About a year ago I purchased a small number of Bitcoins, which, in theory I could sell for several times what I paid for them, but I don't want to because there value (relative to other currencies anyway) might go up. At least that's what my flawed monkey brain tells me.
The question is this, if everybody is thinking like me, won't that mean the value will keep going up as more and more people hoard bitcoin?
Won't this mean Bitcoin is more like gold ( a store of value ) than a genuine currency ?
Hypothetical situation:
A week ago I received a small amount of USD in my salary, which in theory I could spend on the things I want to purchase, but I don't because bitcoin value (relative to those USD anyway) might go up. At least that's what my flawed monkey brain tells me.
The question is this: If everyone is thinking like me, won't that mean that the value of the USD will keep dropping as more and more people exchange their USD for bitcoin?The point of this demonstration is to show that choosing to spend USD isn't any better than choosing to spend bitcoin. Every USD that you spend could have been converted into some value of bitcoin instead if you hadn't spent it. Spending USD therefore has the exact same effect on your ability to hoard bitcoin as spending bitcoin. Seeing as there are things I need for survival as well as things I desire for pleasure, it is obvious that I am going to spend. Knowing that spending USD provides no benefit over spending bitcoin makes it easy for me to spend my bitcoin when I decide to make a purchase (especially when the bitcoin purchase carries a lower immediate cost or higher immediate convenience).