Quote from: BitterTea on March 09, 2011, 04:40:22 PM

Hazek,

Austrian economists have no problem with "hoarding", which they actually call "saving".

See: http://mises.org/money/2s9.asp

I commend you for actually doing some research but unfortunately you're applying the learned knowledge incorrectly. The article speaks about money and not local currencies which is what BitCoins are the most similar to atm.

If BitCoins were the reserve currency and all prices were expressed in BTC I agree with you, hoarding wouldn't have been a problem. But they're not. Prices are in USD and EUR and so forth and you need to first exchange your BTC for one of those fiat currencies before you can buy almost anything. Sure we already have a few services and goods that have it's prices expressed in BTC and those prices may very well fall if the price of BTC doesn't which btw is a function of supply and demand. But then what's the appeal of charging BTC for those services and goods if they could charge USD or EUR or other fiat currencies at a higher price? There isn't one.

So BTC economy will either keep it's exchange price and lower prices for goods and services offered for BTC which will eventually shrink the size of BTC economy or the exchange price will fall and which will raise prices and make the BTC economy more attractive inviting more goods and services in which will then slowly lower prices and this process will repeat until every good and service is priced in BTC after which moment hoarding wont be a problem anymore.

But if at any point along that path hoarders tighten too hard they'll drive goods and services out of this economy and put this process in reverse.