EDIT: Sorry, wrote this after reading OP without realizing this argument has already been made several times in this thread. 
While talking about gold he mentions that, after the thrill of buying something with a gold-based currency wears off, people rarely use it. Instead they tend to hoard it, keeping it as a store of wealth. A good example of this is http://www.goldmoney.com/ with 1.8 billion in gold, available digitally, that for the most part just sits there as a gold savings account. He then predicts that if bitcoin turns out to be as good as its proponents say it is, it will have the same problem.
Why? Because 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 (i.e. $100 woth of bitcoin is > 100$ fiat).
I think this is an interesting point. Thoughts?
I don't know anything about goldmoney.com, but I do think the bitcoin design gives people reason to spend it rather than just hoard it.
For one thing, if you actually believe that it will generally be going up in value week on week (a good reason to hold on to as much as you can), then you would be wise to put your whole paycheck into bitcoin when you receive it. If you do this, then when you want to spend money at a merchant who accepts both fiat currency and bitcoin, then you will find it far easier to just spend your bitcoins than to transfer them back into fiat currency.
While talking about gold he mentions that, after the thrill of buying something with a gold-based currency wears off, people rarely use it. Instead they tend to hoard it, keeping it as a store of wealth. A good example of this is http://www.goldmoney.com/ with 1.8 billion in gold, available digitally, that for the most part just sits there as a gold savings account. He then predicts that if bitcoin turns out to be as good as its proponents say it is, it will have the same problem.
Why? Because 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 (i.e. $100 woth of bitcoin is > 100$ fiat).
I think this is an interesting point. Thoughts?
I don't know anything about goldmoney.com, but I do think the bitcoin design gives people reason to spend it rather than just hoard it.
For one thing, if you actually believe that it will generally be going up in value week on week (a good reason to hold on to as much as you can), then you would be wise to put your whole paycheck into bitcoin when you receive it. If you do this, then when you want to spend money at a merchant who accepts both fiat currency and bitcoin, then you will find it far easier to just spend your bitcoins than to transfer them back into fiat currency.