Why would I even buy the smallest priced thing with deflationary bitcoin, when I could instead hoard it and wait for it to increase in value?
I think most people who have ever used bitcoin as a medium of exchange have kicked themselves when they realized how expensive that thing they bought was at current (very high) exchange rates.
Given the inflationary dollar, you probably wouldn't, but otherwise, you'd need to transact at some point.
Perpetual debt against assets is a common trope in tax avoidance. People do use/abuse this. If enough people abused it inflationary money would fail.
Deflationary money isn't bad, but the common belief says it is. One example that changed my mind was business investment.
Why would you loan money to a business if the money itself might be worth more later? Well you probably wouldn't. Instead, you'd buy a share of the business itself.
We've all live in a system of inflationary money and were educated by a system that teaches it's use. We should acknowledge our bias here and keep an open mind.
The problem with that is that deflationary money isn't exactly a new idea. It's been tried before, it's workable, but it has problems. However, it is an idea that favors people who already have lots of money over those who don't, which has fueled background level nostalgia (and nostalgic propaganda) for the idea.
Bitcoin had some genuine innovations, but that doesn't mean all the ideas that were baked into it were good ones.
Not arguing... Legitimately asking. Outside of gold or other materially limited resources, what are some examples?
> it is an idea that favors people who already have lots of money over those who don't
Please elaborate on this. Particularly in comparison to our current debt->create system that seems to benefit those with enough to loan.
The arguments surrounding deflation aren't necessarily wrong but it's hard to gauge the actual effects of it in practice at this stage where market forces are way more impactful.
I'm not saying the price can't increase, I'm saying that dividing coins does not reduce scarcity.
Edit: Updated my original comment, turns out I'm the one who misunderstood your point. We actually agree.
The dollar point feels more like word play. In retail there is a lower bound limit for dollars and this is 0.01 dollars. Not so with Bitcoin transactions. If 0.00001 of bitcoin etc. Is viable tender then simply put the limited supply of bitcoin might be misleading.
In the US, fuel stations price in tenths of a cent.
Google Cloud's per-second billing prices resources with a millionth of a cent precision.
One troy ounce of gold consists of 3.36x10^27 atoms.
There is not an infinite supply of Bitcoin, dollars or gold just because you can divide them into arbitrarily small pieces.
Again (for the third time) are you aware if fractions of bitcoin can be sent from one account to another? Or does it have to be one whole bitcoin? Again I don't know.
I'm just thinking theoretically you could convert bitcoin into bitcoin_plus and these coins represent 0.0001 of a bitcoin. And tada you have 100 million coins in circulation etc.
This sounds sustainable. /s
It completely depends on if it finds a sufficiently broad use case or not. So far, not.
The number only matters as long as it can subdivided sufficiently to buy the smallest priced thing.
You're thinking of it as a fixed sized pie and thinking dividing it doesn't make a bigger pie. But it's not fixed, the whole pie can grow as bitcoin increases in value. It's up to one trillion dollars now.