7 thoughts on “Hive45 Singularity Podcast #53 – Bitcoin P2P Virtual Currency”

  1. Yogi Berra said it best, in another context, that of a fashionable restaurant: "Nobody goes there any more, it's too crowded."

    Nobody will want to use BTC, because everybody wants BTC. Huh?

    Eventually, once prices expressed in BTC stabilize, people will use BTC for long-term arrangements: loans, bonds, employment, raw materials purchase contracts, etc. As that happens more and more, the future demand for BTC will be more predictable, and prices will tend to become even more stable.

  2. In the US in the late 19th century, prices in general were in decline, which was great for people who bought things (everyone). Also great for those with dollar-denominated assets (like loans made to farmers, or bonds), but a problem for those with dollar-denominated liabilities (like those farmers or bond issuers).

    I strongly suspect that competing currencies, if they had been allowed, would have produced markets for loans in currencies that were stable, relative to prices in general.

  3. Of course, if everyone who deals accepts BTC does hold on to them (briefly) before spending them, then the velocity of (BTC) money increases, which shows up as lower prices expressed in BTC.

    But even if BTC prices of things in general do decline by 3% a year or whatever, it's hardly a problem. Suddenly everything is on a Moore's Law-type curve (and pretty much the same one). People still buy computers even though they'll get more for their money by waiting. The same applies to other things.

  4. The concerns about bitcoin "deflation" are a bit overblown.

    If owning bitcoin becomes so popular that few actually spend it. the problem is a non-problem. The price of bitcoin relative to other currencies will rise. Posting BTC prices will be a hassle because they will have to continually adjust them downward to keep them meaningful. Even if automated, there will be accounting tax hassles. Only BTC speculators and people about to sell BTC to them will own them. BTC demand and prices fall.

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