Post
Topic
Board Bitcoin Discussion
Re: Bitcoin's Dystopian Future
by
Rassah
on 06/01/2014, 21:26:06 UTC
You all miss the point about what deflation really means. Forget the consumer's view where you just spend your precious coins only when absolutely want/have to. Or the prime producers view. Think about it from the merchants view, who has stocked up goods, or the various processors who still wait materials to arive in their processing pipeline and see that time works against them.
Then you all going to go nagging about how shity preorder, prepay is, and that you still have not get what you bought for, and why on earth vendors don't stock goods in advance, heellloooo because of Deflation maybe?

Time to get yourself unbrainwashed about that whole Deflation = Bad!!! thing.

Customers don't wait to buy new things, as evidences with people lining up to buy new gadgets.
When currency deflates, customers feel like they have more disposable cash to spend, and thus increase spending.
Merchants will not be working in a deflationary economy with expectations of being in an inflationary. Just as merchants calculate and adjust prices for the rate of inflation, they will adjust prices for the rate of deflation. Right now you expect the value of what you are asking for to fall, so you adjust prices up with expectation that if they sell in a month, you will earn -3%/12 of the current day value. In deflation, you expect the value of what you are asking to go up, so you adjust prices down with the expectation that you will get +3%/12 at the end of a month. I.e. if inflation or deflation is 1% for a period, and your cost of product is $100, you will price it at $101 in inflationary currency, or $99 in deflationary currency, expecting to get the same $100 value when it sells. Customers will just get used to this too.