Quote from: painlord2k on August 31, 2014, 04:11:07 PM

Quote from: blackhull on August 10, 2014, 06:23:57 PM

Can anybody explain to me why, in an environment in which BTC is expected to appreciate further, anybody would use their BTC to spend?
....

Because as a living being you CAN NOT stop consuming (and spending).
You could delay some consumption, but you can not stop from consuming goods completely.

For example:
You have only BTCs and need to buy food to eat. You could delay consumption for a day, maybe three, but then you will be hungry and the desire to eat will probably be stronger than the desire to profit from a future increase in value of your BTC. Or maybe not and you will die starving. You will probably just use the minimum quantity of BTC you could spend to buy ramen and delay buying Champagne and caviar for the future.

This is an extreme situation, but there is a large number of people with different (often very different) time preferences, so there always be at least a small flow of Bitcoin to be exchange for goods and services or fiat.
If I acquire Bitcoin just to pay for my new tablet, because I can only use Bitcoin if I'm in Ghana and want to pay a shop in the US, my time horizon is very short. If I buy Bitcoins because I want protect my savings from inflation in Argentina, my time horizon is much longer.

This situation would be very unlikely to happen in the real world. I would say that most people that have the ability to acquire bitcoin also have fiat based assets they can spend.

Even in your situation, people will delay consuming for as long as they can because they think the value of bitcoin will increase. This will ultimately lead to lower economic activity because people will delay purchases for as long as they can hold off.

The reason that the level of bitcoin economic activity is where it is now is because some people do not think the price will always rise, but rather there is some chance it may not.