Topic: How To Create Price Stability (Read 1833 times)

For that btcwill need to find his own value,that value will be represented by btc coins and priced in fiat money
It will deflation and inflation but gap will be small,with his own value btc will be independent from fiat money

This.

Uncertainty in the value of something naturally leads to price volatility. Bitcoin is going through a natural process of price discovery. For this reason the market cap is small and not many people have come to the realizations that us early adopters have. It takes time! The smaller the market cap, the more a single buy/sell order can affect the price because it's simply a bigger percentage of the whole market. Imagine if the market cap was $5 Trillion. It's hard to imagine it being volatile at that level because for that to happen we'd have to see huge worldwide adoption and usage. At that point there would necessarily be extremely high confidence in the Bitcoin system and therefore very little volatility.

Yeah or most likely never. Since the whales would not want to let it go. So they keep on accuming more and more. if you had a golden goose you wouldn't let it go too right?

ya i guess, but bitcoin has been gaining alot of publicity this year. who knows maybe itll become more mainstream.

looking forward to bitcoin getting more popular in 2016

The more bitcoin in more hands makes it harder to manipulate and so the whales can't do anything to manipulate the price.

I am afraid it will be years before this will happen though.

im my opinion stability will come if there a lot of people trading bitcoin, that way manipulating the price would be extremely hard and it would bring stability to the bitcoin economy.

The only way to achieve this is to have the whales stop with their games.

They have been manipulating the price so long now, it is harming bitcoin. I can't believe they don't understand that. Because of them the currency is slowly yet efficiently corrupted..

I agree with the sentiment of the last posts. It will never be a currency without fluctuation. Like any other assets it is used for speculation.

Investors buy bitcoin and hold onto it because they speculate that the price of their USD f.e. will come in a decline. Thus they want to protect the value of their money and buy bitcoin which creates a price increase.

And so this currency is and always be volatile, which is perfectly normal...

It is far easier to stabilize price in a crypto as you can access all transactions
Also no need to centralize to stabilize. There are stable structures that occur in a decentralized way
But it will need a change in the algo. People are reluctant on that part.

Yeah, I don't think can we can have a control on bitcoins when it comes to price stability, the factor of price stability is external and no one has control over it, we just need to go away with the flow and hoping that the value of bitcoins will keep on increasing, even if the adoption level goes high it is very difficult we cannot be sure that price would be stable.

There are also Tether currencies, new assets that move on the bitcoin blockchain through the open source Omni Protocol and 100% backed by traditional currency held in reserves, therefore, 1 tether USD₮ will always equal 1 USD (1 EUR₮=1 EUR, 1 JPY₮=1 JPY).

Price stability is achieved trough adoption. The more people use this technology the less volatile it is. Bitcoin needs to be spread around like butter.

The only reason of price un-stability is its decentralization so that at whatever people like to sell their coins they can do it. Price will be less volatile if its uses get increased after much of the minable bitcoins get mined.

The world events will directly the price of bitcoin. The more people using it, the more bitcoin's price is affected by the world events. One way I can think of is well the block reward is zero.

In my opinions I think no one can predict where the price will be in the next day not after a week or months. I hope will see if demand increase before this Christmas.   

Stability will come with time, thats the key, in last years bitcoin grow up a lot but is just a little bit portion of what bitcoin will be in the next 5-10 years.

Thinking on it, i believe that bitcoin price stability will come when people start to adopt it in mass, the more people using it -> the more stability that we will have, i hope so...

No one can control bitcoin for now, moreover in future.
BTC price can be stable only if BTC get trusted from a lot people around the world.
The reason why bitcoin price very liquid for now (maybe like games money). It's because there are too few people hold and using bitcoin for now.

i dont know what makes the price going up or down.
my hope is the price is stable and rises slowly 

In my opinion
Bitcoin never can be stable at long time
we know bitcoin is decentralization, so no person can control it

Probably eMunie is something for you. It will going public in some months time and the target there is always to get a stable price. At least they try it.
In general I don't believe in a concept of fixed prices.

It is nearly impossible to stabilize bitcoin price if it stays decentralized.
And if you centralize it to stabilize, it would lose all attraction.

I agree to this point ,when there is too much movement in the ecosystem it affects demand and supply. That causes the sudden price hike and fall.

impossible to make bitcoin prices to be stable, the big players can make bitcoin prices to rise quickly and fall quickly, we also do not know that the economic crisis in one country can make bitcoin be increased or not

Pretty much every fiat currency is controlled by their native governments.

This. There is no true way of stabilizing the price of bitcoin unless you modify bitcoin altogether. It's better to leave it as it is, pegging it to a commodity goes against the idea of decentralization.

Maintaining stability will have both advantages and disadvantages. Like the possibility of losing your money due to the price falling will be minimal but this means that you will not earn more bitcoins if the price rises. I dont want stabilization though

"stability" not required fixed price. Situation where in 10 days price go from 250 to 500  and back, it is not good for currency except speculators.
example if someone who's take a loan Oct 28(price $300), and he must pay back Nov 11($470). 



definitely more bitcoin user will improve the stability of prices, and much higher price for BTC reduce the possibility of manipulation

In my opinion to increase bitcoin stability we need more bitcoin users, as much holders less users could manipulate its price. We need more users and time.

