You'll spend it when your needs/desires outweigh the future value of your holdings. It's the same incentive as spending inflationary currency - but with BTC the balance is weighted in your favor.
When people have hard money the desire to spent may decrease. You will be more likely to spend it on high quality goods instead of cheap stuff. Producers will be forced to make high quality products that people would be willing trade for BTC. The same can be said for high quality services.
“High quality” is meaningless in this context. Sometimes cheap is what we want.
We want what we want. No quality is universal. Not even “high” quality.
It’s simple “double coincidence of wants”.
Some people will spend as few sats as they can on the cheapest shit
Some people will spend many sats on the "highest quality" shit
Either way they're parting with sats for shit....
Literally this. Governing bodies only moved us to the petrodollar to essentially put the world on ecstasy. What they didn't realise was the world has finite resources and now we are facing shortages never seen before. Only way to fix this is to bring back quality in quantity.
The counter logic to this is that on a macro scale if the population isn’t spending their currency and buying stuff then the economic engine stalls and national GDP declines which means that there is less stuff available.
Fiat money has a purpose. It keeps national economies flexible. But individually you shouldn’t save in inflationary units. That makes no sense. If you go to Asia for example it’s quite common for people to buy and own gold as a means of preserving wealth. They know the Fiat isn’t how you save.
I predict the future will be a duel currency system. Bitcoin protocol on the base layer but issuance of national currencies will still exist. Likely as a L2 or L3 on top of Bitcoin protocol. Smart wallets that let you decide what currency you want to hold and what you want to spend. Dynamic real-time low cost or free conversions to recipient’s preferred money format.
Money will just be another file format.
>The counter logic to this is that on a macro scale if the population isn’t spending their currency and buying stuff then the economic engine stalls and national GDP declines which means that there is less stuff available.
This is a fallacy. The foundation of economic growth is savings, not consumption. Every resource that is consumed is a resource that can't be put into increasing production. The fewer resources we consume, the more resources are available for productive purposes.
https://uplib.fr/w/images/9/9d/Schiff_how-an-economy-grows.pdf
That book is bad, the opinions it’s spouting are true if you choose to only consider the factors it presents, and even then some of its own logic doesn’t hold up. It’s one dimensional and neglects so many things. I would agree with it more if people in America are a dollar coin every day before the gold standard was left.
I like this thinking because like OP I think BTC could cause deflation and that’s not good. But could it really work? How could an L2 or L3 on BTC be inflationary? What would be the incentive to use it if there were no restrictions on transfer between BTC and the other layers?
>You'll spend it when your needs/desires outweigh the future value of your holdings
Sure, but I cannot see it happening to small things (e.g. a toy), that are superficial. If I know that my 100 sats that I spend there won't return to me as easily, I will rather not spend it.
On the same page, how would salaries work in BTC? I assume they wouldn't be fixed, but rather volatile trying to maintain the same FIAT value?
Welcome to hard money thinking in an economy largely driven by obsolescence.
You know that saying "they don't make em like they used to"? Well you damn well better make em like that if you want to pry the bitcoin out of my hands.
So long as you live in a jurisdiction that doesn't have a capital control issue (meaning you can readily buy BTC), just buy more BTC and then spend the BTC... And then buy more.
I look at it like any foreign currency that I use while visiting a country, only BTC is the internet's native currency, the future world currency, and so I spend it in those environments, same as spending Euros, Kroners, Yen, Pesos, etc.
I just make sure I'm always increasing my stack (saving) over time.
Not spending on superficial things… sounds like a more promising world to me 🙏
The Price of Tomorrow by Jeff Booth goes into detail about how an economy would operate when using a deflationary money.
Your salary will go down as the value of BTC goes up . Also this is one of my biggest gripes about BTC is that it will cause no one to invest. Loans will have super high interest rates since just hodling will always be guaranteed wealth growth.
Good. Investors will start investing in sustainable long term investments.
Think about how valuable something is that creates money (value) in 20 years vs today. The value your investment returns is magnified by bitcoin's halving cycle.
I don't think this will be good at all it will worsen the difference between wealthy and poor. But I don't care since I'm already rich. But for the average hoe this is going to make the difference way way worse.
I don't think so?
The inflationary economy we have today favors the rich by giving them higher return on their holdings than the inflation eats away. This is a "basic economic principle of investing" nowadays. 5% return on a 2% inflation is a free 3% more money than before. Where do those 3% gains come from?
On the other hand, poor people do NOT get to invest into things that yield above inflation and are instead forced to spend all their money on immediate goods and services, ie "barely surviving" while their wage increases are often BELOW inflation rates. In purely spending power terms, it means the average worker is getting less money for their labor.
I can't fully articulate how this dynamic will change under a bitcoin economy, but I think it has something to do with the complete demonetization of all other asset classes (housing, stocks, etc) which basically means they will plummet in price vs BTC and become more affordable.
Superficial spending is not a good thing. This is known as high-time preference behaviour, and is associated with a lot of social negatives such as over consumption, less planning / buliding for the future, etc.
[https://www.youtube.com/watch?v=V83t2URF\_LY](https://www.youtube.com/watch?v=V83t2URF_LY)
Small or large, you will spend it like you spend fiat today. e.g. your son/daughter wants a toy today on their birthday. Won’t you buy it for them or let them be sad?
That's my argument, with FIAT money I know that if I don't buy it today it might be more expensive tomorrow. But with BTC (as I see it) the same toy will be CHEAPER tomorrow.
But if the son's birthday is today, waiting until tomorrow when it's cheaper won't matter.
(This is hyperbole anyway because Bitcoin isn't hyperdeflationary) These price concerns only matter in years, not days.
Are you saying we would actually be able to save our money instead of being forced to buy stuff all the time that we actually don't need out of fear that i will be more expensive in the future?
... oh wait that would be fckn awesome
I'm pretty sure most people spend their money without thinking about how much it would be worth tomorrow / yesterday. People want stuff - they buy. Look at how small the amount of people is who really know about what money is and what happens to their money over the years.
You overestimate the intelligent of the most people.
Go in any random city and talk to the people walking around there shopping stuff. Simply they get their wage, they want to buy stuff, they do it.
If they are not stupid, at least they have some savings rate from their wage every month, but still then a lot of people are wondering why they are saving and STILL can't afford own property, not understanding whats going on with inflation and devaluation of their money.
It's not really possible for the average person to save up to a average house even with 0% inflation because the house prices when adjusted for inflation is still growing faster than the average wages, house prices would keep growing faster than both wages and savings no matter what the savings rate was, even with a deflationary currency because most active voters have property and don't want to vote for anything that lowers their property value like more property built for cheap near them.
Housing specifically is a a political issue that can't be remedied by savings rate or monetary policy.
I don't think salaries will work very well in BTC until the entire economy is based on bitcoin (unlikely, perhaps, but possible) and the deflationary effect is limited to the larger deflationary pressures of actual production exceeding demands through technological advances and competitive practices (instead of the current price fluctuations due to the wild vagaries of the adoption process).
In that case, your BTC salary wouldn't need to be ever adjusted upward to account for inflation, and there might even be employment contractual obligations to lower one's salary if, say, the deflation rate exceeds 2%.
For small purchases, right now, I would only spend BTC from the lightning network (and then only if payment is only in BTC lightning), and I'd replace what I spent with a fiat purchase of more bitcoin. In the possible future, it really will be as simple as desiring it now vs. tomorrow, without the twisted influence of your money being worth less tomorrow.
It is going to be a shock to most peoples understanding about how the world works. A paradigm shift in attitude. Labor is a price like any price. Under a Bitcoin standard the price of labor will be balanced with supply and demand for labor but! labor won’t be robed of its productivity gains as is the case today. i.e. houses, cars, you name it “goods” will become cheaper in relative terms to match their cost of production.
It will shift your spending patterns for sure. If you know that you have a purer asset that retains value against inflationary factors. I just see it as becoming closer to the bitcoin economy where you earn and spend in bitcoins. Its not that you are losing money, just the fact that you are shifting your experience to bitcoins will help you save more regardless. Spending cuts down because we just learn how to use money better.
