I think this article makes a good point. What incentive do bitcoin holders have to use it as a 'currency'? I bought $80 worth of parts for my Raspberry Pi kit (which was essentially free to me due to the increase in BTC value) and I now "deeply regret" it as the author mentions in his article. A friend of mine has 15BTC that he is lothe to spend due to the increasing value of the cryptocurrency market. When will we see stability? Even if prices did stabilize, would we ever see widespread adoption of btc, or any other cryptocurrency for that matter, as a medium of exchange?
The bitcoin fees required for confirmation in the next block are currently above $20 for a typical transaction size[1]. This could be attributed to the block size limit, but recently the fees on Ethereum (which has no fixed block size limit) have exploded and are also well above $1 now[2].
So is the effect of deflation on spending even relevant at this point? We're learning that current blockchain designs don't scale, so widespread use of them as currency is impossible anyway!
Yes, there is R&D being done to try to address this, but it isn't clear to me that the problem can be solved while keeping the salient properties of cryptocurrencies.
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[ 4.1 ms ] story [ 18.8 ms ] threadSo is the effect of deflation on spending even relevant at this point? We're learning that current blockchain designs don't scale, so widespread use of them as currency is impossible anyway!
Yes, there is R&D being done to try to address this, but it isn't clear to me that the problem can be solved while keeping the salient properties of cryptocurrencies.
[1] https://bitinfocharts.com/comparison/bitcoin-transactionfees...
[2] https://bitinfocharts.com/comparison/ethereum-transactionfee...