That is why we're early adopters, not followers.

Those that take the risks stand to win everything, and you can be damned sure our collective interest will go far in preserving this new financial freedom.

fortitudinem multis - catenum regit omnia
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June 07, 2011, 02:21:45 PM

You do not account for people, who get their wage in bitcoin.
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