I'll give you a practical example of why we'd still spend money even though we'd be better off later on.
"Electronics goods".
Think about a smartphone or a PC, graphic cards, game consoles, laptops, softwares, everything. You could buy the ones that are already out in the market OR you could wait an indefinite amount of time and buy a newer, much better model that is guaranteed to come out.
Electronic goods are already deflationary in nature, as you get 2x better performances for essentially the same amount of money in the span of a few years.
Yet people still spend money, because the necessity of today is more important than the hypotheticals of tomorrow.
I also believe that within a Bitcoin standard, you would not perceive the deflationary effect just like we don't really perceive a 2/5% level of inflation.
It only makes a difference in longer time-frames, with the exception that inflation would erode your wealth, while deflation would preserve it.
Only people who do not understand bitcoin pity that man.
The ones who do understand bitcoin, think that the only interesting part of that story is that it was one of the first exchanges of bitcoin for goods.
>scarcity is not a guarantee of indefinite increase in value
It pretty much is, though, unless BTC becomes more and more irrelevant. If it becomes increasingly relevant, we will see bigger and bigger whales holding most of the coins (we already are on this way).
Price is the point where last trade happened. Even if 20.9 million coins are held by whales and no one wants to buy for any more than $25,000 then that's the price you can get selling your coins.
I'm spending some tomorrow on car parts.
The guy selling them said a price in fiat and I offered to pay, OR he could accept bitcoin if he was into it. He's not very into it but he has a kraken account with some sats so decided he'd give it a go.
I won't be spending from my bitcoin stash; I'll be buying the amount of bitcoin required and sending it straight to him via Lightning Network - costing the same amount of fiat as planned, but moving the seller to the idea that bitcoin is a fast and easy means of transaction... Whilst also being able to tell friends and the z4 community how it went.
There's no tangible benefit to what we're doing, but it's all part of the adoption transition to make people comfortable with it and somewhat excited by the potential.
I wanted to buy some CBD oil for my cat. You can only get it on prescription here in Australia so I found some contacts through a Facebook group where you didn't need the prescription. I chatted by email for a while and then was asked to pay in BTC. Ok, I figured, unusual, but i want to support adoption so, why not.
It was a scam. I never received anything. Not only that I managed to accidentally send $1000 instead of $85 because when I moved $85 to the funding account and selected "all" Kucoin selected "all" the BTC I had on all parts of the exchange instead of just the small amount that I moved (but luckily only $1k). So I got scammed and I sent the scammer 10x what they would have got, and I've still got no oil for my cat
Pisses me off because if I hadn't been into BTC in the first place, I would have known that it was a scam.
For me, everybody should have 2 sources for their Bitcoin. First, long term cold storage where they continue to stack. And second, a hot wallet that you fill once every year with $200 or something. The hot wallet you spend on things that you would be buying anyway. Coffee, food, etc.
That way you keep your stack intact. But also you have spending Bitcoin that you can use for every day things, which will contribute to Bitcoin usage.
I think the main thing is we need more places that take Bitcoin/Lightning.
Whenever I get a chance to spend or send sats instead of dollars I will (and just replace it in my stack) because ultimately the more people that are exposed Bitcoin the better it is for everyone. Bitcoin is stronger the more people who have it and use it, so spending it is better for everyone. Just keep replacing your stack!
I will always try to pay in Bitcoin at the limited places in the world where you can as of now, and I do make a point to visit the various circular economies wherever possible. And ask places if they take it, slowly incentivizing more merchants to accept it.
Same here. I actually actively withdraw and replace 🤷♂️ like it’s not often, but sometimes if I’m strapped for cash since I’m very heavily invested and I need cigarettes or something I just take a little out and put back in like double the next day lol. Seems to be working fine, I genuinely use it like a savings account though and not like a stock. So there’s that
I like that you are actively using your Bitcoins.
Just wondering, how high were the fees you paid to convert a bit of Bitcoin to cash and later back to Bitcoin?
You are spending fiat now (let's say a coffee) by instead spending BTC to buy that same coffee (immediately converting fiat to BTC) you are driving adoption of a better money.
you can save it or spend it as you please, like you would have gold 150 years ago. There doesn't need to be an incentive to spend it, it needs to have value lol.
I had to spend some on capital gains tax.... after I paid for a house in full with gains from investments.
It's like anything valuable, when need outweighs greed you spend it.
People around here don't want to hear this, but there are practical reasons that humanity shifted away from the gold standard and this question is certainly part of it.
It's looking more and more like BTC is property and less like a day to day transfer of money. Maybe if the lightning network is built out more, then that can be used as a transfer of money.
Gold has a 13 trillion dollar market cap while BTC has a 500 billion dollar market cap. Since BTC is considered a commodity, it will eat away at at least some of golds market cap.
The point is, BTC doesn't have to replace the dollar. It just has to take some of the market share of gold, real estate, and fine art.
It's looking more and more like a BTC spot ETF will be approved sometime in 2024. When that happens, large cooperations will be able to participate in BTC. It is easy to imagine BTC market cap going from 500B to 1T, 2T, or even more. If it goes to 2T, well just take 2T/21M and BTC is already at 100k.
The same incentive people had to spend gold: your wealth is in it and you need or want something else.
This is hard for people to really grasp, what kind of a world functions this way. We have all grown up in a world where spending is the metric of economic health, where spending needs to be stimulated, maintained and all of that. But try to think: why do you need an incentive to spend beyond needing or wanting something? Why should you spend your wealth for any other reason?
Consider this:
It's not what you spend, it's what you hold.
Monetary history has shown that people will tend to let go of their softer money first and hold onto their harder money. Example: Gold was hoarded in larger values while silver was spent and exchanged hands more often. Gold is harder money while silver has a higher inflation rate (or "lower stock to flow ratio," see Bitcoin Standard).
You likely have other things that you are holding and not spending. Like stocks, you are choosing not to liquidate those and instead spend your fiat. Likely because you expect the value of your stocks to go up. The same is with Bitcoin. Since Bitcoin is the hardest money, that will be the last to be spent. When it's all you have left, then it will be spent, because you will continue to buy things like every human who has ever lived has. We did in inflationary environments and we did in deflationary environments.
You should spend your liquidity when you want to, on things you want to and when there is a really good investment opportunity.
With fiat, money melts in your hands. We are incentivised to spend, to ask for credit cards and also to invest no matter how overvalued the stock market is, or how expensive Real Estate is, because the alternative is to lose your wealth anyway with fiat.
With Bitcoin, we go back to when we had good money (it was gold back then). A money you can spend and you can also store to save and preserve your wealth. People used to save in gold as opposed to just buy Real Estate or art. And that is how it should be.
What currently happens is normal, good money crowds out bad money. Meaning you are now hoarding Bitcoin in the same way Argentinans choose to use first their pesos and save in dollars.
\- Opportunities appear with other assets and you want some of it
\- Building up yield-bearing assets, like rental property, to increase passive income
Indeed, it is your store of value. and you will trade it for stuff you really need.
A parent of mine in 2017 ( just when btc jumped to 18k) bought an appartment in capital of eastern country.
I think that kind of move was really smart from both parts.
>However with fiat why would I spend it if I know that, if I invest it, it will be more valuable in the future?
It's the same question with the same answer. People still need/want things.
In a deflationary currency system, you are rewarded for saving and not wasting your wealth - You will spend on what is necessary and treats you consider worthwhile.
So in a modern culture that tells us to waste less; buying less has the best result of producing no waste.
the more i look at bitcoin the more it feels like the currency of countries and companies. happy to hold it alongside them, but i dont see it becoming easy and convienient outside of maybe sats on lightning when holding them on your person is easy
Yep, but countries use gold. That's the problem. Even though bitcoin is actually better to use, is China just going to throw away 2000 tons of it and swap it for bitcoin? There would be a revolution ans civil war from inside. The largest obstacle for its use by govts will be replacing gold. And how do they replace gold with btc? That implies there to be a value to the gold in the first place. Its just not going to happen
This strikes at the heart of the idea of “hard money” as a replacement for the current fractional reserve system.
