Bitcoin is deflationary
I've heard it being said that bitcoin is deflationary.
There will only ever be 21,000,000 bitcoin in existence once every bitcoin has been mined.
If this is the case, how does this affect the way people use bitcoin? If bitcoin is deflationary, meaning that the longer you hold it, the more 'stuff' you can buy in the future.
This is unlike inflation, where the purchasing power of your inflationary currency decreases over time. The incentive is to spend it before the currency loses even more value.
Knowing this, why would any want to spend bitcoin? And if your national fiat currency is inflationary, why wouldn't anyone want to move their fiat into the deflationary Bitcoin?
Or taken from another perspective....
Just switching to Bitcoin from fiat currency would put one ahead even if the price doesnt move. Fiat loses its value while Bitcoin gains in value.
Remember, technology is deflationary by its very nature which means the more tech penetrates our society, the less things will cost in the future. It is a double win.
So I agree, why spend BTC?
On the other hand it could be more valuable.
Spend BTC to make more BTC?