Topic: A cryptocurrency with volatility can't be used as money (Read 34045 times)
from the business side, it is not easy if the company wants to develop business marketing with such currency conditions. If so, they will start with stable coins, and most will definitely be more comfortable with it in the end. So the point here is that crypto with high volatility will remain a stock asset that is not offered even if there are companies that provide risky things like that, they also always measure potential panic ratios that will emerge
The cryptocurrencies can be still used as a money but not a day to day type of money. We can still use cryptocurrencies to purchase something in the internet but using it on our daily expenses is not worth it because we will lose money since there is always a transaction fee and you are risking the value of your cryptocurrency with the volatility. Use your cryptocurrency as a money on big purchases and not on cheap ones.
the most important thing is the issue of legality from the government and for now my country is still prohibited from using crypto as a direct payment transaction, nor can it be used for payment but I am sure that legality will be obtained from the government in the future great hopes for investors to be able to obtain legality in my country safe and comfortable investment of course 
Yes it's true, if the volatility is too high then its not suitable to be used as currency, imagine one apple cost 1 BTC today the next day it can caused 0.8 BTC and the next day it cost 1.1 BTC, it will make the owner hard to set the price and predict the profit, but if the volatility is within months then I think it is still okay, crypto currencies need to be mass adopted so the volatility is not too high
I think everything you say is true, bitcoin is a currency that has volatility. but in my opinion bitcoin can still be used as a transaction tool, as long as there is still cash as a counter value of bitcoin, for example USD or other fiat currencies. You give an example of an apple price, at other times it might be that the price of an apple will differ in bitcoin counts when the price of a bitcoin has decreased or increased, but it will still be the same value as the cash currency. in my opinion bitcoin will not be able to eliminate cash, because the value of bitcoin is calculated in cash. The point is in my opinion, bitcoin can be used as a transaction tool as long as there is still cash as a benchmark.
Yes it's true, if the volatility is too high then its not suitable to be used as currency, imagine one apple cost 1 BTC today the next day it can caused 0.8 BTC and the next day it cost 1.1 BTC, it will make the owner hard to set the price and predict the profit, but if the volatility is within months then I think it is still okay, crypto currencies need to be mass adopted so the volatility is not too high
I think everything you say is true, bitcoin is a currency that has volatility. but in my opinion bitcoin can still be used as a transaction tool, as long as there is still cash as a counter value of bitcoin, for example USD or other fiat currencies. You give an example of an apple price, at other times it might be that the price of an apple will differ in bitcoin counts when the price of a bitcoin has decreased or increased, but it will still be the same value as the cash currency. in my opinion bitcoin will not be able to eliminate cash, because the value of bitcoin is calculated in cash. The point is in my opinion, bitcoin can be used as a transaction tool as long as there is still cash as a benchmark.For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.
What do you think about this argument?
for this reason many people disagree with the use of crypto as a means of payment. the ups and downs of prices that occur quickly make our assets unstable. however, some countries do not mind if bitcoin, or cryptocurrency with a high degree of volatility is used as an investment tool, because it is already widely used. however, despite that, there are still so many people on the internet using cryptocurrency with volatility as a means of payment for investment purposes, or fast delivery.What do you think about this argument?
For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.
What do you think about this argument?
for this reason many people disagree with the use of crypto as a means of payment. the ups and downs of prices that occur quickly make our assets unstable. however, some countries do not mind if bitcoin, or cryptocurrency with a high degree of volatility is used as an investment tool, because it is already widely used. however, despite that, there are still so many people on the internet using cryptocurrency with volatility as a means of payment for investment purposes, or fast delivery. What do you think about this argument?
Crypto currencies are very volatile. Stable crypto currencies are in the top 20 but still very volatile compared to fiats. But we all know that there are already businesses that accepts them, particularly bitcoin, eth, bch, xrp and ltc. And we better expect that there will be more establishments that are accepting crypto currencies in the future even with this volatility level.
The cryptocurrencies can be still used as a money but not a day to day type of money. We can still use cryptocurrencies to purchase something in the internet but using it on our daily expenses is not worth it because we will lose money since there is always a transaction fee and you are risking the value of your cryptocurrency with the volatility. Use your cryptocurrency as a money on big purchases and not on cheap ones.
Yes, you can use it but the OP has another argument about it.
As the OP's example :
If you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.
Relating your statement to the OPs post. If you are selling Rolls Royce Sweeptails and I bought 2 of it, and as you said buy on big purchases using Bitcoin, and I used my Bitcoins. Let's say one month later and the price of Bitcoin dropped, that also means that the car's value you are selling dropped too, do you get it? We can't use Bitcoin because it is decentralized. Now imagine that continues changes happening every day in our lives, you will never know how much a gum really costs in a day.
The cryptocurrencies can be still used as a money but not a day to day type of money. We can still use cryptocurrencies to purchase something in the internet but using it on our daily expenses is not worth it because we will lose money since there is always a transaction fee and you are risking the value of your cryptocurrency with the volatility. Use your cryptocurrency as a money on big purchases and not on cheap ones.
indeed like that the purpose of the creation of cryptocurrency and by following the times and technology of cryptocurrency is needed someday but at this time in my country it still cannot be used real transactions of crypto currency as a legal payment instrument and the government still prohibits direct transactions with crypto currency but I am sure in the future everything will be done I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.