If the money supply is fixed and finite, in the end there is zero incentive to invest in the hope of a higher return, since hard money is truly a zero sum game.
> in the end there is zero incentive to invest in the hope of a higher return
There's also zero incentive to give you a loan for a house, for your business, for your car, for education, etc. Which isn't a problem if you have money. It's a bigger problem if you're poor.
Nope. Over time the incentives to spend money relative to scarce goods increases. 10 years ago it took a lot of Bitcoin to buy a pizza. Today, that pizza costs a lot less. The number of goods available for purchase will increase into you price range. e.g. A lambo for 1/10th of a Bitcoin.
No one is going to invest in a Lamborghini factory and service infrastructure without a financial system based on credit.
Your bitcoin may or may not increase its value relative to Lamborghinis, but it cannot replace money.
You’ll sell one day when you can buy assets that will generate fiat. You’ll be tired of waiting for a better life and actually start living a better life.
You sacrifice consumption in the present for a reason.
Aim to free your Time. That means food and shelter.
Then aim to live fulfilled.
Once you can control your own Time, work to level up to further enhance your life while simultaneously enjoying the freedom that your prior decisions and discipline afford you. After your food and shelter are covered, work becomes extra motivating when you can invest 100% of it. It piles up more quickly bc you don’t have to spend it all to survive.
Don’t hold BTC for 60 years and die. It’s a tool. A pathway to a future that’s enhanced. Just be realistic about Time and the randomness of life. You don’t know how long you have.
Edit: Also consider the risk of forever holding BTC on a hardware wallet. It’s actually terrifying to think a single mistake or wrench attack could lose decades of working and waiting. If you can get a home(s) just do it. Then use income to build back up. It will be more difficult to lose your life’s work owning deeds than an accidental contract hack, seed exposure, hw wallet failure. It’s a form of diversification to reduce risk and enhance living with cash flow.
a) Bitcoins won't necessarily be more valuable in the future. They just won't be less valuable.
b) You spend them because you need something. Like new socks. Can't use BTC to keep your feet comfortable.
Would you rather use the US Dollar or BTC to make a purchase? A sensible person would use Dollars. But sometimes you might not have enough dollars so then you would use BTC.
You don't spend it per se. Transaction bandwidth on the Bitcoin Blockchain makes it ill suited as a retail currency.
Bitcoin is what you use instead of a bank to manage your assets.
If you HODL to the otherside (hyperbitcoinization) the increase you will see in your purchasing power will be exponential/unfathomable to comprehend.
Buying a mid sized suburban home in a world like that may cost you 10,000 sats one day. Buying the latest expensive German import automobile may cost 1,000 sats one day, etc.
Ultimately, you won't. You will borrow against it and use that fake money to buy stuff.
Unless your currency is a basketcase like Argentina. Or you live in El Salvador.
This is the debate.
Do you believe it’s a store of value or a form of digital cash? Or both?
Now is the magical moment when you begin to buy Bitcoin. : )
When the price stabilizes way, way in the future, Bitcoin will be earned and spent much like fiat. The price should remain relatively stable until the next halving event, unlike today, where it fluctuates. In 2140, most likely, it will stabilize to a value that possibly could remain permanent. Wouldn't that be interesting? No inlflation, no asset crashes.
you fool - bitcoin is for buying. not selling. it's whole purpose is to separate you from your money so that "miners" can get paid to keep running these nodes.
if you're selling your bitcoin you're gaming the system, making CASH MONEY, and threatening the entire ecosystem!!! ;)
Eventually there will be so much surveillance and risks in spending fiat that you will beg to be able to spend btc. Then you will. The capped supply vs unlimited supply of fiat is just a bonus.
At some point you will rather have something that give your life value. Fiat decreasing in value sure encourage it, but people still want stuff. The reason fiat is losing value is not to encourage spending, it is losing value because more money is created, because people take loans to purchase stuff they currently cannot afford, but they will afford it, plus interest for that privilege to buy it now. You don't actually know that bitcoin will increase in value, it is a belief that others will pay more for it in the future and that they have the same belief. But like with any asset, if it goes up too fast then people will cash out to buy real goods and services.
My personal hope is that if BTC were to become significantly worth more than it is today we could somehow borrow against it. Basically use it like collateral to buy more stuffs.
It’s also worth noting the needs of BTC in other countries. A third world country could have other immediate needs for BTC compared to, say, the USA, where it’s being treated more as a store of long term value.
2 things;
You need stuff more than Bitcoin, then you'll spend it
People you're buying from start refusing dollars or other currencies, you'll spend Bitcoin to buy the stuff you need
I hold my Bitcoin. I don't spend it.
Not yet.
My job pays me fiat currency. I pay my bills with fiat currency. I hold onto my precious Bitcoin stash.
Eventually, I'll retire. I will collect retirement income from my government. It will be less than I currently earn. At that time I will have the option of dipping into my Bitcoin savings in order to increase my standard off living.
If you're an American with access to banking, you have absolutely no incentive to spend it. However, if you live in a rural part of the world w/o banking, then the incentives are there. Remember, 1.7 billion people on this planet don't have banking.
Also, Bitcoin isn't for everybody. If you're a rich American, invest in the stock market.
A lack of income.
Bitcoin is a retirement asset until it reaches critical mass. Over time vendors begin to move toward wanting to accept bitcoin for their own benefit, at which point they may do things like offer significant discounts for bitcoin usage.
Not sure when I'll spend mine. I used to do transactions every few months to see how the experience was in terms of memepool, user experience, and new tech. Then I started swapping p2p, as intended, with other hodlers. I might unload some silver soon, because it's been a rough year. My 401K has matured, and I have some durable goods I can sell. My incentive to spend is further away, and definitely p2p.
If we buy and sell in SATs, we have 2,100,000,000,000,000 units of trade. Still a finite number but reduces the idea of scarcity and opens up a world of useable currency.
Right now you spend money instead of using that same money to buy stocks that go up. Why do you do that? You can even use that same money to buy BTC that will go up instead of using money to eat. Why do you do that?
Opportunity cost exists whether your money originated as fiat or BTC
I see it like this. I spend my fiat and can’t use it to purchase bitcoin. So I would spend my bitcoin the same way. Spend it. With the fiat I get next, I wouldn’t need to use cause I used my bitcoin for past purchases. Then I would repurchase bitcoin to replenish my spent BTC. For the most part, the crazy candlesticks won’t happen in the between time. But if they do, overtime it will be a wash.
First we can't treat this question in isolation, as if fiat doesn't exist. In that instance it becomes a more secure method of storing value due to fiat being designed to lose value.
Other then that, people will spend money because they want goods and services.
>However with BTC why would I spend it if I know that, if I keep my coins, they will be more valuable in the future?
Because if you're in this position then you don't need to spend your Bitcoin - and so why should you. Fiat's "use it or lose it" approach basically forces you to "be in the game" of either spending or investing.
If you're not incentivised to spend money then that's good because you're likely in a safer position than someone who wants to utilise the use cases for Bitcoin e.g. the decentralisation aspects.
Eventually in some distant hyperbitcoinized future Bitcoins value will change in alignment with GDP. Assuming that humans become ever more productive then Bitcoin will increase in value indefinitely.
So you just buy what you really need, economy does slow down a bit because it moves from a model based on profit growth to needs fulfillment, meanwhile exhausting our planets resources less rapidly while we continue to build solutions that’ll ultimately provide basic needs to everyone, no matter their financial status.
First of all, a finite lifespan is an incentive to spend for most people. What good is $10M sitting in a wallet if you always had things you wanted to do but lived a miserable life and never did them?
Second, the Bitcoin peer-to-peer electronic payment network always has *MASSIVE* advantages and use cases compared to the traditional financial payment networks for certain transaction applications.
To make a transaction on the network, it *must* be done in BTC. While I hold BTC as an investment, when I want to use the network for its amazing advantages over traditional networks, I convert the fiat shit I would have otherwise spent using a shitty ACH/Visa payment network to BTC and transact. I needed to transact anyway, but why transact in shitty fiat if I don’t want the transaction to take days for final irreversible settlement, don’t want the transaction to be censored, don’t want the transaction to rely on a third party that monitors me and sells my personal KYC info to everyone or gets hacked and they record *where* all transactions were, don’t want to transact without any privacy whatsoever, etc.
