Hacker News Reader

Comment by jafaku | Hacker News Reader

> The money supply for BTC increases slowly. This is discouraging transactions because (if you believe in the currency and its future) you should hoard your BTC. The amount of new BTC going into circulation is low, barring any disaster (e.g. Germany banning BTC, Kraken hacked), it just makes sense to hold because what you have today will be worth more tomorrow.

Just another Dogecoin shill with unproven claims. What you said is absolutely false. In donations alone, bitcoiners have spent more (millions of dollars worth at the time) than dogecoiners have spent in everything.

Dogecoin is not even in the top 5 anymore: http://coinmarketcap.com/

It was just a short lived fad, like many other copycoins. Ever heard of Infinitecoin? Probably not. Yet it also entered the top 5 at one point.

View on HN

Holding and speculating is a valid use case for BTC. Many people see it as an investment and don't use it as a currency so it's not absolutely false.

If you are going to use coinmarketcap, at least filter out the non-mineable coins, Dogecoin is in the top 4.

What some people do with it doesn't invalidate what I said at all. I'm just saying that being deflationary doesn't stop you at all from spending it. What's the difference between holding it and only spending dollars, and spending your coins and buying more coins with your dollars? There is no difference. In fact, since lots of places accepting Bitcoin give you discounts if you use Bitcoin, you are encouraged to spend it instead of dollars.

I didn't read the article but the part you quoted is basic economics. If some currency has usage but a limited supply - even if it's just cigarettes in a prison - its price will go up. When this happens, it gives a hurdle rate on spending. If relatively few cigarettes are making it into a prison, but there is no other convenient form of currency, you might well hold off trading some of yours because it will be worth more in a couple of weeks. Gold certainly can suffer from this effect and is a main reason that growth was unlocked when paper got off a 100% gold standard: if the economy needed money, you no longer had to mine it.

This is NOT a normative statement, just a fact. Bitcoin spending is going to be curtailed (fact) by a limit on the speed of increase of the money supply, just as spending is spurred (fact) by easy credit and inflation.

(Inflation for a fact spurs spending, because if inflation is 7%, then holding onto money costs you 7% per year, whereas spending it on anything can let you retain that value.)

These are not normative statements but completely uncontroversial (and intuitive) economics.

Yeah yeah, "basic economics". I'm getting really tired of all these unproven theories. Economics at this point has turned into a pseudoscience just like Psychology. Academics publishing untestable bullshit and people like you citing them ad nauseam, instead of showing some actual evidence.

You are absolutely wrong in your comparison with cigarettes, because in prison you don't have enough liquidity of cigarettes. On the other hand, you can buy all the Bitcoin you want and use it to buy whatever you were going to buy anyway, and even get a discount.

No, you can't "buy all the bitcoin you want" - it's simply not true. Look, Facebook's acquisition of Whatsapp included $4B in cash. If Whatsapp had said, "but you need to pay us in bitcoin, we'll set the price at the current trading price", then too bad, Facebook couldn't have said yes, because it would be impossible to source that many bitcoins. The total value of all bitcoins in existence is $5B today, and I doubt it could buy up 3/4 of them, including ones that were lost or refused to sell, for any amount of money. Just as there is no amount of money (in any currency) I could give you that you could spend to get 95% of all the dollars in existence into one room to give to someone - because some people will hold out. You just can't get them all. Stores, banks, the rest of the economy, everyone uses dollars. You can't just get 95% of the ones in existence. More precisely, it is "impossible" to get 95% of all dollars into one room. A hundred trillion dollars' worth of other currency and values of various kinds wouldn't come close to letting you buy up 95% of all dollars in existence - at any price.

And there are a LOT of dollars in existence.

There are comparatively VERY few bitcoins in existence.

So this simple example shows that it is absolutely false that you can buy all the bitcoins you want. If Facebook announced that it needed $4B in bitcoins at today's price, then most people would instantly start hoarding it, the price would jump to $10,000 per bitcoin, and ordinary people would be unable to buy it at any price.

Well obviously if you fix the price of Bitcoin at a certain point in time, later on it's gonna be a lot more expensive, especially if someone throws 5B at it.

Besides you are trying to find an edge case to argue about common cases, which is stupid and lame.

No, I'm showing you how the laws of economics work by appealing to your intuition.

The part you quoted before ("This is discouraging transactions because (if you believe in the currency and its future) you should hoard your BTC. The amount of new BTC going into circulation is low, barring any disaster (e.g. Germany banning BTC, Kraken hacked), it just makes sense to hold because what you have today will be worth more tomorrow.") is totally completely uncontroversial - and this is super easy to show, not only just in historical terms or by looking at how people actually behave, but if you simply think it through yourself. It's just obvious and uncontroversial.

Reply on news.ycombinator.com