Quote from: flug on July 02, 2011, 10:10:53 PM

Quote from: BubbleBoy on July 02, 2011, 10:00:57 PM

If an asset is expected to rise, people will hoard it given the choice. It's only human to aim for realizing the gains of your most productive assets.

If you convert all of your currency into bitcoin, hunger will force you to spend them, no?

precisely.

while the OP notes that:

Quote

...if a merchant accepts both Bitcoin and Fiat currency people will always prefer to pay with fiat currency simply because the equivalent bitcoin is seen to be more valuable.

...he neglects that which has the most impact on that calculation: what can one afford?

in my line - rare books - this is a common question, with a simple answer. if one buys a group of rare books - from an estate, for example - one is left with the question of how to sell them, and there are really only two choices.

1. sell the very best books first - they will sell more quickly and for more money. you will get your investment back sooner, pay your bills, and take your profit from the crappy books afterwards. the problem here is that you are depending on profits from merchandise of lesser quality - it frequently doesn't work out that way, and you're stuck with crap. or,

2. sell the crappy books first. it'll take longer, and you'll have to find some way to eat and pay the rent until they sell - but when you're done with those you'll have the very best stuff to sell, which should give you your profits in larger sums (always good). the drawback here is the vagaries of the market; books tend to fluctuate in value, as most luxuries do.

so the answer here is the same: what can you afford?

Postulate: as the economy of the world deteriorates, Bitcoin will do better as a medium of exchange and become less of a value store or speculative medium.