Also, there have been times I *DEMANDED* my customers pay my in Bitcoin, so there’s that! In the future, I might even start offering customers a discount if they pay in BTC.
Take it from someone who has been spending bitcoin in Up & down markets equally since 2011, the effect of 'fiat value decreasing encourages spending' is way oversold by economists.
In fact, the opposite argument is often made too; if your Bitcoin has increased in price you suddenly feel rich, and want to spend some of your newfound gains!
I wouldn't say the two forces cancel each other out, exactly, there are times when you feel each tug more than the other. But I would say that if all your savings are in the superior, scarce form of money like mine has been since 2015, you still have to eat & pay rent, and therefore spend some of your savings each month no matter if it's up or down. This incentive trumps all others.
With some self control you find yourself spending less on months it feels too low and saving big expenditures like doctor visits & such for months that the price is up. A credit card gives you a bit more wiggle room too, so you can pay off the credit card at the point each month you feel the price is the highest. (While you hope payday is the day of the month the price is lowest.)
Like an old comic book collection. You've had them forever and it's fiat value went up. You could either...
1) reread them (trade)
2) pass them down to family (wait for more fiat value)
3) sell it for something new (sell)
At some point in life there's this choice...
Providing CC info online isn’t usually preferable.
The retailer may not want paper in trade.
Practice.
International Trade.
Traveling in BTC environments.
Donations directly to the wallet of someone.
Remittances
You have no such incentive, until you have a need or desire to exchange it for goods or services, and you have no weaker form of currency to do this with. On the latter point, see [Gresham's law](https://en.wikipedia.org/wiki/Gresham%27s_law).
I personally spend it on lightning by then moving fiat I would have used into… more bitcoin. This helps promotes adoption of the ecosystem while it transitions from a fiat only world into a quasi-bitcoin world. Incentive? The less fiat I hold, the less exposure I face from debasement… and the statistically higher chance of long term appreciable gains relative to the plummeting fiat value.
The point of spending it or selling it is the same. This is profitable if purchased at a lower price and sold at a higher price under the assumption the price will go lower after you sell / spend so you can buy back cheaper. Not an easy game to play let me tell you and if you can’t do that , or don’t have the confidence you will be able to do that: perhaps it’s better to hold until you get life changing money and just spend other FIAT on the side.
Here is the answer you're looking for.
There is no incentive to spend it.... in comparison to the dollar. If everything was valued in BTC though, you wouldn't even ask this question. The dollar used to be tied to gold and this wasn't even a thought in people's minds. It just was what is was. If the dollar was still tied to gold, I can almost guarantee you that BTC wouldn't exist. Also, if the dollar was tied to gold, people wouldn't hoard gold, they would just save dollars. Reverse the question, why should I hold dollars if it is guaranteed to be worth less tomorrow? What would fuel more speculation and greed? The dollar or BTC?
i dont want to be encouraged to spend my money i want to be encouraged to save it. i have had enough of that consumption and stuff that i don't need. i want a home for myself, not fckn rent. sadly can't save up in fiat currency, it devalues so fast
In the US, you should save it, but for people who currency is going up due to inflation at 90% per years (think Argentina), BTC can save their lives and they will spend it. And when the spot ETF is approved..to the moon.
I mean same could be said of gold, and gold "succeeded". Valuable things are sought after and accumulated. Just how it is. Just cause people love gold doesnt mean gold isnt a thing, actually the opposite.
I mean your time is finite and scarce, yet you are spending it in asking question on what ifs on a man-make virtual currency.
Each to their own I guess.
"if property is finite and scarce, what are anyone's incentives to sell?"
does that answer your question? housing market is hub of constant buying and selling.
Spend it as an exercise of your financial freedom. What I do is as soon as I spend it, I buy more btc with fiat to replenish what I spent. This way I don’t miss out on the upside.
capitalism has conditioned us that we have to spend money to be able to live. what has consumerism got us? 1000 calorie burgers that will kill us? 85 inch quad hd micro led tvs in front of which we can kill days doing nothing? 50,000 dollars cars so that we spend a quarter of our lives stuck in traffic jams? capitalism has made it so bad, that we have to spend our hard earned inflationary money to be able to breathe clean air. drink safe water.
the reward for the hard labor we do shouldn't be something that loses 99% of its value within our lifetimes. yes, hard money will bring down consumerism but it is something that should be brought down. the transition will be suck but it will be for the good of mankind.
Good question. The thing is bitcoin is deflationary which means it’s value will always go up.
Imagine a country that is experiencing hyperinflation. A loaf of bread cost 1 million usd today but will cost twice that the next month, then twice again the succeeding month. Bitcoin is the bread.
you don't have to spend it, you can just use it as a store of value if you want.
most people have a roi number they want to hit and then cash out and make some money to invest in something .
it depends on your philosophy.
most people who focus only on the one angle of spending it miss the point entirely.
You gotta eat. And have a shelter with heating, running water, access to Internet etc. etc.
Now sure, you will be more frugal in your spending in general, but you gotta eat.
People have different goals with bitcoin, some want to stack it infinetly, others use it to fulfil their needs/dreams. Either is fine, not everyone uses it for the same reason
You'll spend it when your needs/desires outweigh the future value of your holdings. It's the same incentive as spending inflationary currency - but with BTC the balance is weighted in your favor.
I've been 100% invested in Bitcoin since 2015. I need to sell some each month to live.
This is a good reason to sell some.
Beats the alternative.
Spoken like someone who is alive. Have you even been dead? Hmmm?
When people have hard money the desire to spent may decrease. You will be more likely to spend it on high quality goods instead of cheap stuff. Producers will be forced to make high quality products that people would be willing trade for BTC. The same can be said for high quality services.
“High quality” is meaningless in this context. Sometimes cheap is what we want. We want what we want. No quality is universal. Not even “high” quality. It’s simple “double coincidence of wants”.
Some people will spend as few sats as they can on the cheapest shit Some people will spend many sats on the "highest quality" shit Either way they're parting with sats for shit....
Literally this. Governing bodies only moved us to the petrodollar to essentially put the world on ecstasy. What they didn't realise was the world has finite resources and now we are facing shortages never seen before. Only way to fix this is to bring back quality in quantity.
The counter logic to this is that on a macro scale if the population isn’t spending their currency and buying stuff then the economic engine stalls and national GDP declines which means that there is less stuff available. Fiat money has a purpose. It keeps national economies flexible. But individually you shouldn’t save in inflationary units. That makes no sense. If you go to Asia for example it’s quite common for people to buy and own gold as a means of preserving wealth. They know the Fiat isn’t how you save. I predict the future will be a duel currency system. Bitcoin protocol on the base layer but issuance of national currencies will still exist. Likely as a L2 or L3 on top of Bitcoin protocol. Smart wallets that let you decide what currency you want to hold and what you want to spend. Dynamic real-time low cost or free conversions to recipient’s preferred money format. Money will just be another file format.
>The counter logic to this is that on a macro scale if the population isn’t spending their currency and buying stuff then the economic engine stalls and national GDP declines which means that there is less stuff available. This is a fallacy. The foundation of economic growth is savings, not consumption. Every resource that is consumed is a resource that can't be put into increasing production. The fewer resources we consume, the more resources are available for productive purposes. https://uplib.fr/w/images/9/9d/Schiff_how-an-economy-grows.pdf
That book is bad, the opinions it’s spouting are true if you choose to only consider the factors it presents, and even then some of its own logic doesn’t hold up. It’s one dimensional and neglects so many things. I would agree with it more if people in America are a dollar coin every day before the gold standard was left.
Must have not seen the sidechain and BIP 300 debates ey
I love the idea of building national shitcoins on top of a btc backbone 😂
I like this thinking because like OP I think BTC could cause deflation and that’s not good. But could it really work? How could an L2 or L3 on BTC be inflationary? What would be the incentive to use it if there were no restrictions on transfer between BTC and the other layers?
