But if Bitcoin is always going to go up in value, why would it make sense to spend your USDs buying goods and services instead of using them to buy Bitcoin and increasing the value of that capital?
But if they’re not buying things to buy bitcoin because they want to get returns off their bitcoin then they’re literally doing the exact opposite of buying things with bit coin
It was phrased as a question on purpose, to get you to think about it.
Your assertion is that no one would spend their Bitcoin on bread, and they’d instead use fiat currency. I’m asking you: why would they take their capital, regardless of what form it’s in, and spend it on bread, if they knew they could hold onto that capital and it would appreciate in value?
I see what you’re saying now. You’re basically describing deflation. Yeah people would buy bread (and other essentials to live) but as their currency would be more valuable tomorrow they’d put off buying non essentials. In fiat currency this is seen as prices dropping in bitcoin is seen as the value of the bitcoin going up.
Why would I buy a non essential today when I know it’ll be 10% cheaper tomorrow?
Why would I use my bitcoin to buy anything non essential when if I wait until the next spike it’ll be 30% more valuable than today?
The answer of course is I wouldn’t. I’ll buy it later when it’s 10% cheaper for my fiat currency or 30% cheaper if I’m using bitcoin. It’s not an essential so why spend more to get he same thing.
Currency needs stability in fiat currency to much instability is described in terms of inflation and deflation. Because bitcoin is more of an investment than a currency it’s described as it going up and down.
As there’s no intrinsic value to bitcoin and because there’s no central backing working to maintain the stability it’ll never be anything other than a speculative investment for people who’re already rich or the few who get lucky to make some actual useable money off.
They’d be insane or desperate in extremis to use bitcoin though, given the volatility of the “currency”.
In the short term, maybe.
But if Bitcoin is always going to go up in value, why would it make sense to spend your USDs buying goods and services instead of using them to buy Bitcoin and increasing the value of that capital?
So we’re back to bit coin has no intrinsic value.
No we aren’t…
We’re back to: people would spend it in order to buy things
But if they’re not buying things to buy bitcoin because they want to get returns off their bitcoin then they’re literally doing the exact opposite of buying things with bit coin
I just explained why they would buy things. I said it twice, actually.
I don’t understand your comment then. It reads that people should stop using dollars to buy stuff like bread and just buy bit coin instead.
It was phrased as a question on purpose, to get you to think about it.
Your assertion is that no one would spend their Bitcoin on bread, and they’d instead use fiat currency. I’m asking you: why would they take their capital, regardless of what form it’s in, and spend it on bread, if they knew they could hold onto that capital and it would appreciate in value?
The answer is very obvious: they need to eat.
I see what you’re saying now. You’re basically describing deflation. Yeah people would buy bread (and other essentials to live) but as their currency would be more valuable tomorrow they’d put off buying non essentials. In fiat currency this is seen as prices dropping in bitcoin is seen as the value of the bitcoin going up.
Why would I buy a non essential today when I know it’ll be 10% cheaper tomorrow?
Why would I use my bitcoin to buy anything non essential when if I wait until the next spike it’ll be 30% more valuable than today?
The answer of course is I wouldn’t. I’ll buy it later when it’s 10% cheaper for my fiat currency or 30% cheaper if I’m using bitcoin. It’s not an essential so why spend more to get he same thing.
Currency needs stability in fiat currency to much instability is described in terms of inflation and deflation. Because bitcoin is more of an investment than a currency it’s described as it going up and down.
As there’s no intrinsic value to bitcoin and because there’s no central backing working to maintain the stability it’ll never be anything other than a speculative investment for people who’re already rich or the few who get lucky to make some actual useable money off.