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Board Economics
Re: Deflation and Bitcoin, the last word on this forum
by
goatpig
on 04/06/2011, 00:49:27 UTC
It's not impossible. Hoarding doesn't mean "nobody exchanges coins". It simply means that in case coins were exchanged, there's a high probability that the buyer is buying for the sole purpose of later profiting. And the seller is selling because he either needs money immediately or he's afraid the price will drop and had enough profit, so he exits the market safely. By the way those two reasons are exactly why I plan to liquidate some of my own coins soon.

This example was to show you, with data to support it, that the behavior you're expecting in a deflationary market just isn't happening.

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I never denied there were real transactions either, but I said there would be more of those if the price was stable. People won't have to worry about spending coins because they're afraid the price would spike soon after they spend them, nor would they worry about a price drop after earning a coin so they won't have to rush and liquidate them.

Why exactly do you want more transactions as the unique result from an economic model as opposed to natural market levels. Are you trying to say people won't buy food, lodging, clothes, transportation, energy and god knows what else because they're on a deflationary currency? If your only goal is to increase transaction volume, regardless of actual wealth changing hands, are you arguing the point that transaction fees aren't enough to maintain high difficulty? You didn't seem to argue that way from your previous posts.

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What exactly is your problem with a stable price system?

Besides that it is unfeasible and no one would use such currency? Nothing. What I don't understand is why you're coming in a thread stating that deflation is a feature of Bitcoin and start arguing against it. If you have something against deflation, I suggest you run your own block chain with your own rules, code is there and all. Also, run your own forums while you're at it.