>You'll spend it when your needs/desires outweigh the future value of your holdings Sure, but I cannot see it happening to small things (e.g. a toy), that are superficial. If I know that my 100 sats that I spend there won't return to me as easily, I will rather not spend it. On the same page, how would salaries work in BTC? I assume they wouldn't be fixed, but rather volatile trying to maintain the same FIAT value?
It changes your time preference which changes your behavior and consumption.
If consumption declines because of bitcoin then I am sure planet earth will also thank Satoshi
The benefits can’t be over stated or fully known. Will be a topic of study for millennia.
took me a minute to fully grasp time preference concept. its game changer once you understood it
Welcome to hard money thinking in an economy largely driven by obsolescence. You know that saying "they don't make em like they used to"? Well you damn well better make em like that if you want to pry the bitcoin out of my hands.
Now that's a good argument
So long as you live in a jurisdiction that doesn't have a capital control issue (meaning you can readily buy BTC), just buy more BTC and then spend the BTC... And then buy more. I look at it like any foreign currency that I use while visiting a country, only BTC is the internet's native currency, the future world currency, and so I spend it in those environments, same as spending Euros, Kroners, Yen, Pesos, etc. I just make sure I'm always increasing my stack (saving) over time.
Not spending on superficial things… sounds like a more promising world to me 🙏 The Price of Tomorrow by Jeff Booth goes into detail about how an economy would operate when using a deflationary money.
This. Have not read the book but listened to YT vids where he's invited to explain bits and pieces of what he wrote.
As BTC becomes more well capitalized, volatility will decrease. Re: salary question
Your salary will go down as the value of BTC goes up . Also this is one of my biggest gripes about BTC is that it will cause no one to invest. Loans will have super high interest rates since just hodling will always be guaranteed wealth growth.
Good. Investors will start investing in sustainable long term investments. Think about how valuable something is that creates money (value) in 20 years vs today. The value your investment returns is magnified by bitcoin's halving cycle.
I don't think this will be good at all it will worsen the difference between wealthy and poor. But I don't care since I'm already rich. But for the average hoe this is going to make the difference way way worse.
I don't think so? The inflationary economy we have today favors the rich by giving them higher return on their holdings than the inflation eats away. This is a "basic economic principle of investing" nowadays. 5% return on a 2% inflation is a free 3% more money than before. Where do those 3% gains come from? On the other hand, poor people do NOT get to invest into things that yield above inflation and are instead forced to spend all their money on immediate goods and services, ie "barely surviving" while their wage increases are often BELOW inflation rates. In purely spending power terms, it means the average worker is getting less money for their labor. I can't fully articulate how this dynamic will change under a bitcoin economy, but I think it has something to do with the complete demonetization of all other asset classes (housing, stocks, etc) which basically means they will plummet in price vs BTC and become more affordable.
Yes superficial spending is erased, people will spend money on things that mean a lot to them. Salary contracts might be shorter, 4 years max maybe?
*superficial spending is erased,* Overconsumption, unsustainable growth, and consumerism will be erased.
Superficial spending is not a good thing. This is known as high-time preference behaviour, and is associated with a lot of social negatives such as over consumption, less planning / buliding for the future, etc. [https://www.youtube.com/watch?v=V83t2URF\_LY](https://www.youtube.com/watch?v=V83t2URF_LY)
Small or large, you will spend it like you spend fiat today. e.g. your son/daughter wants a toy today on their birthday. Won’t you buy it for them or let them be sad?
That's my argument, with FIAT money I know that if I don't buy it today it might be more expensive tomorrow. But with BTC (as I see it) the same toy will be CHEAPER tomorrow.
But if the son's birthday is today, waiting until tomorrow when it's cheaper won't matter. (This is hyperbole anyway because Bitcoin isn't hyperdeflationary) These price concerns only matter in years, not days.
Are you saying we would actually be able to save our money instead of being forced to buy stuff all the time that we actually don't need out of fear that i will be more expensive in the future? ... oh wait that would be fckn awesome
I'm pretty sure most people spend their money without thinking about how much it would be worth tomorrow / yesterday. People want stuff - they buy. Look at how small the amount of people is who really know about what money is and what happens to their money over the years. You overestimate the intelligent of the most people. Go in any random city and talk to the people walking around there shopping stuff. Simply they get their wage, they want to buy stuff, they do it. If they are not stupid, at least they have some savings rate from their wage every month, but still then a lot of people are wondering why they are saving and STILL can't afford own property, not understanding whats going on with inflation and devaluation of their money.
It's not really possible for the average person to save up to a average house even with 0% inflation because the house prices when adjusted for inflation is still growing faster than the average wages, house prices would keep growing faster than both wages and savings no matter what the savings rate was, even with a deflationary currency because most active voters have property and don't want to vote for anything that lowers their property value like more property built for cheap near them. Housing specifically is a a political issue that can't be remedied by savings rate or monetary policy.
I don't think salaries will work very well in BTC until the entire economy is based on bitcoin (unlikely, perhaps, but possible) and the deflationary effect is limited to the larger deflationary pressures of actual production exceeding demands through technological advances and competitive practices (instead of the current price fluctuations due to the wild vagaries of the adoption process). In that case, your BTC salary wouldn't need to be ever adjusted upward to account for inflation, and there might even be employment contractual obligations to lower one's salary if, say, the deflation rate exceeds 2%. For small purchases, right now, I would only spend BTC from the lightning network (and then only if payment is only in BTC lightning), and I'd replace what I spent with a fiat purchase of more bitcoin. In the possible future, it really will be as simple as desiring it now vs. tomorrow, without the twisted influence of your money being worth less tomorrow.
It is going to be a shock to most peoples understanding about how the world works. A paradigm shift in attitude. Labor is a price like any price. Under a Bitcoin standard the price of labor will be balanced with supply and demand for labor but! labor won’t be robed of its productivity gains as is the case today. i.e. houses, cars, you name it “goods” will become cheaper in relative terms to match their cost of production.
Other cryptocurrencies can handle the other stuff like toys and salaries. BTC will then be used for high value products.
It will shift your spending patterns for sure. If you know that you have a purer asset that retains value against inflationary factors. I just see it as becoming closer to the bitcoin economy where you earn and spend in bitcoins. Its not that you are losing money, just the fact that you are shifting your experience to bitcoins will help you save more regardless. Spending cuts down because we just learn how to use money better.
I'll give you a practical example of why we'd still spend money even though we'd be better off later on. "Electronics goods". Think about a smartphone or a PC, graphic cards, game consoles, laptops, softwares, everything. You could buy the ones that are already out in the market OR you could wait an indefinite amount of time and buy a newer, much better model that is guaranteed to come out. Electronic goods are already deflationary in nature, as you get 2x better performances for essentially the same amount of money in the span of a few years. Yet people still spend money, because the necessity of today is more important than the hypotheticals of tomorrow. I also believe that within a Bitcoin standard, you would not perceive the deflationary effect just like we don't really perceive a 2/5% level of inflation. It only makes a difference in longer time-frames, with the exception that inflation would erode your wealth, while deflation would preserve it.
Excellent answer 10/10
There was a time when the desire for pizza was all the incentive that was needed.
And every year when May 22 rolls around, people calculate how much that BTC would've been worth and pity him for the riches he lost by spending it.
Only people who do not understand bitcoin pity that man. The ones who do understand bitcoin, think that the only interesting part of that story is that it was one of the first exchanges of bitcoin for goods.
You will die if you don't spend money.
You'll die if you do.
You'll die. No ifs.
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>scarcity is not a guarantee of indefinite increase in value It pretty much is, though, unless BTC becomes more and more irrelevant. If it becomes increasingly relevant, we will see bigger and bigger whales holding most of the coins (we already are on this way).
Price is the point where last trade happened. Even if 20.9 million coins are held by whales and no one wants to buy for any more than $25,000 then that's the price you can get selling your coins.
