PrintCoins (OP)
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January 03, 2012, 08:17:58 PM |
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I get the feeling that people spend less bitcoins when they see the price going up. This is an unfortunate side effect where all bitcoin holders become speculators and are just waiting for the market to tops off and buy things (or convert back to cash).
So the more it is going up in value, the less actual economic activity it is used in.
I am looking forward to it leveling back off again. The ups and downs are bad for bitcoin.
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BookofNick
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January 03, 2012, 08:25:15 PM |
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Personally, I spend more bitcoins when the price goes up. Since I bought low, I feel I am getting more value for my money.
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Matthew N. Wright
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Hero VIP ultra official trusted super staff puppet
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January 03, 2012, 08:31:02 PM |
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Personally, I spend more bitcoins when the price goes up. Since I bought low, I feel I am getting more value for my money.
Ditto. I waited till the price went up to pay for many things.
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2weiX
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January 03, 2012, 08:44:13 PM |
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I get thrice the orders since btc is over 4. It feels like miners and buyers-low dump them to me for gold and silver instead to mtgox.
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imanikin
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January 03, 2012, 08:52:52 PM |
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i was willing to spend much more when the price was higher, because i bought them so much lower. I still use them whenever i can though, because i buy more of them when the rate drops. BTW, i thought i heard in this video something about how at MtG there is some kind of a mechanism now to protect merchants against exchange fluctuation losses as well... Bitcoins are "cash" to me. So, i am not converting them to other forms of "cash" (currency) unless i have to for some reason, because i think there is much more upside potential in them, compared to any other currency, including metal...
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tonto
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January 03, 2012, 08:53:43 PM |
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while I bought a couple things when it hit 25, I bought several coins when price was at 16, so I'm hoping it hits 17 so I can feel better about myself
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ThiagoCMC
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฿itcoin: Currency of Resistance!
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January 03, 2012, 11:23:10 PM |
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I get the feeling that people spend less bitcoins when they see the price going up. This is an unfortunate side effect where all bitcoin holders become speculators and are just waiting for the market to tops off and buy things (or convert back to cash).
So the more it is going up in value, the less actual economic activity it is used in.
I am looking forward to it leveling back off again. The ups and downs are bad for bitcoin.
Welcome to a deflationary economy!!!
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Revalin
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January 04, 2012, 03:36:29 AM |
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Welcome to a deflationary economy!!! This. It's why I support creating a deflation-neutral, bubble-resistant alternative coin.
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War is God's way of teaching Americans geography. --Ambrose Bierce Bitcoin is the Devil's way of teaching geeks economics. --Revalin 165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
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Littleshop
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January 04, 2012, 03:42:41 AM |
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i was willing to spend much more when the price was higher, because i bought them so much lower. I still use them whenever i can though, because i buy more of them when the rate drops. BTW, i thought i heard in this video something about how at MtG there is some kind of a mechanism now to protect merchants against exchange fluctuation losses as well... Bitcoins are "cash" to me. So, i am not converting them to other forms of "cash" (currency) unless i have to for some reason, because i think there is much more upside potential in them, compared to any other currency, including metal... People do spend more at my store when bitcoins are worth more. The most activity was when bitcoin was $10 or more.
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PrintCoins (OP)
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January 04, 2012, 06:46:22 PM |
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Welcome to a deflationary economy!!! This. It's why I support creating a deflation-neutral, bubble-resistant alternative coin. I don't see how you can do that without making it centrally controlled and acting like the fed (printing more or less based upon an inflation target of 0%).
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TTBit
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January 04, 2012, 07:05:56 PM |
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Keep in mind its a two way street: People would rather work for a strong currency than a weak one. Production & quality should increase in a deflationary environment.
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good judgment comes from experience, and experience comes from bad judgment
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Steve
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January 04, 2012, 07:09:33 PM |
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Using bitcoin to buy something doesn't have to have any net effect on your bitcoin position. So whether the price rises or falls it does't (or shouldn't) matter when it comes to purchasing decisions. However, the issue that we do have is that we have limited tools to manage the stock and flow of bitcoins. It's mainly a tools issue that the bitcoin exchange rate can have an effect on people's buying habits. With adequate tools to manage stock and flow, even extreme volatility shouldn't have any affect on commerce using bitcoin.
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Technomage
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Affordable Physical Bitcoins - Denarium.com
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January 04, 2012, 07:13:13 PM |
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It's actually been proven that rising prices are good for Bitcoin merchants, so it's basically good for everyone. The only real problem with the price has been volatility, which will get better slowly once the sustained market cap gets bigger.
The problem with these "issues with deflation" arguments is that they are always theoretical and do not take into account everything. When we see increasing Bitcoin price, it is usually because people appreciate Bitcoin more and we get more users into the Bitcoin economy. That means there are more people using the currency leading to increased activity at merchant sites.
The other issue is that for some people it means increased purchasing power, meaning that if you bought or produced bitcoins at a lower price point, you have more purchasing power when the price goes up. This obviously means that you now have the ability to buy stuff you necessarily couldn't before.
