Bitcoin usage over time: investment vs spending

-1

1) Some people buy bitcoins as a method to invest/save money, other also spend them directly for purchasing stuff "here and now". First question is how ever can we estimate the ratio:

bitcoins_spent_to_buy_stuff / bitcoins_purchased_for_investment

(For simplicity we may assume that if the guy didn't spend a bitcoin during 3 months, that counts as investment)

2) Why do I care about that ratio? I have a hypothesis that if that ratio increases over time, that means that Bitcoin is becoming a medium of exchange. Otherwise (the ratio is constant or decreasing) Bitcoin is a bubble that is fed by people's hope that one day it's going to become a medium of exchange. I don't have anything against hope alone, but if that hope doesn't have at least some supporting evidence, then I can reasonably call Bitcoin a bubble.

2a) There could be a case when "investing userbase" is rising quicker than "spending userbase", then we would care not only about the ratio, but also about absolute value (number of bitcoins used over some period of time for purchasing stuff). So the second question is is there something wrong with my line of reasoning?

Yurii

Posted 2016-11-04T22:59:58.737

Reputation: 117

Answers

0

In response to 2a- yes. your line of reasoning is completely arbitrary, what special significance does 3 months, or 3 seconds, have in this age of high frequency trading?

If you consider things like sidechains, lightning network, etc., the idea that bitcoin is only valuable in so far as it's a proxy for cash is too restrictive.

smatthewenglish

Posted 2016-11-04T22:59:58.737

Reputation: 1 063

Special significance is that if some sum of bitcoins remains untouched for 3 months, we can consider it an investment. I didn't mean that bitcoin is only valuable as a medium of exchange.Yurii 2016-11-04T23:33:31.980

do you consider a trader to be an investor? for instance- think about how many bots are trading bitcoin all the time, maybe they hold it for 3 seconds, maybe lesssmatthewenglish 2016-11-05T00:24:08.387