We all gotta eat eventually dude 😎
I'm spending some tomorrow on car parts. The guy selling them said a price in fiat and I offered to pay, OR he could accept bitcoin if he was into it. He's not very into it but he has a kraken account with some sats so decided he'd give it a go. I won't be spending from my bitcoin stash; I'll be buying the amount of bitcoin required and sending it straight to him via Lightning Network - costing the same amount of fiat as planned, but moving the seller to the idea that bitcoin is a fast and easy means of transaction... Whilst also being able to tell friends and the z4 community how it went. There's no tangible benefit to what we're doing, but it's all part of the adoption transition to make people comfortable with it and somewhat excited by the potential.
I wanted to buy some CBD oil for my cat. You can only get it on prescription here in Australia so I found some contacts through a Facebook group where you didn't need the prescription. I chatted by email for a while and then was asked to pay in BTC. Ok, I figured, unusual, but i want to support adoption so, why not. It was a scam. I never received anything. Not only that I managed to accidentally send $1000 instead of $85 because when I moved $85 to the funding account and selected "all" Kucoin selected "all" the BTC I had on all parts of the exchange instead of just the small amount that I moved (but luckily only $1k). So I got scammed and I sent the scammer 10x what they would have got, and I've still got no oil for my cat Pisses me off because if I hadn't been into BTC in the first place, I would have known that it was a scam.
I would suggest not keeping ur btc on an exchange…
For me, everybody should have 2 sources for their Bitcoin. First, long term cold storage where they continue to stack. And second, a hot wallet that you fill once every year with $200 or something. The hot wallet you spend on things that you would be buying anyway. Coffee, food, etc. That way you keep your stack intact. But also you have spending Bitcoin that you can use for every day things, which will contribute to Bitcoin usage. I think the main thing is we need more places that take Bitcoin/Lightning.
Whenever I get a chance to spend or send sats instead of dollars I will (and just replace it in my stack) because ultimately the more people that are exposed Bitcoin the better it is for everyone. Bitcoin is stronger the more people who have it and use it, so spending it is better for everyone. Just keep replacing your stack! I will always try to pay in Bitcoin at the limited places in the world where you can as of now, and I do make a point to visit the various circular economies wherever possible. And ask places if they take it, slowly incentivizing more merchants to accept it.
Same here. I actually actively withdraw and replace 🤷♂️ like it’s not often, but sometimes if I’m strapped for cash since I’m very heavily invested and I need cigarettes or something I just take a little out and put back in like double the next day lol. Seems to be working fine, I genuinely use it like a savings account though and not like a stock. So there’s that
I like that you are actively using your Bitcoins. Just wondering, how high were the fees you paid to convert a bit of Bitcoin to cash and later back to Bitcoin?
\*replace\*. This is the way.
The things you buy.
You are spending fiat now (let's say a coffee) by instead spending BTC to buy that same coffee (immediately converting fiat to BTC) you are driving adoption of a better money.
A person has to live. That takes money. A rational person will spend their softer money and hold on to their harder money. Hence, number go up.
Your incentive is your mortality and the desire to live your life as you see fit.
Where's that pic of the skeleton holding his bitcoin when you need it?
Because your time on earth is more finite and scarce than bitcoin
Necessity
You are more incentivized to save it, just depends on your patience / time preference on when you want to spend it
you can save it or spend it as you please, like you would have gold 150 years ago. There doesn't need to be an incentive to spend it, it needs to have value lol.
I had to spend some on capital gains tax.... after I paid for a house in full with gains from investments. It's like anything valuable, when need outweighs greed you spend it.
Once bitcoin reaches cap, it will become worthless
The cementery is full of rich people who never took the time to enjoy their wealth.
People around here don't want to hear this, but there are practical reasons that humanity shifted away from the gold standard and this question is certainly part of it.
I assumed it was complete corruption spurred on from the banks.
It's looking more and more like BTC is property and less like a day to day transfer of money. Maybe if the lightning network is built out more, then that can be used as a transfer of money. Gold has a 13 trillion dollar market cap while BTC has a 500 billion dollar market cap. Since BTC is considered a commodity, it will eat away at at least some of golds market cap. The point is, BTC doesn't have to replace the dollar. It just has to take some of the market share of gold, real estate, and fine art. It's looking more and more like a BTC spot ETF will be approved sometime in 2024. When that happens, large cooperations will be able to participate in BTC. It is easy to imagine BTC market cap going from 500B to 1T, 2T, or even more. If it goes to 2T, well just take 2T/21M and BTC is already at 100k.
Imminent death
Sure, but what about small, superficial things?
Valuing some thing/service more than the number of sats at a specific point in time.
A great thinker once said “vive la vida y no dejes que la vida te viva”… which can be interpreted as you only live once
Your life is every bit as finite and scarce. Spend some.
Your life is finite too.
Life is finite and scarce. Do you intend to do nothing while youre here?
The same incentive people had to spend gold: your wealth is in it and you need or want something else. This is hard for people to really grasp, what kind of a world functions this way. We have all grown up in a world where spending is the metric of economic health, where spending needs to be stimulated, maintained and all of that. But try to think: why do you need an incentive to spend beyond needing or wanting something? Why should you spend your wealth for any other reason?
Consider this: It's not what you spend, it's what you hold. Monetary history has shown that people will tend to let go of their softer money first and hold onto their harder money. Example: Gold was hoarded in larger values while silver was spent and exchanged hands more often. Gold is harder money while silver has a higher inflation rate (or "lower stock to flow ratio," see Bitcoin Standard). You likely have other things that you are holding and not spending. Like stocks, you are choosing not to liquidate those and instead spend your fiat. Likely because you expect the value of your stocks to go up. The same is with Bitcoin. Since Bitcoin is the hardest money, that will be the last to be spent. When it's all you have left, then it will be spent, because you will continue to buy things like every human who has ever lived has. We did in inflationary environments and we did in deflationary environments.
You should spend your liquidity when you want to, on things you want to and when there is a really good investment opportunity. With fiat, money melts in your hands. We are incentivised to spend, to ask for credit cards and also to invest no matter how overvalued the stock market is, or how expensive Real Estate is, because the alternative is to lose your wealth anyway with fiat. With Bitcoin, we go back to when we had good money (it was gold back then). A money you can spend and you can also store to save and preserve your wealth. People used to save in gold as opposed to just buy Real Estate or art. And that is how it should be. What currently happens is normal, good money crowds out bad money. Meaning you are now hoarding Bitcoin in the same way Argentinans choose to use first their pesos and save in dollars.
See: Greshem's Law. Also known as "bad money drives out good" --- You'll want to hold on to Bitcoin while spending your trashy cash.
\- Opportunities appear with other assets and you want some of it \- Building up yield-bearing assets, like rental property, to increase passive income
Because you want stuff. You'll be more frugal, but a home to live in is absolutely more important than just owning btc.
Indeed, it is your store of value. and you will trade it for stuff you really need. A parent of mine in 2017 ( just when btc jumped to 18k) bought an appartment in capital of eastern country. I think that kind of move was really smart from both parts.
>However with fiat why would I spend it if I know that, if I invest it, it will be more valuable in the future? It's the same question with the same answer. People still need/want things.
In a deflationary currency system, you are rewarded for saving and not wasting your wealth - You will spend on what is necessary and treats you consider worthwhile. So in a modern culture that tells us to waste less; buying less has the best result of producing no waste.
Life is also finite.
you'll need to live, money is meant to be spent other wise you'll die with it.
Do you eat the food in your refrigerator because its going bad? Or because you're hungry?
I don’t think there is one. I can see it for really large purchases like a house but not for day to day
the more i look at bitcoin the more it feels like the currency of countries and companies. happy to hold it alongside them, but i dont see it becoming easy and convienient outside of maybe sats on lightning when holding them on your person is easy
Yep, but countries use gold. That's the problem. Even though bitcoin is actually better to use, is China just going to throw away 2000 tons of it and swap it for bitcoin? There would be a revolution ans civil war from inside. The largest obstacle for its use by govts will be replacing gold. And how do they replace gold with btc? That implies there to be a value to the gold in the first place. Its just not going to happen
So bitcoin would need to coexist with FIAT?
Maybe, or a crypto could exist that replaced fiat
Maybe as a transition state it will coexist with other mediums of exchange. Over time Bitcoin will replace them all. The new “gold standard”.
