Deflation concerns and smart contract platforms
Hey, guys. I've been reading about cryptocurrencies and have a question.
One criticism to bitcoin/altcoin as a currency is its deflation. Since its value is going up faster than it's being issued, there's an incentive not to spend it, but to hoard it instead. Why can I buy 1 thing when I can buy 1.05 thing tomorrow? And why buy it for 1.05 tomorrow when I can buy 1.20 things next week? This dynamic is in contrast with fiat currency which inflates, so there's an incentive to spend money and this fuels the economy. According to the criticism, a deflating currency just isn't too great at its job as a currency.
How do you think cryptos with alternative uses, e.g. Ethereum, relate to this? Could their value hold up as primarily a smart contract platform instead of as a currency? How do you figure this will affect crypto prices in the near and distant futures?
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