Quote from: toknormal on June 15, 2016, 06:15:46 PM

Quote from: Spaceman_Spiff on June 15, 2016, 06:05:59 PM

Why would someone buy USD when BTC is ubiquitously used in the future, because they want their currency to depreciate to gain stability? That makes no sense

It does make sense. They would buy USD because they need it to faciliate trade of goods and services which are denominated in that currency. It doesn't depreciate fast enough to inhibit its use for trade. Any longer term holdings are invested so they don't lose value. Thats just how the world works - look back in history of 100 years. The $USD has depreciated massively - about 98% or something, yet it didn't inhibit the most monumental period of growth the world has seen in its existence.

It's right that fiat currencies should depreciate in value over time because their primary purpose is to facilitate trade and keep prices stable, not to store value (in the long term that is, obviously they need to be stable enough to store value in the short term).

Quote from: Spaceman_Spiff on June 15, 2016, 06:05:59 PM

Bitcoin will be stable (non-volatile) enough for commerce.

It won't be. It's academic. No fixed supply currency can be unless you have an economy that doesn't expand or contract in size. Also, if it was stable it wouldnt be doing its job. Many commentators criticise bitcoin for its volatility but it's that very volatility which indicates that it's successfully reflecting the balance of supply and demand for liquidity.

I'll admit that you seem to know more about modern economics than I do, but I disagree with you.
The reason gold isn't used as a transaction medium is because it is too damn inconvenient compared to fiat, so people are willing to hold a slowly depreciating currency because it was more convenient than gold. In a bitcoin world, bitcoin would be just as convenient to transact with as fiat, so there is no incentive for the individual not to hold all his money in bitcoin. Neither do businesses have a reason to ask to be paid in a depreciating currency. In a world where bitcoin would be the only currency, it would not be volatile but slowly gain in value equal to productivity increase + percentage of coins lost per year, lets call it 3 percent per year. Any business model that has a profit below that percentage (compared to btc value of the previous year) would not be executed due to opportunity cost (better to stay in btc then). Might not be ideal for economic growth, but I fail to see why people would act differently. You seem to reason from the economic systems perspective, but it is people and their decisions that make up the economy.