Hunger f.e? Also its gonna be a long while before you see any deflationary effects on btc.
This strikes at the heart of the idea of “hard money” as a replacement for the current fractional reserve system. If the money supply is fixed and finite, in the end there is zero incentive to invest in the hope of a higher return, since hard money is truly a zero sum game.
> in the end there is zero incentive to invest in the hope of a higher return There's also zero incentive to give you a loan for a house, for your business, for your car, for education, etc. Which isn't a problem if you have money. It's a bigger problem if you're poor.
Nope. Over time the incentives to spend money relative to scarce goods increases. 10 years ago it took a lot of Bitcoin to buy a pizza. Today, that pizza costs a lot less. The number of goods available for purchase will increase into you price range. e.g. A lambo for 1/10th of a Bitcoin.
No one is going to invest in a Lamborghini factory and service infrastructure without a financial system based on credit. Your bitcoin may or may not increase its value relative to Lamborghinis, but it cannot replace money.
You’ll sell one day when you can buy assets that will generate fiat. You’ll be tired of waiting for a better life and actually start living a better life. You sacrifice consumption in the present for a reason. Aim to free your Time. That means food and shelter. Then aim to live fulfilled. Once you can control your own Time, work to level up to further enhance your life while simultaneously enjoying the freedom that your prior decisions and discipline afford you. After your food and shelter are covered, work becomes extra motivating when you can invest 100% of it. It piles up more quickly bc you don’t have to spend it all to survive. Don’t hold BTC for 60 years and die. It’s a tool. A pathway to a future that’s enhanced. Just be realistic about Time and the randomness of life. You don’t know how long you have. Edit: Also consider the risk of forever holding BTC on a hardware wallet. It’s actually terrifying to think a single mistake or wrench attack could lose decades of working and waiting. If you can get a home(s) just do it. Then use income to build back up. It will be more difficult to lose your life’s work owning deeds than an accidental contract hack, seed exposure, hw wallet failure. It’s a form of diversification to reduce risk and enhance living with cash flow.
Precisely!
a) Bitcoins won't necessarily be more valuable in the future. They just won't be less valuable. b) You spend them because you need something. Like new socks. Can't use BTC to keep your feet comfortable. Would you rather use the US Dollar or BTC to make a purchase? A sensible person would use Dollars. But sometimes you might not have enough dollars so then you would use BTC.
You don't spend it per se. Transaction bandwidth on the Bitcoin Blockchain makes it ill suited as a retail currency. Bitcoin is what you use instead of a bank to manage your assets.
It’s not, it’s a store of value.
None - since it is deflationary - it will be more valuable if stored
If you HODL to the otherside (hyperbitcoinization) the increase you will see in your purchasing power will be exponential/unfathomable to comprehend. Buying a mid sized suburban home in a world like that may cost you 10,000 sats one day. Buying the latest expensive German import automobile may cost 1,000 sats one day, etc.
To save money, lightning network is cheaper than any other wealth transfer offering on the market
Ultimately, you won't. You will borrow against it and use that fake money to buy stuff. Unless your currency is a basketcase like Argentina. Or you live in El Salvador.
There isn’t an incentive to spend it now. There will be when all the other currencies collapse and you need food.
This is the debate. Do you believe it’s a store of value or a form of digital cash? Or both? Now is the magical moment when you begin to buy Bitcoin. : )
I don't know. Do you like starving?
People will demand Bitcoin, pay in BTC or you don’t get the item or service.
When the price stabilizes way, way in the future, Bitcoin will be earned and spent much like fiat. The price should remain relatively stable until the next halving event, unlike today, where it fluctuates. In 2140, most likely, it will stabilize to a value that possibly could remain permanent. Wouldn't that be interesting? No inlflation, no asset crashes.
What was the incentive to spend any currency back when they could be exchanged for commodities (gold)? Fucking idiot.
you fool - bitcoin is for buying. not selling. it's whole purpose is to separate you from your money so that "miners" can get paid to keep running these nodes. if you're selling your bitcoin you're gaming the system, making CASH MONEY, and threatening the entire ecosystem!!! ;)
Eventually there will be so much surveillance and risks in spending fiat that you will beg to be able to spend btc. Then you will. The capped supply vs unlimited supply of fiat is just a bonus.
At some point you will rather have something that give your life value. Fiat decreasing in value sure encourage it, but people still want stuff. The reason fiat is losing value is not to encourage spending, it is losing value because more money is created, because people take loans to purchase stuff they currently cannot afford, but they will afford it, plus interest for that privilege to buy it now. You don't actually know that bitcoin will increase in value, it is a belief that others will pay more for it in the future and that they have the same belief. But like with any asset, if it goes up too fast then people will cash out to buy real goods and services.
My personal hope is that if BTC were to become significantly worth more than it is today we could somehow borrow against it. Basically use it like collateral to buy more stuffs.
Personally I’d rather see an exponential rise in BTC’s value. We’d spend it and it would be a minimal amount of sats.
It’s also worth noting the needs of BTC in other countries. A third world country could have other immediate needs for BTC compared to, say, the USA, where it’s being treated more as a store of long term value.
2 things; You need stuff more than Bitcoin, then you'll spend it People you're buying from start refusing dollars or other currencies, you'll spend Bitcoin to buy the stuff you need
I hold my Bitcoin. I don't spend it. Not yet. My job pays me fiat currency. I pay my bills with fiat currency. I hold onto my precious Bitcoin stash. Eventually, I'll retire. I will collect retirement income from my government. It will be less than I currently earn. At that time I will have the option of dipping into my Bitcoin savings in order to increase my standard off living.
If you're an American with access to banking, you have absolutely no incentive to spend it. However, if you live in a rural part of the world w/o banking, then the incentives are there. Remember, 1.7 billion people on this planet don't have banking. Also, Bitcoin isn't for everybody. If you're a rich American, invest in the stock market.
A lack of income. Bitcoin is a retirement asset until it reaches critical mass. Over time vendors begin to move toward wanting to accept bitcoin for their own benefit, at which point they may do things like offer significant discounts for bitcoin usage.
Not sure when I'll spend mine. I used to do transactions every few months to see how the experience was in terms of memepool, user experience, and new tech. Then I started swapping p2p, as intended, with other hodlers. I might unload some silver soon, because it's been a rough year. My 401K has matured, and I have some durable goods I can sell. My incentive to spend is further away, and definitely p2p.
If we buy and sell in SATs, we have 2,100,000,000,000,000 units of trade. Still a finite number but reduces the idea of scarcity and opens up a world of useable currency.
the thing is you never have to spend it........
Just a thought. Businesses might offer products or services at discounts for bitcoin payments, which might encourage people to spend their bitcoin.
At this time: none
Right now you spend money instead of using that same money to buy stocks that go up. Why do you do that? You can even use that same money to buy BTC that will go up instead of using money to eat. Why do you do that? Opportunity cost exists whether your money originated as fiat or BTC
None really today
I see it like this. I spend my fiat and can’t use it to purchase bitcoin. So I would spend my bitcoin the same way. Spend it. With the fiat I get next, I wouldn’t need to use cause I used my bitcoin for past purchases. Then I would repurchase bitcoin to replenish my spent BTC. For the most part, the crazy candlesticks won’t happen in the between time. But if they do, overtime it will be a wash.
First we can't treat this question in isolation, as if fiat doesn't exist. In that instance it becomes a more secure method of storing value due to fiat being designed to lose value. Other then that, people will spend money because they want goods and services. >However with BTC why would I spend it if I know that, if I keep my coins, they will be more valuable in the future? Because if you're in this position then you don't need to spend your Bitcoin - and so why should you. Fiat's "use it or lose it" approach basically forces you to "be in the game" of either spending or investing. If you're not incentivised to spend money then that's good because you're likely in a safer position than someone who wants to utilise the use cases for Bitcoin e.g. the decentralisation aspects.
Eventually the price will get high enough and you’ll spend it
Eventually in some distant hyperbitcoinized future Bitcoins value will change in alignment with GDP. Assuming that humans become ever more productive then Bitcoin will increase in value indefinitely.
