People are drawn to lots of things which are destructive. (Theft, rape, etc.) So what?

> Fortunately, you can't tell people what to do and where to store their money.

You actually can, and, more usefully, you can adopt a social convention in which the generally accepted "money" isn't particularly attractive to hoard.

> Thus, a currency that allows hoarding will always be more attractive to people than the one which doesn't.

Well, to people who are ignorant of its harms or who maliciously seek to cause them, sure.

> Soon enough people will learn that there is no deflationary spiral. They will also learn that currency can be both deflationary and move around.

A deflationary currency (if it was the only one around) might still move around in exchange, especially for necessary consumables, but it creates a disincentive for investment, because the appreciation of the value of the currency makes it compete with investment vehicles, which encourages hoarding over investment -- and the more hoarding that occurs, the faster the money supply shrinks and the faster the exchange value of the currency rises, increasing the incentive to hoard. Its a classical positive feedback loop, which inevitably lasts until the currency is reformed in such a way that removes the deflationary features (impossible with BTC), external social/legal factors are imposed which limit hoarding, or until it is displaced as a currency and reverts to its commodity value (which, for BTC, is zero.)

Where I don't agree with you is that the divisible nature of bitcoin somehow makes it viable (most currencies are divisible by the way, 100 cents = $1). The fact is deflation suppress spending (and hence economic activity) because the currency will be worth significantly more in the future than it is now, and therefore, I would prefer to hold onto it rather than spend it. Divisibility does not change this.

Where I am still up in the air, is whether or not a digital currency needs to be inflationary. Gold has some industrial uses, but it's value is largely due to tradition and speculation. It has long been used as a common store of value and is bought by traders as a hedge against fluctuations in the global economy. Bitcoin could become the 'Gold of the internet'. A new way to hedge against the global economy, but other than that, not something that really affects everyday life, except maybe at the fringes (when was the last time you bought something with gold).

I hope this changes your mind.

No, if nobody invests, then there will be NO goods and services at all. That is a recipe for economic calamity, and would create a situation where guns and ammo would end up more valuable than any currency (what is the point of holding a currency if you can't buy anything with it?). I have yet to read a convincing explanation as to how deflation is a good thing. The general premise is that a 'little' deflation is a good thing because it encourages people to save, but the authors always fail to address the fact that deflation leads to more deflation and hence the 'deflationary spiral' that eventually causes things like the great depression. One author actually argues that the Great Depression was a good thing, but I don't exactly agree with that sentiment.

Once again, Gold is a better comparison to bitcoin than any fiat currency, because bitcoin is not a form of exchange for any particular economy and the dangers of deflation do not necessarily apply. More than anything, bitcoin is being used as a store of value. While this doesn't make for a good currency, it does not necessarily mean bitcoin is doomed.

So it isn't just that BTC will (in a hundred odd years) stop growing the money supply, it will probably (sooner than that) start leaking bitcoins from lost wallets, and as the money supply drops deflation grows faster than with a fixed money base.

With a fixed upper limit on the number of BTC ever issued, if wallets are lost at any non-zero rate, there will eventually be exactly 0 BTC that can be spent.

Every day I would have to work harder or be paid less, all the while my economic output would be increasing the wealth of those who are unproductive but happen to possess currency. No thanks.

Those who by and large run the world right now sit on their laurels letting their money (albeit, in "risky" investments rather than a box growing in value) make them even richer. While their money might be productive, they more or less aren't contributing anything else, and they do it in self-interest.

I'm not trying to argue for deflation, and I do think the design of BTC as a finite monetary supply is fundamentally flawed, but deflation and inflation respectively benefit someone - deflation those who hoard, and inflation economic growth. But both depend on people who have the money in the first place.

Yeah, but you can't. BTC is deflationary because of built-in supply constraints. Its trivially obvious that you can't expect a fixed salary in it unless you have a shrinking pool of employed people.

> If the employer adjusts down, your net buying power doesn't decrease if prices adjust to increased value of money.

If the employer adjust down at or slower than the pace of deflation, your buying power doesn't decrease, just as it doesn't with an inflationary currency if your employer adjusts up at or above the pace of inflation.

Of course, if your employer is paying you in Bitcoins, they need to get them from somewhere, and with a deflationary currency which encourages hoarding and discourages both spending and investment, good luck with your employer having much success with that.

> Those who by and large run the world right now sit on their laurels letting their money (albeit, in "risky" investments rather than a box growing in value) make them even richer.

Investments aren't money, they are things purchased with money.

> While their money might be productive, they more or less aren't contributing anything else, and they do it in self-interest.

Right, currencies managed to be mildly inflationary harness the self-interest of the rich to produce diffuse benefits (which, unfortunately, are often counteracted by things outside the currency system itself, but that's a different issue), while currencies designed to be deflationary harness the self-interest of the rich to produce diffuse harms (which, unfortunately, are often aggravated by the same things outside of the currency system that mitigate the benefits of inflationary currencies.)

I find it very common even here on HN that many people fall for this fallacy that money == value.

As a result anyone with enough old money can parasitise on productive society forever, to the nth generation. And instead of doing so by (at the very least) stimulating the economy through investment, they can do it just by sitting on their mattress full of cash.

Again, why would I participate in an economy where my hard work is of direct benefit to people just sitting on cash?

It's only when money are invested then you have a surplus of things in the economy which deflates the money. By investing, hoarders allow others not-yet-rich people access to capital. Thus, if hoarders want to become richer they will have to make rich others too.

Does it though? I thought we were all addicted to growth? If we continue to have any growth then with a limited cash supply, each unit becomes worth more (deflation).

"By investing, hoarders allow others not-yet-rich people access to capital."

I'm not clear on how you think this works, because (AFAICT) hoarding BTC is just holding on to currency, not any sort of investment?

" Thus, if hoarders want to become richer they will have to make rich others too."

Or they can just sit on it while others do the work and achieve much the same with no risk...

It's a tricky circle, but once you understand it, it all becomes clear.