Quote from: jgm on April 09, 2013, 01:27:49 PM

Quote from: Billy3 on April 09, 2013, 01:07:24 PM

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.

No, because in a BTC only world you wouldn't be continually linking your BTC back to the price of the USD, as people do nowadays. *That* is the true shift which needs to occur, and that is when Bitcoin will start to be truly interesting.

While that is true, you would be paying a 'one pizza loan' back with the number of Bitcoins that would now buy 60 pizzas. It is the same deal as if you were doing dollar conversions. A mortgage, 10 years later, will be the amount of BTC that could now buy two of the very same home you borrowed for. See how borrowing is just a bad deal with deflation? People would start living within their means and spending/GDP would plummet. The current power structure would be upended (financially speaking) and a new system of economics/commerce would emerge.