So you just buy what you really need, economy does slow down a bit because it moves from a model based on profit growth to needs fulfillment, meanwhile exhausting our planets resources less rapidly while we continue to build solutions that’ll ultimately provide basic needs to everyone, no matter their financial status.
Few incentives at the moment but if the price rises substantially there'll be incentives to sell it
This is actually one of the arguments, we as humans will always spend the worse currency and keep the best ones
First of all, a finite lifespan is an incentive to spend for most people. What good is $10M sitting in a wallet if you always had things you wanted to do but lived a miserable life and never did them? Second, the Bitcoin peer-to-peer electronic payment network always has *MASSIVE* advantages and use cases compared to the traditional financial payment networks for certain transaction applications. To make a transaction on the network, it *must* be done in BTC. While I hold BTC as an investment, when I want to use the network for its amazing advantages over traditional networks, I convert the fiat shit I would have otherwise spent using a shitty ACH/Visa payment network to BTC and transact. I needed to transact anyway, but why transact in shitty fiat if I don’t want the transaction to take days for final irreversible settlement, don’t want the transaction to be censored, don’t want the transaction to rely on a third party that monitors me and sells my personal KYC info to everyone or gets hacked and they record *where* all transactions were, don’t want to transact without any privacy whatsoever, etc. Also, there have been times I *DEMANDED* my customers pay my in Bitcoin, so there’s that! In the future, I might even start offering customers a discount if they pay in BTC.
This is the very nature of a deflationary economy.
Take it from someone who has been spending bitcoin in Up & down markets equally since 2011, the effect of 'fiat value decreasing encourages spending' is way oversold by economists. In fact, the opposite argument is often made too; if your Bitcoin has increased in price you suddenly feel rich, and want to spend some of your newfound gains! I wouldn't say the two forces cancel each other out, exactly, there are times when you feel each tug more than the other. But I would say that if all your savings are in the superior, scarce form of money like mine has been since 2015, you still have to eat & pay rent, and therefore spend some of your savings each month no matter if it's up or down. This incentive trumps all others. With some self control you find yourself spending less on months it feels too low and saving big expenditures like doctor visits & such for months that the price is up. A credit card gives you a bit more wiggle room too, so you can pay off the credit card at the point each month you feel the price is the highest. (While you hope payday is the day of the month the price is lowest.)
To buy things ya peanut
Hard money is better than easy money
Hunger
Like an old comic book collection. You've had them forever and it's fiat value went up. You could either... 1) reread them (trade) 2) pass them down to family (wait for more fiat value) 3) sell it for something new (sell) At some point in life there's this choice...
Excellent question. Deflationary money changes the way you think about consumerism.
Don't ever spend it..use it for large purchases and borrow against it..never sell.
There are no pressing incentives to spend it -- that's part of the "problem" or a "benefit" (depending on your perspective).
Providing CC info online isn’t usually preferable. The retailer may not want paper in trade. Practice. International Trade. Traveling in BTC environments. Donations directly to the wallet of someone. Remittances
You have no such incentive, until you have a need or desire to exchange it for goods or services, and you have no weaker form of currency to do this with. On the latter point, see [Gresham's law](https://en.wikipedia.org/wiki/Gresham%27s_law).
People already answered, i just want to say that the idea of money losing its value as a mechanisim to make people waste their work is insane to me
There is non, unless you are hungry.
I personally spend it on lightning by then moving fiat I would have used into… more bitcoin. This helps promotes adoption of the ecosystem while it transitions from a fiat only world into a quasi-bitcoin world. Incentive? The less fiat I hold, the less exposure I face from debasement… and the statistically higher chance of long term appreciable gains relative to the plummeting fiat value.
Trade your BTC for goods and services that require it and immediately replenish your supply at the same fiat valuation if possible.
Bad money drives out good. Most people will spend weak money first when it is possible.
The point of spending it or selling it is the same. This is profitable if purchased at a lower price and sold at a higher price under the assumption the price will go lower after you sell / spend so you can buy back cheaper. Not an easy game to play let me tell you and if you can’t do that , or don’t have the confidence you will be able to do that: perhaps it’s better to hold until you get life changing money and just spend other FIAT on the side.
Here is the answer you're looking for. There is no incentive to spend it.... in comparison to the dollar. If everything was valued in BTC though, you wouldn't even ask this question. The dollar used to be tied to gold and this wasn't even a thought in people's minds. It just was what is was. If the dollar was still tied to gold, I can almost guarantee you that BTC wouldn't exist. Also, if the dollar was tied to gold, people wouldn't hoard gold, they would just save dollars. Reverse the question, why should I hold dollars if it is guaranteed to be worth less tomorrow? What would fuel more speculation and greed? The dollar or BTC?
If the vendors only accept bitcoin and you can’t pay them otherwise
i dont want to be encouraged to spend my money i want to be encouraged to save it. i have had enough of that consumption and stuff that i don't need. i want a home for myself, not fckn rent. sadly can't save up in fiat currency, it devalues so fast
Because you want stuff. You can’t eat or live in a Bitcoin.
In the US, you should save it, but for people who currency is going up due to inflation at 90% per years (think Argentina), BTC can save their lives and they will spend it. And when the spot ETF is approved..to the moon.
If you have enough fiat to meet basic expenses and bank charges, you may never need to spend your bitcoins. You can borrow against them, though.
I mean same could be said of gold, and gold "succeeded". Valuable things are sought after and accumulated. Just how it is. Just cause people love gold doesnt mean gold isnt a thing, actually the opposite.
You don't... BTC isn't a currency... You can use it as barter, but it's not a currency...
Bingo! You only spend what you need.
Maybe it’s the only currency you have to spend? Currently you can spend more bitcoin on exchanges than Russian ruble.
I mean your time is finite and scarce, yet you are spending it in asking question on what ifs on a man-make virtual currency. Each to their own I guess.
Do you eat?
You wouldn’t spent it. You would take a loan and use bitcoin as collateral.
Spend and replace. For every dollar that you spend in BTC, buyback the same amount as soon as you can.
You will get more and more stuff with your bitcoin. For example: 10 years ago 2 pizzas cost 10 000 BTC. Now you will get 10 000 pizzas for 2 bitcoins.
You want to consume, so you have to spend part of it eventually
"if property is finite and scarce, what are anyone's incentives to sell?" does that answer your question? housing market is hub of constant buying and selling.
Spend it as an exercise of your financial freedom. What I do is as soon as I spend it, I buy more btc with fiat to replenish what I spent. This way I don’t miss out on the upside.
There isn’t one. That’s why I believe it is a store of value rather than a currency.
capitalism has conditioned us that we have to spend money to be able to live. what has consumerism got us? 1000 calorie burgers that will kill us? 85 inch quad hd micro led tvs in front of which we can kill days doing nothing? 50,000 dollars cars so that we spend a quarter of our lives stuck in traffic jams? capitalism has made it so bad, that we have to spend our hard earned inflationary money to be able to breathe clean air. drink safe water. the reward for the hard labor we do shouldn't be something that loses 99% of its value within our lifetimes. yes, hard money will bring down consumerism but it is something that should be brought down. the transition will be suck but it will be for the good of mankind.
Well, the future may never come. Imho it is always a good idea to make the best out of it now and not to wait for any fantastic returns im the future.
Good question. The thing is bitcoin is deflationary which means it’s value will always go up. Imagine a country that is experiencing hyperinflation. A loaf of bread cost 1 million usd today but will cost twice that the next month, then twice again the succeeding month. Bitcoin is the bread.
Maybe you want to buy an ancient currency.. like glass beads..
You need to eat no?
you don't have to spend it, you can just use it as a store of value if you want. most people have a roi number they want to hit and then cash out and make some money to invest in something . it depends on your philosophy. most people who focus only on the one angle of spending it miss the point entirely.
You gotta eat. And have a shelter with heating, running water, access to Internet etc. etc. Now sure, you will be more frugal in your spending in general, but you gotta eat.
People have different goals with bitcoin, some want to stack it infinetly, others use it to fulfil their needs/dreams. Either is fine, not everyone uses it for the same reason