Quote from: BunnyWunny on Today at 06:10:43 PM

If Bitcoin becomes widespread enough that most people hold their savings in it, then it will greatly and permanently reduce liquidity in the financial system, lead to a decrease in consumer spending and cause major ructions in the global economy.

People part with their money easily these days because in the back of their heads they know that what they have in their hand right now, will be worth far less in the future due to inflation. So they spend their money on gratifying goodies now rather than save it for later when, due to a negative real return, it will be worth less. In a Bitcoin world this behavior is reversed. People will understand the resilient and long lasting value of their Bitcoin and not want to part with it unless they are getting something very favourable in return. The psychological hurdle to spending money will be raised in each individual's mind.

This change in the mass consumer psychology that is so important and relevant in the world today will lead to a liquidity crunch. Central banks usually solve the problem of a liquidity crunch by printing money and lending it out cheaply but they won't be able to do this as faith in fiat currencies will already have been so severely degraded by Bitcoin's ascendancy. There will be no answer to people becoming more prudent with how they spend their hard earned bitcoin. It will simply shrink the economy.

In my opinion this will be a good thing as so much of the economic "growth" we see in the world today is a vacuous re-packaging of frivolous fancies to meet imaginary needs fueled by an incentive to spend currency that is always losing value. Things that satisfy a genuine pressing need will continue to be invented, bought and sold and this is all that is necessary for a vibrant healthy economy.

I definitely think that there is huge potential for Bitcoin to shake the fiat debt based system. It already has and it is currently making history right now with certain current events. The only thing we know for certain right now is to HODL! Don’t pull a Germany lol.