One economist's 'hoarding' is another's 'capital accumulation'. Note that in order to accrue any form of money, some valuable things must be provided in return (assuming voluntary exchange). So while the hoarder may have pleasure from owning digital or physical bills of exchange, everyone else gets to benefit from real goods and services that have been rendered. Of course, those hoarders that really remove money from circulation are a very small exception.
If there is belief a currency is going to deflate it puts the brakes on spending. Why buy widget x today when you can buy two widget x's next month? Most people will just wait. The hoarding effect is a natural phenomenon, not necessarily a black/white thing.
I understand people use bitcoins for services rendered and a fairly limited number of products - but that is clearly to the benefit of the seller. It would be nice to see some statistics on bitcoin users actually using them as a currency. I'd wager it's less than 10%, esp. now they've become a media darling and a vast number of folks are looking at these like guaranteed lottery tokens.
Your comment made me realize that computers have long exhibited this property. It was always nerve racking buying a computer because you could get one twice as fast in 18 months so people were hesitant to buy. This always appears to be true of almost all new developing technologies. In fact, all of the fastest growing industries I can think of exhibit this property.
There are some expenses you can't live without like food, rent, clothes etc. Holding cash in a deflationary (and non fractional-reserve) currency may be the equivalent of a savings account in a bank.
But hey, if people really did decide to lead frugal lives in order to save money, capital would expand faster in areas more essential to human existence. Consider it as a shift toward long-term goals rather than short-term gratification. Of course, the longer the timeframe, the harder it is to predict future demand, so there is a limit to how future-oriented people can get.
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One economist's 'hoarding' is another's 'capital accumulation'. Note that in order to accrue any form of money, some valuable things must be provided in return (assuming voluntary exchange). So while the hoarder may have pleasure from owning digital or physical bills of exchange, everyone else gets to benefit from real goods and services that have been rendered. Of course, those hoarders that really remove money from circulation are a very small exception.
If there is belief a currency is going to deflate it puts the brakes on spending. Why buy widget x today when you can buy two widget x's next month? Most people will just wait. The hoarding effect is a natural phenomenon, not necessarily a black/white thing.
I understand people use bitcoins for services rendered and a fairly limited number of products - but that is clearly to the benefit of the seller. It would be nice to see some statistics on bitcoin users actually using them as a currency. I'd wager it's less than 10%, esp. now they've become a media darling and a vast number of folks are looking at these like guaranteed lottery tokens.
Your comment made me realize that computers have long exhibited this property. It was always nerve racking buying a computer because you could get one twice as fast in 18 months so people were hesitant to buy. This always appears to be true of almost all new developing technologies. In fact, all of the fastest growing industries I can think of exhibit this property.
There are some expenses you can't live without like food, rent, clothes etc. Holding cash in a deflationary (and non fractional-reserve) currency may be the equivalent of a savings account in a bank.
But hey, if people really did decide to lead frugal lives in order to save money, capital would expand faster in areas more essential to human existence. Consider it as a shift toward long-term goals rather than short-term gratification. Of course, the longer the timeframe, the harder it is to predict future demand, so there is a limit to how future-oriented people can get.