Quote from: jmaccoin on July 24, 2013, 02:51:45 PM

The talk of closed btc loops is crazy. It shouldn't matter at all if you buy something with btc if the recipient cashes out immediately or not. If there is enough demand for bitcoins it won't hurt the price, if it drops the price then it means the price was too high.

The Canadian dollar is a strong world currency, sometimes at par with usd, sometimes above, sometimes below. Could you imagine if we had to keep Canadian dollars to keep the value high? We wouldn't have any electronics whatsoever. We wouldn't really have anything.

If trading our Canadian dollars for usd in order to buy pretty much anything caused the price of cad to plummet, we wouldn't have a cad dollar anymore.

We can trade back and forth between cad and other currencies because cad is known as a strong, stable currency and therefore there is always people ready to buy when there are people selling.

The closed loop idea is crazy, look at Argentina.

The closed loop means more people are able to buy everything they need in Bitcoin. If we want bitcoin to work as a currency then we want people to be able to spend it directly, rather then selling it and then using currency.

Also, the price of a national currency like CAD is controlled by the central bank. If the price of CAD starts to go down because people are spending it in the US then the central bank can do things like raise interest rates, and destroy excess currency decreasing the money supply and increasing the price. On the other hand, if the price starts to go up to quickly, the central bank can print more. Central banks print and destroy money in order to keep the price stable.

Bitcoin doesn't have a central bank, it has a fixed supply. So holding it makes the price go up, while spending it rapidly makes the price go down, like with gold.