<story><title>The Bitcoin bubble – Greater fool theory</title><url>https://www.economist.com/blogs/buttonwood/2017/11/greater-fool-theory-0</url></story><parent_chain><item><author>autokad</author><text>I was having a conversation about bitcoin, and I was saying the fact that the price goes up so fast means people cant&amp;#x2F;wont actually use it as a currency.  I think someone bought a pizza with 10k bitcoin? thats now 70 million $.  Even in the last year it has moved up so fast, and if people think it will continue to grow &amp;#x27;because of adoption&amp;#x27;, people cant actually &amp;#x27;adopt&amp;#x27; it and use it as a currency, because todays bitcoin is worth a lot less than tomorrows.&lt;p&gt;then i realized, i was describing deflation.</text></item></parent_chain><comment><author>mbrock</author><text>It definitely means people won&amp;#x27;t use it as a unit of account (for debts, budgets, etc), which is one primary use for a currency...&lt;p&gt;But I don&amp;#x27;t think it means people won&amp;#x27;t spend it or trade it for some other currency or asset. If you held a bunch of bitcoin while the price in USD doubled, and you happened to want a new smartphone, you&amp;#x27;re sure you wouldn&amp;#x27;t buy one?&lt;p&gt;If you were absolutely confident the price would quickly rise even more, maybe you would prefer holding, but if you really want the phone and you think BTC&amp;#x2F;USD has some risk?</text></comment>
<story><title>The Bitcoin bubble – Greater fool theory</title><url>https://www.economist.com/blogs/buttonwood/2017/11/greater-fool-theory-0</url></story><parent_chain><item><author>autokad</author><text>I was having a conversation about bitcoin, and I was saying the fact that the price goes up so fast means people cant&amp;#x2F;wont actually use it as a currency.  I think someone bought a pizza with 10k bitcoin? thats now 70 million $.  Even in the last year it has moved up so fast, and if people think it will continue to grow &amp;#x27;because of adoption&amp;#x27;, people cant actually &amp;#x27;adopt&amp;#x27; it and use it as a currency, because todays bitcoin is worth a lot less than tomorrows.&lt;p&gt;then i realized, i was describing deflation.</text></item></parent_chain><comment><author>marcosdumay</author><text>You are describing an insane rate of deflation. People do very different things with currencies that evaluate a more normal 3% an year.</text></comment>