I had discussed such a concept here
https://bitcointalksearch.org/topic/m.4389175

there will always be large holders. you can't change the fact that some people are simply wealthier than others. stocks are not different. you have a lot small traders, but also banks in the role of a whale.

Less whales, more supporters (holders) would be a great start.

Part of the price volatiliy is also the holders though, many weak hands whom sell too fast.

If you think you can achieve bitcoin price stability by creating some restriction, limits artificially impose some regulations you are wrong.
It is a natural process and it cant be created in bitcoin decentralized environment, some people would always disagree and market is not so big yet.

you simply increase the market cap, but this isn't soething that one man only can do, unless we are talking about a very rich guy that is willing to waste all his fortune on bitcoin, to see, then, a big dumping from the other

it will be possible slowly with adoption nothing more

Seems I didn't read all the way through your post before commenting, so let me address this second part.


Logically, this makes no sense. You're talking about pegging an alt to Bitcoin, which would still trade freely relative to USD (which it should). This would do nothing to create stability in Bitcoin. By pegging an alt to Bitcoin, all that would do is create volatility in the alt that exactly matches Bitcoin's volatility relative to USD. The exchange rate of the alt to Bitcoin would always be constant, but that's a worthless attribute because the alt's volatility relative to the USD would always be the same as BTC's volatility to USD. This alt would serve absolutely no market function since it only does exactly what Bitcoin does, and therefore there is no reason for anyone to use it.

Agree,

Price fixing bitcoin = stupid idea

What you have just described is a centralized digital currency. This is the antithesis of what Bitcoin was founded to be, which is decentralized. On top of that, not only are you proposing centralization, but price-fixed centralization. You have basically just advocated for Bitcoin to work like Chinese government.

Bitcoin's price is incredibly hard to control due to its protocol of halving which affects the supply as well the demand for bitcoin which also leads to the price changes. Stability in bitcoin price? If you really want that then wait for a digital currency created by Governments with the bitcoin's technology of blockchain!

I don't understand why do you actually want price stability. Bitcoin can be spent in pieces. If there is a method to maintain stability then bitcoin will be similar to dollars. We don't want that to happen. I don't want bitcoins to be multiplied.

I have heard by many very prominent sources that people are looking for way to enforce price stability on bitcoin. This would be a BIP that pegs the value of bitcoin to some commodity like oil or some stable currency like the USD, so that whenever the value of bitcoin goes up relative to what it is pegged to, more bitcoins are created to balance it out, thus stabilizing the price. The argument is that this will make bitcoin a viable unit of account, eliminate price volatility, and thus make bitcoin more usable, and encourage people to use it rather than to hoard it.

If 1 BTC = 1 USD in 2010, and 1 BTC = 500 USD in 2013, the proposed solution would be to "rebase" bitcoin, by creating inflation of bitcoin at x500, so 500 times more bitcoin are in circulation in 2013, and therefore 1 BTC still is equal to 1 USD, and the price of bitcoin is stable.

The problem I have with this is that, in the case were the Bitcoin supply is fixed like that of Gold, the end users, the holders of bitcoin, the common man, the poor, the middle class, received an increase of value of their bitcoin by 500x, because in three years there Bitcoin is now 500 times more valuable, and their purchasing power therefore has increased by that much.

On the other hand, by "rebasing" the supply, you transfer wealth and value from the end users, the holders of bitcoin, the common man, the poor and the middle class, directly into the hands of whoever gets the newly created bitcoin, via the tax of inflation. The bitcoin user then would have seen a 500x decrease in the value of their bitcoin in 3 years because their bitcoin would have been 500 times less valuable, and 500 times less purchasing power.

I view bitcoin as the "Gold Standard" of crypto currencies, so that all other crypto currencies are valued based on their value in Bitcoin. We need a "Gold STandard" of crypto currencies, and thus we need Bitcoin to remain scarce. It is this scarcity that makes bitcoin such a good store of value, just like the scarcity of gold makes it such a good store of value. To enable inflation in order to achieve price stability would come at the cost of Bitcoin's capabilities as a store of value.

The solution to the problem then is not to fundamentally change the Bitcoin protocol to allow for inflation and more than 21 million bitcoins, but rather to create an alt coin that is pegged to the price of Bitcoin in the same way as proposed, thus avoiding drastically altering the mission statement and vision of Satoshi for Bitcoin to mimic the qualities of Gold. The alt coin would produce more coins or reduce coins according to the price of Bitcoin, creating inflation and deflation to create price stability in that coin, which would be a unit of account because the resulting price stability, but not a very good store of value.

The limited supply, and fixed supply of bitcoin is fundamental to it's Store of Value property which serves as the cornerstone of all alt coins. all alt coins rest upon the value that is stored in Bitcoin. As soon as you remove the limit, and increase the supply, you compromise the store of Value property of bitcoin.

We can have price stability in an alt coin, and in fact, this need of price stability is a huge opportunity for someone looking to create a useful alt coin, simply peg the value to the price of bitcoin and inflate or deflate accordingly. But the cost of getting rid of the 21 million limit on bitcoin is far too much to justify going through it. The scarcity is a necessary part of being the "Gold Standard" of crypto currencies that Bitcoin is.