Quote from: Wekkel on April 03, 2013, 05:23:21 PM

Eventually, demand and supply will balance. The balance is just a little bit different than with fiat currency, but its unsound reasoning to think that Bitcoin would continue to appreciate to infinity while an economy would shrink because nobody spends. That will simply not happen.

Of course, what will happen is that people currently in charge of fiat money cannot influence a Bitcoin economy that easy. Markets will set the demand and supply, not the beneficiaries of the current system. I'd like to try that new system for a change.

As more and more people reject their own fiat currency and exchange to Bitcoin fiat it seems that infinity is the direction Bitcoin will head. If the world has a 'next' financial crisis then it could be the case, one day, that this apolitical currency may have to absorb the value of all property. I don't know what that number is but it sure lives in infinity's neighborhood.

Infrastructure has a long way to go but I did just see an article in the WSJ regarding CIOs keeping a close eye on Bitcoin. I can only assume that is with regard to transacting business in it. [Suspicious link removed]j.com/story/latest-headlines/SS-2-63399/SS-2-206822/[/url]

I think one important development for liquidity and price discovery would be for a decent trading platform to emerge. As a former futures trader I'd like to see a platform with ability to enter bracketed orders with limits and stops. I suppose that borrowing BTC in order to sell it short should be possible, as well.

With regard to spending in a BTC only world: spending would plummet. Like I posted a day or two ago, imagine that you took a loan one year ago to buy a pizza; you borrowed three Bitcoins. You go to pay it back today and realize that you just paid $630 for that pizza! That is how loans would look in a deflationary world, albeit much tamer than in our last year. The point is that loans would grow larger over time vs our current system that minimizes them over time relative to our currency. As you know inflation encourages spending now and borrowing, deflation encourages the opposite. I think that reasoning is sound. I think that world may even be a better world.