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Author Topic: Bitcoin in "Deflationary Spriral"  (Read 1310 times)
Hawker
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September 04, 2011, 08:36:49 AM
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http://www.technologyreview.com/computing/38392/

Money quote: "if you think that bitcoins are going to become more and more popular, then—again—it's foolish to spend your bitcoins today. The rational thing to do is hoard them and eventually sell them to new users. But that means there will be fewer bitcoins in circulation (and more in people's virtual wallets), making them less useful as an actual medium of exchange and making it less likely that businesses and consumers will ever see Bitcoin as legitimate."

We seem to be getting quite a bit of negative publicity at the moment.  Hopefully the low current value of Bitcoin means that people will indeed use it as a currency rather than hoard it Smiley

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JeffK
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September 04, 2011, 08:43:00 AM
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http://www.technologyreview.com/computing/38392/

Money quote: "if you think that bitcoins are going to become more and more popular, then—again—it's foolish to spend your bitcoins today. The rational thing to do is hoard them and eventually sell them to new users. But that means there will be fewer bitcoins in circulation (and more in people's virtual wallets), making them less useful as an actual medium of exchange and making it less likely that businesses and consumers will ever see Bitcoin as legitimate."

We seem to be getting quite a bit of negative publicity at the moment.  Hopefully the low current value of Bitcoin means that people will indeed use it as a currency rather than hoard it Smiley

In a sense, it's completely right. If you believe Bitcoins will catch on, value will certainly go up as more people enter the economy while the number of Bitcoins slowly reaches the hard cap.

Therefore, it IS in your best interests to hold onto the and sell them later.
FlipPro
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September 04, 2011, 08:49:16 AM
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It's the most fundamental problem with Bitcoin at the moment. One very possible solution is demmurage...

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d'aniel
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September 04, 2011, 09:10:27 AM
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In a sense, it's completely right. If you believe Bitcoins will catch on, value will certainly go up as more people enter the economy while the number of Bitcoins slowly reaches the hard cap.

Therefore, it IS in your best interests to hold onto the and sell them later.
All I have to do is believe?
BitcoinNotify.com
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September 04, 2011, 09:16:35 AM
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http://www.technologyreview.com/computing/38392/

Money quote: "if you think that bitcoins are going to become more and more popular, then—again—it's foolish to spend your bitcoins today. The rational thing to do is hoard them and eventually sell them to new users. But that means there will be fewer bitcoins in circulation (and more in people's virtual wallets), making them less useful as an actual medium of exchange and making it less likely that businesses and consumers will ever see Bitcoin as legitimate."

We seem to be getting quite a bit of negative publicity at the moment.  Hopefully the low current value of Bitcoin means that people will indeed use it as a currency rather than hoard it Smiley

Bitcoin Wiki explains this issue very well: https://en.bitcoin.it/wiki/Deflationary_spiral
hugolp
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September 04, 2011, 09:44:57 AM
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This has been endlessly discussed here: https://bitcointalk.org/index.php?topic=11627.0 and its basically a fallacy. What the merchants have seen is that people actually spend more when Bitcoin is appreciating because people find the prices cheaper and try to take advantage of that.

By the way this article is duplicated, it has already been commented in the forums.
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