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.
People would buy more than just bare essentials because people want things. This doesn’t exist in a vacuum – at this very moment, people are using fiat currency to buy all kinds of things they don’t need instead of investing it in some kind of appreciating asset.
As there’s no intrinsic value to bitcoin
There’s no intrinsic value to fiat currency. I’m not sure why you keep saying this.
People would buy more than just bare essentials because people want things
People would buy less and ecconomies (rightly or wrongly) rely quite a lot on people buying more than they need. There’s a reason economics are scared of deflation. The fear of deflation was why interest rates where so low after the 08 crash and even lower during the pandemic.
Also, other appreciating assets have some use within the wider economy. Shares you’re ingesting in a company that produces goods or services so they can spend that money on growing their business, bonds/guilts you’re enabling the issuer to borrow more to do whatever they need to do with that money (in the case of government bonds think roads, hospitals and bombs).
There’s no intrinsic value to fiat currency.
True. There isn’t to bitcoin either. What fiat has is stability and public confidence. When it looses stability that’s when things are bad.
Bitcoin has proved itself extremely volatile, its about 16 years to become stable and it never has. Because bitcoin coin is so dominant in the crypto market I can’t see any crypo becoming stable while it exists.
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.
People would buy more than just bare essentials because people want things. This doesn’t exist in a vacuum – at this very moment, people are using fiat currency to buy all kinds of things they don’t need instead of investing it in some kind of appreciating asset.
There’s no intrinsic value to fiat currency. I’m not sure why you keep saying this.
People would buy less and ecconomies (rightly or wrongly) rely quite a lot on people buying more than they need. There’s a reason economics are scared of deflation. The fear of deflation was why interest rates where so low after the 08 crash and even lower during the pandemic.
Also, other appreciating assets have some use within the wider economy. Shares you’re ingesting in a company that produces goods or services so they can spend that money on growing their business, bonds/guilts you’re enabling the issuer to borrow more to do whatever they need to do with that money (in the case of government bonds think roads, hospitals and bombs).
True. There isn’t to bitcoin either. What fiat has is stability and public confidence. When it looses stability that’s when things are bad. Bitcoin has proved itself extremely volatile, its about 16 years to become stable and it never has. Because bitcoin coin is so dominant in the crypto market I can’t see any crypo becoming stable while it exists.