What do you think about this argument?
I think it is more ideal to use crypto as an investment rather than a substitution to fiat. The volatility of crypto is way more higher compared to fiat that's why we should not demand having crypto as our mode of payment for everything. Maybe we can let it be a mode of payment for some stores or any other purchasing means but considering it becoming our currency completely, I don't think so. We may just end up having chaos and misunderstandings if that would actually happen. What do you think about this argument?
That's true , the volatility is what makes lots of people not accepting it as a means of payment, just like some small scale business owner lamenting about their loses due to the instability
Do you think volatility is the main concern for cryptocurrency not accepted as means of payment by many businesses? Well, I don't think so. Most of the businesses are not accepting cryptocurrency as payment now because of the rules surrounding it in their country. Some countries have stated clearly that cryptocurrency is illegal whereas others have the rules not stated hence remains neutral. Why can't a coin with high volatility serve as money? What makes an asset or something act as money? Apparently, it is just agreement between the parties involved in the trade. Once the buyer and seller agree to accept even a stone as their medium of exchange, the stone now gains value and turns to be their money. All cryptocurrencies can act as money irrespective of their unique characteristics. What matters here is the agreement of most of the businesses to integrate them into their payment systems.
I totally agree with you. A coin with high volatility is already being used as money in few places of the world. It is all about people agreeing to use something as exchange medium for buying and selling. The volatility has to do more with grabbing customer at present. Though crypto currencies are gaining fame on daily basis, it needs to get worldwide acceptance in order to perform money function everywhere. That is just a matter of time. That's true , the volatility is what makes lots of people not accepting it as a means of payment, just like some small scale business owner lamenting about their loses due to the instability
Due to volatility I think there are a lot of benefits of cryptocurrency, the first benefit is trading as the price goes up and down it provide more profit to the traders, the second is holding of crypto currency let we compare gold with crypto then everyone knows that holding of crypto is more profitable as compare to the holding of gold. Also sometimes the volatility of crypto proves very beneficial as payment, let a business owner accept crypto and the price goes up then it is good for the owner. 
That's true , the volatility is what makes lots of people not accepting it as a means of payment, just like some small scale business owner lamenting about their loses due to the instability
For this reason, Stability-based Crypto was born with various stablecoin. Indeed, because of Crypto volatile prices so that traders can benefit in trading. If there is no volatile price then traders cannot get the profit. However, if for a transaction, I agree that Crypto is not suitable for use as a currency. I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.
What do you think about this argument?
What do you think about this argument?
Although the argument that a cryptocurrency with too much volatility cannot be used as money has its merits but the volatility seems to matter only because we are comparing the value of bitcoin against fiat. In a scenario where bitcoin is actually working as currency, there will be need for a set of indices standardized by calculating amount of common goods that, say, 1 BTC should buy. Such an exercise would either need regulatory intervention or bitcoin adoption would have to go widespread with merchants deciding this value governed by free-market competition.
This is when volatility would not really matter.
The problem with this mindset is that, if let's say a governing body has set a standard calculation for how much goods a BTC can buy, and according to you, we'll eliminate the need of fiat so volatility won't matter. Keep in mind that bitcoin is deflationary in nature, only limited of its supply can ever be mined. That means, the fewer the supply left, the higher the value of 1BTC will be, the more it can buy. Sounds good right? Well, not really. Having a currency with too high value would just cause people tend to not spend a lot of the currency, or just hoard. Then, economy slows down, no one wants to use their money since it's too valuable.
That's true , the volatility is what makes lots of people not accepting it as a means of payment, just like some small scale business owner lamenting about their loses due to the instability
Why can't a coin with high volatility serve as money? What makes an asset or something act as money? Apparently, it is just agreement between the parties involved in the trade. Once the buyer and seller agree to accept even a stone as their medium of exchange, the stone now gains value and turns to be their money. All cryptocurrencies can act as money irrespective of their unique characteristics. What matters here is the agreement of most of the businesses to integrate them into their payment systems.
I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.
What do you think about this argument?
What do you think about this argument?
yes I think you are right with high volatility cryptocurrency not suitable for use as a currency. I prefer to use for value storage devices and investment tools. rather than as a currency. and I'm sure most crypto users think so too. and now the number of stores or companies that accept bitcoin is also small. even in my country it is not permitted to use bitcoin in payments. so far I have only used bitcoin for investment not as a currency.
I wouldn't say that cryptocurrencies with volatility can't be used as a money or payment method. They can but because of volatility the risk is high and you actually don't know exactly how much you should pay for something because the referal value is always in fiat.
That is the reason why businesses are not very willing to accept crypto as a payment because they could face potential loss and whole payment process is more complicated.
That is the reason why businesses are not very willing to accept crypto as a payment because they could face potential loss and whole payment process is more complicated.
I completely agree with Wellershoff, he says it makes perfect sense. because no one wants to take money with too much risk and never knows what its true value is.
If a whole country holds bitcoin and it is constantly volatile, then the central bank agency also cannot predict the economic situation to make decisions about their interest rates. therefore, I am completely against bitcoin becoming a common currency.
If a whole country holds bitcoin and it is constantly volatile, then the central bank agency also cannot predict the economic situation to make decisions about their interest rates. therefore, I am completely against bitcoin becoming a common currency.
Jump to: