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Board Beginners & Help
Re: what is killing bitcoin by drastically deflating it?
by
aarreeaa
on 01/04/2013, 23:03:55 UTC
I see that most of you are trilled that bitcoin value quickly increases.
And that really is great for those that invest in virtual bit coins and intend to profit by selling (outexchanging) them later.

But bitcoin <-> real money exchanges usually make small (traditionally - ~2%-5%) profit per exchange.
With such deflation (~3-6% per day) exchangers actually lose by selling bitcoin, so fees should go up...

While bitconin's value deflates so fast, its very bad for buying/selling stuff & services.
WHY? The most obvious aspect: More and more people become hesitant to make purchase today and decide to wait few days to get it cheaper - bad for merchants (10-30% of potential sales are lost).