The Bitcoin Millionaire Syndrome extreme Bitcoin speculation and Bitcoin Economy

[Currencevents]

I have caught the Bitcoin Millionaire Syndrome. I think that some day my few Bitcoins may become worth anywhere from a small fortune to a large fortune. This means that I am much more reluctant to actually spend Bitcoins. Is it possible that this thinking and behavior is common among those who own Bitcoins and is it detrimental to the expansion of the Bitconomy? for a more in depth post look at http://wp.me/p2VF4G-r. Please forgive me for putting this on the wrong board.

[Largo]

There is no problem with hoarding bitcoins, in my opinion it even strengthens bitcoin because it gives them value and makes them stable.

It doesnt matter if there are 20million bitcoins in active circulation or only 1 million.

The reason why the total value of trades in bitcoins is so low is because its usually easier and cheaper to just buy things with FIAT cash, but 1. that will change for some things and 2. there are many things which were not possible with FIAT cash but are now possible with bitcoin (even if its only hoarding lol).

[alexmat]

Let me know how hoarding works out for you. In my experience there are so many reasons to cash out or invest bitcoins in other projects that hoarding them starts to look like the slowest way to get rich. And if you're looking to get rich, there's no reason to take the slow lane.

Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before. Lot's of starving millionaires in Zimbabwe.

[Largo]

Yeah who knows, but its the problem (or not) of the person hoarding bitcoins, it doesnt affect bitcoin at all, at least not in a negative way.

Personally i got enough bitcoins to buy a nice new car right now, but that would feel totally useless to me compared to just keeping my bitcoins.
Maybe i see it more like a bet, and not like an investment, but i know i dont want to miss betting on this.
The risk vs reward ratio just looks too good  

[Johnathan]

Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before. Lot's of starving millionaires in Zimbabwe.

It's difficult to judge whether Bitcoin will act as a good store of purchasing power in the way you describe.  Intuitively, it would seem so, and it's exciting to think of it as gold-like in this way.  Right now the USD exchange rate volatility is way too high for me to be comfortable leaving significant BTC stored on the blockchain, but I see this improving as Bitcoin gains more mainstream recognition and use.

[DeathAndTaxes]

First.  There is no such thing as "hoarding", it is a pejorative from a society focused on consumerism.  The term you are looking for it "SAVING".  People have saved throughout history.

The "millionaire problem" is self correcting though.  If demand doesn't materialize at the same rate because the economy expands slower because people aren't engaging in as much commerce then the rise in the exchange rate will slow.  People will save less as expectations are lowered to match reality.  Hypothetically say over the next 3 years Bitcoin exchange rate "only" rises from ~$14 to $20 it likely will affect your mental outlook.  

[Currencevents]

I'm betting as it were on the vast potential Bitcoin has for an increase in value. I don't think that the inflation of the US dollar will be directly and mostly inverse to the change in value of Bitcoin. It seems to me that inflation of USD will drive way more people into Bitcoin as a way to save their money.

Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before

.
 Look at it like more people with "more" (inflated) money will be investing in Bitcoin; not just the same people with "more" (inflated) money

My outlook is based on the fact that I think and hope that people will be smart enough to adopt an untaxible, untraceable currency that can't be inflated by a central distributor/printer; and that outlook will hopefully never change.

[dancupid]

Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.

[lucif]

https://bitcointalk.org/index.php?topic=135374.0

[thezerg]

Let me know how hoarding works out for you. In my experience there are so many reasons to cash out or invest bitcoins in other projects that hoarding them starts to look like the slowest way to get rich. And if you're looking to get rich, there's no reason to take the slow lane.

Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before. Lot's of starving millionaires in Zimbabwe.

investment in bitcoin denominated projects contains all the risk of bitcoin + counterparty risk + the project risk.  So that a reason to save bitcoins rather then "invest" them.

If bitcoin will have gotten to 100USD solely due to inflation within the next few years, it will actually get to more like 10000USD because people will be running from fiat like its on fire.  In a hyperinflationary world currency event the only money that will be effective for international commerce will be PMs or bitcoin.

But don't consider the above to be a prediction.  Much more likely is sustained yearly inflation at < 20% -- that will do the job over the long term and keep society stable.  Frog in a pot.

[szuetam]

Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.

