hoarding bitcoins

[Starscream]

EDIT: The following applies if you think of Bitcoin as a currency. If you think of it as a commodity, then you have to take a serious think about what makes it valuable in the first place...

The only way Bitcoin will remain viable is if people circulate it. This is the basic idea behind all currencies.

If people don't spend it, somehow, then eventually it will be just a code sitting on a harddisk somewhere, with no value beyond that tiny portion's value in metal.

Most serious speculators realise that in order to have the currency retain (or gain preferably) value, you need to make it useful - i.e. to SPEND it.

The bitcoin you spend today will help make your next bitcoin worth more.

Rit.

This is so true. If everyone were to just hoard their BTC than you'd effectively kill the market which will reduce the price of BTC to, well, zero.

@OP - I'd advice you keep your strategy to yourself, cause as an individual hoarding BTC you won't make a difference, but if you start making threads, i.e. influencing other to do the same (by question, or even mocking, those who spend), than you're just contributing to shrinking the market and eventually, the reduction of BTC value.

[pbass]

Hi Killua and starscream,

thanks so much for the reply, both of you. I still don't think people will not buy much with bitcoins when it's is going up in price and I don't think many people will start buying stuff with bitcoins just to make the price go up, apart from those who have been made very rich from it already.   There must be so many people like me with their only intention being to buy at a low price and sell at a good profit

[chezz]

Ideally I am also going to try to accumulate as many bitcoins as possible. Once we approach the end of the supply I predict things will sky rocket assuming legislation hasn't hindered it. If the world wants to kill bitcoin they will do it well before 2040.

[DannyHamilton]

- snip -
Once we approach the end of the supply
- snip -

You mean in the year 2104?  I don't expect to live that long.

[TheHighwayPhantom]

I think because bitcoin is still so young that it is fluctuating so much. I think as more people & businesses use it then it will find a more steady value. It needs to be more mainstream. Then the hoarders can spend it more comfortably. Also the main spenders of bitcoins are on the blackmarket & are anonymous donors so the fluctuations dont really matter that much as they are probably cashed out into fiat as soon they are received. Still interesting question.

[odolvlobo]

Why not spend bitcoins? You can get more any time you want. There no reason why you can't hoard and spend at the same time.

[msc]

It's nice that more and more businesses are using Bitcoin, but mostly via services like BitPay. You pay in Bitcoin, but the company immediately is getting dollars in return. That way there's no price pressure.

That depends on how the service operates.  If they wanted to assume the risk, BitPay could credit their customer's account immediately with the dollar value, and hold the Bitcoins until they're able to sell them for a slightly higher price.  That way, Bitpay's sales would cause the BTC price to tick up instead of down.

If people don't spend it, somehow, then eventually it will be just a code sitting on a harddisk somewhere, with no value beyond that tiny portion's value in metal.

That won't happen.  As long as people are legally able to exchange BTC, someone will always be willing to sell for some price.  If that price is higher than anyone wants to pay, then eventually someone will need to sell their BTC, and will accept a lower price.  It evens out, or it continues to fluctuate.  Complete hoarding doesn't equate to zero value.  If anything, it equates to infinite value.  

[Ritual]

Sorry msc, but you're incorrect. I think that you have an odd idea of what makes a currency valuable. Sitting in a virtual mattress somewhere, forgotten, with nobody interested in it anymore does not make the price go up.

Google people who kept their life savings in a pillowcase when decimalisation happened in the uk and Ireland.

[msc]

Sitting in a virtual mattress somewhere, forgotten, with nobody interested in it anymore does not make the price go up.

If nobody's interested in buying it, yes, the price goes to zero.  If nobody wants to sell it because it's too valuable to give up, that's the opposite, and it's what I consider hoarding.

[Merlinn]

The value of Bitcoin is a matter of what it has the purchasing power to buy. Sure, a major aspect of coin hoarding is related to speculation, but on the flip side, until there are mainstream merchants where you can easily convert your BTC to a purchased item, hoarding is encouraged.

Once there are more outlets to spend Bitcoin and it becomes more liquid, I suspect that hoarding will lessen significantly.

[Sutters Mill]

Remember that eventually, somewhere in the next 10 years, ALL the Bitcoins will be mined and in the system.

I agree with the overall sentiment of your post, but just wanted to point out this one discrepancy.  It won't be until roughly the year 2140 before all 21M bitcoins have been mined.  See reference here:

"By 2140 there will be approximately 21 million bitcoins in existence and transaction processing will be solely incentivized by transaction fees."
http://en.wikipedia.org/wiki/Bitcoin

Thanks for the clarification and apologies for the misleading post. Classic read online and believe scenario.