Why People Do Not Want To Spend Their Crypto And Why Steem Has It Right With Incentives
Hey everyone,
How is your day going?
I have talked before about the reason people do not spend crypto when they think the price will go up. Sure it can be money but why would anyone use bitcoin instead of money when one will probably go up in the future. And if you are invested you believe bitcoin will be going up in value so those who have it are less likely to spend it as cash. And this is even more true in the bear market.
But that is where coins like steem got it right. As the market starts to turn people can use their steem without risking losing it or spend the money they make from posts and dividends. This lets people keep their crypto, which everyone wants to do as we head out of a crypto winter, and still use it. This is where crypto gets its edge over fiat and gold, with smart contracts it can have more uses and perks and these can be perks that people get without having to spend it.
Absolutely agree! I envision ultimately having a portion powered up to maintain my Voting Power and Resource Credits and use that to engage so that the rewards can be used to spend. It provides great opportunities and flexibility.
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I'm guilty of that, too and I agree that I feel more comfortable spending Steem because I can get it back. The thing is that the more people use it, the more velocity it has and that is a big part of raising prices.
Not wanting to spend crypto is a big part of the issue I feel with crypto being adopted. Of course, like you said, many would rather hold it instead of spending it, but it would probably depend on what service or platform would allow for us to use crypto in the first place. For example, my friend trades in the coins he mines or gets from his mining pool in order to pay for his vps fee. That's a big reason why I think something like the bitcoin pizza was absolutely necessary; in order to show others that yes, crypto can be used as an actual currency. The problem is the method of earning that crypto.
That is why I agree with you on the Steem part. Since there is a way to earn it, it honestly doesn't feel as bad if you had to take some out to spend it because you would know that as long as you were putting out content, you had a chance to earn back what you pulled out.