True so I'm going to rent rooms in my flat starting march with dicount if someone will decide to pay in BTC

[thoughtfan]

True so I'm going to rent rooms in my flat starting march with dicount if someone will decide to pay in BTC

You don't happen to be in SW London do you?!

Around the same time I'm going to be looking for somewhere new to rent and was considering requesting a landlord to take Bitcoin on Craigslist.  I managed to persuade my current landlord to take one casascius 25BTC physical coin in part payment one month but he doesn't get it and will simply leave it in his safe for the foreseeable.  Better than nothing but ...  the whole of my rent monthly in bitcoin? - now that would be good.

[ArticMine]

True so I'm going to rent rooms in my flat starting march with dicount if someone will decide to pay in BTC

You don't happen to be in SW London do you?!

Around the same time I'm going to be looking for somewhere new to rent and was considering requesting a landlord to take Bitcoin on Craigslist.  I managed to persuade my current landlord to take one casascius 25BTC physical coin in part payment one month but he doesn't get it and will simply leave it in his safe for the foreseeable.  Better than nothing but ...  the whole of my rent monthly in bitcoin? - now that would be good.

Or maybe he does get it. It may even have something to do with the reason he managed to accumulate enough wealth to become a landlord in the first place. 

[thoughtfan]

True so I'm going to rent rooms in my flat starting march with dicount if someone will decide to pay in BTC

You don't happen to be in SW London do you?!

Around the same time I'm going to be looking for somewhere new to rent and was considering requesting a landlord to take Bitcoin on Craigslist.  I managed to persuade my current landlord to take one casascius 25BTC physical coin in part payment one month but he doesn't get it and will simply leave it in his safe for the foreseeable.  Better than nothing but ...  the whole of my rent monthly in bitcoin? - now that would be good.

Or maybe he does get it. It may even have something to do with the reason he managed to accumulate enough wealth to become a landlord in the first place. 

Sorry, I wasn't clear.  He certainly gets property - and business in general come to that.  What I meant to say is he's not technically inclined and doesn't get Bitcoin.  He just liked the look of the shiny coin and trusted me enough that its value was what I said it was at the time.  Of course he's gained about 10% on it since!

[byronbb]

Let me know how hoarding works out for you. In my experience there are so many reasons to cash out or invest bitcoins in other projects that hoarding them starts to look like the slowest way to get rich. And if you're looking to get rich, there's no reason to take the slow lane.

Also, it may be the case that when bitcoin gets to $100, it may be because the us dollar has lost an inverse proportion in purchasing power, so you end up with the ability to buy as much as you did before. Lot's of starving millionaires in Zimbabwe.

My hoarding has quadrupled my investment so far, so it's working out for me.  Comparing the Zimbabwe Dollar with the USD is apples and watermelons. Moreover the US dollar index has risen and fallen 2% in a year. It's not some avalanche of depreciation.

[farlack]

Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.

Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.

[ArticMine]

Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.

Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.

BitPay charges way less than 6% to convert to USD.

[farlack]

Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.

Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.

BitPay charges way less than 6% to convert to USD.

Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.

Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.

[atomium]

I posted a similar thread here as well, seems like everyone is thinking the same https://bitcointalk.org/index.php?topic=135858

[ArticMine]

Logically the merchants should be thinking in the same way, and pricing their products in Bitcoins with a substantial discount compared to the fiat price.
Not only do they save on creditcard fees, but they also receive Bitcoins directly without having to touch any fiat.
The market should automatically adjust the price of things in Bitcoins to take into account the attractiveness of holding bitcoins over fiat.
So people who hold bitcoins can expect their bitcoins to be worth more, and also to be able to get things cheaper than everyone else.

Right it might be cheaper to accept bitcoins, like bitpay at 1%, but its also like 6% to change the currency to usd.

BitPay charges way less than 6% to convert to USD.

Sorry, I wasn't clear I guess, not 6% by bitpay, but for other exchanges. Not all transactions are via bitpay.

Edit: I just checked bitpays stats out, 1% transaction + 2.69 to cash to bank. 3.69% is a huge percentage. It might not seem like a lot, but if you do $100,000 with normal processors at 1.9% you're paying $1900 in fees, bitpay is $3,690 in fees. Which isn't completely terrible, just stating lowering prices just because accepted in bitcoin isn't logical.

It is 2.69% for USD payout or 0.99% for BTC payout https://bitpay.com/pricing.