In my opinion this issue could only become a real issue if the price always went up and we had a good way of predicting how much it goes up in a certain timeframe. Hyperdeflation can kill an economy but all the cases of hyperdeflation in history have been because of real issues. If the usage of a currency grows fast enough to cause temporarily hyperdeflation, it will NOT kill the economy. On the contrary, it will grow the economy. Thinking otherwise is ludicrous.
As it is with inflation, there are many reasons for deflation and there are different levels of it. I have a hard time seeing Bitcoin having a problem with this for any long period of time. Temporarily it can cause issues but it's a self-correcting issue in this case.
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Denarium closing sale discounts now up to 43%! Check out our products from here!
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P4man
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January 04, 2012, 07:15:19 PM |
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Using bitcoin to buy something doesn't have to have any net effect on your bitcoin position.
+2.5
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Gabi
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If you want to walk on water, get out of the boat
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January 04, 2012, 07:55:41 PM |
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Personally, I spend more bitcoins when the price goes up. Since I bought low, I feel I am getting more value for my money.
^This Buying is like selling bitcoins. People sell bitcoins when price goes up, mostly. Sure, some apply the buy high sell low rule...
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cypherdoc
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January 04, 2012, 08:24:52 PM |
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if anything, if i were a merchant, i would be selling goods to accumulate Bitcoins as fast as possible due to their potential for value increase.
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DrKennethNoisewater
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January 04, 2012, 08:30:57 PM |
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I get the feeling that people spend less bitcoins when they see the price going up. This is an unfortunate side effect where all bitcoin holders become speculators and are just waiting for the market to tops off and buy things (or convert back to cash).
So the more it is going up in value, the less actual economic activity it is used in.
I am looking forward to it leveling back off again. The ups and downs are bad for bitcoin.
This makes no sense.
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Revalin
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January 05, 2012, 08:48:31 AM |
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I don't see how you can do that without making it centrally controlled and acting like the fed (printing more or less based upon an inflation target of 0%). My idea (working name RevCoin) is to mine an exchange rate for a currency basket into the blockchain. Miners can use any quote source they want, but relay nodes will only propagate it if they agree the quote is reasonable (preventing miners from gaming it). Heavily smooth the value so that the price can float to let market makers and speculators provide liquidity by trading short-term fluctuations, but over the long term the coins generated per block are adjusted to keep the exchange rate flat. As the number of coins in existence grows, the smoothing-time will also grow to let the price float more; when the BTC market cap reaches the scale of fiat money supplies, it will be essentially free-floating. The idea is to keep a stable value and prevent speculative "to the moon" fluctuations until it's large enough to stand on its own. If it fails, of course there's no way to deflate to compensate (it will reset the target and recapture control at a lower level), but I think long term success is more likely without the current wild value fluctuations. See also: EnCoin, GEM.
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War is God's way of teaching Americans geography. --Ambrose Bierce Bitcoin is the Devil's way of teaching geeks economics. --Revalin 165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
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notme
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January 05, 2012, 08:53:08 AM |
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I don't see how you can do that without making it centrally controlled and acting like the fed (printing more or less based upon an inflation target of 0%). My idea (working name RevCoin) is to mine an exchange rate for a currency basket into the blockchain. Miners can use any quote source they want, but relay nodes will only propagate it if they agree the quote is reasonable (preventing miners from gaming it). Heavily smooth the value so that the price can float to let market makers and speculators provide liquidity by trading short-term fluctuations, but over the long term the coins generated per block are adjusted to keep the exchange rate flat. As the number of coins in existence grows, the smoothing-time will also grow to let the price float more; when the BTC market cap reaches the scale of fiat money supplies, it will be essentially free-floating. The idea is to keep a stable value and prevent speculative "to the moon" fluctuations until it's large enough to stand on its own. If it fails, of course there's no way to deflate to compensate (it will reset the target and recapture control at a lower level), but I think long term success is more likely without the current wild value fluctuations. See also: EnCoin, GEM. That would only work if you could also deflate it. Perhaps the protocol could require destroying transaction fees instead of paying the miner. Of course, what's the incentive for that block then? Perhaps you could just destroy a percentage.
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Revalin
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January 05, 2012, 09:03:41 AM |
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If massive growth is "inevitable", then over the long term you only need to control one way. If it's failing, people lose value... Them's the breaks.
You can't prop up an unbacked currency. Destroying a percentage during a transaction just means that the recipient demands more coins (IE, the coins are devalued); so you may as well just admit that the coins are devalued and spread that hit among all holders instead of the ones who are trying to participate in commerce. Taxing commerce will just make it worse.
My idea is that preventing the bubbles will prevent the huge drops from occurring in the first place. It will also completely end the whole "it's a pyramid scheme" objections, and I suspect that will get a whole lot more people involved.
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War is God's way of teaching Americans geography. --Ambrose Bierce Bitcoin is the Devil's way of teaching geeks economics. --Revalin 165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
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