/biz/ - Business & Finance

The "experts" aren't wrong. Things like deflation and volatility are negative aspects of a freely traded currency that has increasing demand and limited supply. Deflation reduces spending because it increases the individual's perceived value of the currency, they would rather spend a "worse" money instead. Think about it, would you actually pay for some bullshit with your BTC or would you rather use your fiat? I have had many opportunities to pay for things with crypto and have chosen not to every single time because I feel that I can make a larger return holding on to the crypto than spending it. This is why bitcoin will have difficulty becoming a medium of exchange and I honestly doubt it ever will.

The whole "currency" label fucks up the conversation because Bitcoin should really be compared to something more like gold, you don't spend your gold you keep it. A long term appreciating asset that has short term volatility, but nobody cares because on a 20 year time scale you will make money. Why? because bitcoin will turn into a parking mechanism for the global economy and your BTC will effectively be a share of the world's parked money which will grow so long as the economy does.

Deflation may lead to short term stagnation but a truly free currency market should respond to create incentives for people to get their money out of BTC and invest back into the market. We don't have a truly free currency market since things like USD are manipulated constantly to hover around interest and inflation rates that some apes came up with, so when USD experiences deflation it's a problem because humans are pulling levers to create artificial economic conditions instead of the market.

You need a numbers guy?