“Hoarders” are bad for Bitcoin.
If you have been in the Bitcoin space for any significant amount of time you will have heard this argument a million times over. Speculative investors are bad, the argument goes, only merchant adoption and actual transactions grow Bitcoin's value as a global currency system.
I couldn't disagree with that statement more. Bitcoin's greatest value proposition is as a secure store of value that cannot be seized or blocked by governments or corporations. This capability has never been possible before in human history. If we all agree that there is tremendous value in an independent / decentralized wealth storage system then the price of bitcoin should rise as more and more people store their wealth in bitcoin. This is not hoarding. Hoarding is intentionally a negative word, this is individuals saving their money, just like buying gold or putting your money in a a savings account isn't considered hoarding. Our societies have encouraged spending over saving for decades through the implementation of worldwide fiat currencies with built-in inflation. It is time to remove the stigma of saving your money. For the first time in almost half a century, the average person can once again safely store their wealth and watch it appreciate in value so their children can have a better life. Bitcoin enables secure wealth storage in a way that doesn't rely on governments or corporations and goes above that even, since it also enables users to easily transfer that wealth to others.
It is time to remove the stigma of saving your money.
“Hoarding does not help the bitcoin economy at all, in fact it stifles its growth as its clamoring for traction and mass acceptance. It locks up bitcoin in a place where it's not being cycled back and forth making it scarce and therefore making it economically unviable as a currency and as a means of transaction. Hoarding in no way makes bitcoin a viable solution in the medium to long term. Not to mention if hoarding is done to manipulate price, it may work short-term, but cornering supply has never been a great wealth strategy especially as people and/or governments sniff out manipulation and “change the rules of the game.” Its more of a going bust strategy.” - George Samman, co-founder BTC.sx
First a little context to that quote, George Samman runs a business that enables users to short the bitcoin price with leverage, and in that way can benefit greatly from a falling bitcoin price. Him and his company have routinely posted on reddit and other social media telling users that the price of bitcoin will fall further. They have a direct conflict of interest when talking about the bitcoin price, because they are one of the main providers of leveraged short trading. (Note: I also am biased when talking about bitcoin price because I own bitcoin, but at least I own that, and don't pretend to be unbiased.)
Bitcoin enables secure wealth storage in a way that doesn't rely on governments or corporations and goes above that even, since it also enables users to easily transfer that wealth to others.
Second, his argument lacks basis in reality because each bitcoin can be split into 100M sub-units, and with a slight change in the protocol even more sub-units can be possible, if necessary. “[Hoarding] locks up bitcoin in a place where it's not being cycled back and forth making it scarce and therefore making it economically unviable as a currency and as a means of transaction,” states Samman. This statement couldn't be more incorrect. If people hold on to bitcoin, the price per bitcoin will go up according to the principles of supply and demand. Less supply, with equal demand, results in a higher price for the commodity/currency being traded, enabling users to still transfer large amounts of wealth but with less bitcoin required to do so than before. This is one of the main characteristics of Bitcoin that make it more useful than other fixed supply alternatives such as gold and silver, because even if bitcoin are lost or held, the ability to subdivide the remaining bitcoin allow the currency to scale to accommodate an ever increasing monetary base.
Quick thought example: Currently there are roughly 14M bitcoin in circulation. If for some reason, 13M of those coins were to be lost forever, Bitcoin could still function as designed because each bitcoin would theoretically scale up in price to accommodate the same monetary base as before the coins were lost.
The use of bitcoin as a store of value/wealth is not spoken about enough in my opinion. It has the potential to be the most secure/easy store of wealth that the average person has ever had available to them. If anything, the ability to store large amounts of wealth securely and without a third party such as a bank or country is bitcoin's killer app. Bitcoin goes above that even, since it doesn't only enable you to easily secure your wealth but also to easily transfer that wealth to others.
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