I meant circulation and investment. Cold is cold, if I understand it correctly, and is taken out of circulation. It is unlike fiat, and more like gold in the vault. Does no good to economy. 🐶🐾🫡
Discussion
False. Capital accumulation is key to investing in important things, starting a business, investing in equipment or inventory all require capital accumulation these things do help the economy. You are thinking high time preference.
Or land or a house a car etc etc you need to accumulate capital (bitcoin) to do these things not gonna happen if you zap it all away.
That is not a problem, and not exactly what I was asking. I meant “cold” and out of circulation, unlike other currencies. So far the closest analogy I can come up with, is gold. Scarce and largely unused. 🐶🐾🫡
The only bitcoin “out of circulation” is lost bitcoin that cannot be recovered. Cold storage just mean keys offline and usually for saving, meaning spend over longer time frame in larger amount.
Cold ≠ out of circulation
But cold is equal out of circulation while it is not spent. Since I am coming from a fiat world, where even you money in the bank are lent to others to do things and circulate, I see bitcoin cold storage as purchasing a bar of gold and keeping it to spend later. Am I missing something fundamental here? 🐶🐾🤔
Cold storage refers to security ie keys off-line usually with a device such as signing device aka hardware wallet. Your coins are never out of circulation they are able to be spent at any time without any permissions necessary no gate keeper.
Hot storage refers to a wallet where keys are stored on an online device such as a mobile wallet. Less secure, ok for smaller amounts and spending.
Both coins are in circulation, cold or hot just refers to key storage. Granted if you are saving for long term it would be foolish to store in a hot wallet as it’s less secure so better as a spending wallet.
The only coins “out of circulation” are coins that are permanently lost and cannot be recovered.
You can spend cold storage Bitcoin at any point you wish to do so without consulting or getting permission from anyone.
I hope that helps your understanding. Bitcoin is a deep rabbit hole.
I think this note gave me a little more insight now! 🐶🐾🫡
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