High vs. low time preference. Listen to #[7]​ talk about how they use bitcoin in their business.
Discussion
Where do I listen?
Dollars you are incentivized to spend because they decrease in value year over year.
Bitcoin you are incentivized to save because they increase in value year over year.
This is not linear but on an average 200WMA it only goes up. Ie 4yr cycle
You’re more incentivized to keep them because no onr accepts it as currency (it’s fake money.)
This is one of the points we’re curious about. We don’t understand why anyone would spend bitcoin if the economics of bitcoin (assuming it will increase in value significantly) only give you incentives to keep it/not spend it.
So how do you actually create a circular economy if there is no incentive to spend?
It’s a good question.
It’s a shift in thinking. In the fiat system you borrow money now to spend and become in debt. You do this because the cost of good increases over time, so you must spend now.
In bitcoin, you save first and accumulate the capital needed to purchase the good or service first. When my savings increase in value enough, you buy the newer car you need or whatever. You do this because goods and services become cheaper over time.
Now why would a spend it. Well you still need to eat, have housing, pay bills, go on vacation and all the things you want to spend money on. You just save it first and are prudent because you have to decide if the opportunity cost is worth the product or service.
Over time the the big wings will lessen and it will become more stable but as long as demand for bitcoin is greater than fixed supply price will go up in terms of dollars. Dollar supply is always expanding while bitcoin supply is on a fixed distribution.