How can a currency that is so volatile be used for actually buying and selling stuff? If you were going to put your car up for sale today and you had to set a price in bitcoin how could you possibly choose a number? Will bitcoin ever settle down to a stable currency?
When the Euro was careening +/- anywhere from 20% to 100% against USD twenty years ago, everyone still managed.
“Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!”
While Euro is more stable now, it still changes real time and the system has to handle that. Same methods can apply.
> “Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!”
Six months ago, Bitcoin was literally selling for 25% of its current price (~$11,500), and about half its rise has been in the last two months.
Twenty years ago, the Euro didn't look that volatile. It bottomed out at ~70% of its previous high, and it took two years to get there.
I think what many people are missing is that it may not be a good currency for small purchases but for moving very large sums of money it can be very convenient.
There are no instruments in the world today that would allow you to move from $1,000,000 up and up by fitting it easily and discretely into your pocket. Could be a smartphone, USB drive, or a san disk.
People in the west forget that like 85% of the world live in very corrupt countries where confiscation of property/wealth is real. If you want to get your money out of said countries this is the best way to do it hands down!
The most common store of value is cash. But it can be other things like a house, or stocks, or bonds. Anything that you can use to purchase other stuff. Key desirable store of value attributes is that it is widely accepted and doesn't lose value over time.
During a bull market you could sell the car at a discount, and during the bear market, at a markup.
FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before.
> FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before.
Following that logic, pretty much everyone that ever sold bitcoin made a mistake, given we were at an all time high last week or so.
I am not an economist, but I know that a deflation can be bad for the economy. People are encouraged to wait rather than spend because the price will be lower if you can hold out a little longer. This can become a positive feedback loop which is bad news for the economy.
I’m not sure what Bitcoin is really about, but it sure makes for good speculation and day trading.
a majority of hashpower can enforce a softfork (tightening of rules), but has nothing to do with a hardfork (change of rules). If non-miners stick with old rules, then miners using new rules simply get ignored by everybody else.
You don't have to set the price in Bitcoin. Thinking in terms of opportunity cost tells us that all prices are already set Bitcoin (and every other easily fungible asset).
Okay this may come off as naive, or even completely wrong, so give me a break but...
What if you tied the price to a trade able good. Eg: $x USD in BTC. While it completely negates the idea of BTC, allows you to list an item for sale at a stable value.
As a seller you'd simply denominate the prices in USD, keep some percentage of the btc as it is very likely to appreciate and convert the rest to USD as soon as possible to mitigate fluctuation risk.
As a buyer, you'd just purchase btc in the moment preceding the transaction or spend from your own hodlings if it seems like a good moment to reduce exposure.
