2minutebitcoin on Nostr: ***Money becomes more useful the more people use it**.* As more people begin to hold ...
***Money becomes more useful the more people use it**.*
As more people begin to hold money, the rational response of everyone else is to try to hold more than they already have as they see its value increasing and usage increasing.
Everyone, therefore, will try to increase his cash balance at the same time, and they will do this by bidding larger amounts of other goods in exchange for it.
In other words, the money becomes more valuable, leading to all prices tending to go down priced in that money.
Effectively, everyone with an existing balance ends up with more money, except that they end up with **more valuable units** of money rather than higher sums of it.
-- an excerpt from It's Not About The Technology, It's About The Money (2016), its 2-minute version can be found here: https://2minutebitcoin.org/blog/bitcoin-is-about-the-money-not-the-blockchain-technology
As more people begin to hold money, the rational response of everyone else is to try to hold more than they already have as they see its value increasing and usage increasing.
Everyone, therefore, will try to increase his cash balance at the same time, and they will do this by bidding larger amounts of other goods in exchange for it.
In other words, the money becomes more valuable, leading to all prices tending to go down priced in that money.
Effectively, everyone with an existing balance ends up with more money, except that they end up with **more valuable units** of money rather than higher sums of it.
-- an excerpt from It's Not About The Technology, It's About The Money (2016), its 2-minute version can be found here: https://2minutebitcoin.org/blog/bitcoin-is-about-the-money-not-the-blockchain-technology