Topic: If you belive that Bitcoin is over and done with... (Read 5597 times)

  funny!

That's the same as not having a BTC position - which doesn't help with hedging. The point of hedging a position is to pay a small premium (like insurance) against adverse moves, without compromising any beneficial moves. eg. owning an option to sell close to your buy price prevents substantial loss if the price drops, but you still gain if the prices rises. You only lose whatever the option price would be.

Granted, in this volatile a market the option prices would be very high (if they existed).

if you are concerned about btc to usd rate fluctuations, you can hedge your position temporarily staying in usd
i.e. check how silkroad protects it's sellers from exchange fluctuations

As much as I "enjoy" the ups and downs of the Bitcoin ride, I really do hope it stabilizes soon.

But how do you hedge for Bitcoin volatility. There isn't any functional options or futures markets yet. I know there's talk about it but when I went looking they weren't functional. You would need something that can offset Bitcoin price changes.

Some people, who are used to dealing in multiple currencies, don't even think that matters. While $/€ might not move more than 20% over a few months, you still have to hedge for currency volatility just as with Bitcoin.

This subtlety matters though. Some people claim bitcoin is doomed if the exchange rate drops any more. In reality, though, all that matters is that the price stabilises somewhere. Whether that's at 0.01 USD or $1000 USD makes little difference.

hope not, I've got .80 Btc stored there

Wow. Now I want to start a thread like this. http://payb.tc/jeremy

Done.
You should have received a whopping 0.95 BTC. (It was all I had )

If you know of such a mechanism, which

• can be enforced easily by each node (bitcoin's security system)
• does not depend on a centralized data source (exchange rate eg.)
• is not easily influenced by people who want to take advantage of it (eg. rate/size of transactions in the block chain)

then I want to hear it.

Sometime the subtleties of the English language mean jack shit in the "real" world.

Point taken though.

I laugh my socks of at all the would be central bankers here, a whole squad of timmy's and benny's in waiting.
Early day adoption of Bitcoin has proved to be painfully volatile and may be for some time yet. This is a child concept struggling to learn to breath in and out regularly. Miners will stop mining people stop buying and these swings will recur to a large degree in the growth of this child concept of bitcoin. Is bitcoin going to die... NO ..but yes it may grow much slower than many imagine...

The only day i will walk away is when you start central planning..

AMEN

This doesn't say price itself matters, just that price stability matters.

As both a merchant and investor in the Bitcoin economy, the price DOES matter.

I am only exposing one of my 3 businesses to Bitcoin.

When the price was above $16 US, I offered 0.5 BTC per kg of my product (beef) (10% discount)
When the price was above $9 US, I offered 1 BTC per kg of my product

Today, I changed the price to 2 BTC per kg.
With a shit house derivatives market, I MUST keep changing my BTC price.  That pisses me off no end.

Personally, I think I BTC = 1KG of prime beef, but my bottom line will not take it.

The price discovery phase is still in motion and I expect something as radical and AWESOME as bitcoin will require at least another 6-9 months for the real trading to begin. 
Around about March 2012 which almost ties in nicely with the reward reduction to 25BTC.

+1

+1
Let's get on with building a better currency and dump the "investors" who keep watching the daily price and imagining they'll soon be rich. Send them back to Wall St. What Bitcoin needs is price stability.

What we still need is easier ways to get in/out of Bitcoins worldwide. I'd like to be able to send BTC to someone in another country without them having to transact back into a (US?) Bank and withdraw thru their ATM. We need a worldwide network of walk-in exchanges much like you can walk in and convert US$/YEN/BAHT/...whatever just about anywhere you go. The biggest boost would be for agents like post offices to handle BTC like they do Western Union/Moneygram or similar transfers. Can you imagine worldwide instant money transfer without ripoff 5-10% fees?

Freaking priceless and right on the money, errr Bitcoin 

Spot on.  The role of a currency is to be both a long-term store of value, and a short term medium of exchange.  To be a store of value it needs to have stable prices, and to be a medium of exchange it needs to be easy to use and exchange.

If it's worth 0.01 US cent, it doesn't matter, as long as it retains that value over a long period of time and people use it in exchanges.

Right now we have neither:

The money supply is inflating, last I checked, by around +37% a year (as of a few days ago; obviously that number will converge to zero as the months go by, but 37% inflation is still significant).  At the same time, Bitcoin is getting all kinds of positive and negative publicity, resulting in fluctuating demand.  Right now we're in a deflationary period as a result of all of the bad publicity.  This rapid inflationary pressures and fluctuating deflationary pressures means the currency can't hold a stable price.  Security issues are also at the forefront as no significant third-party solutions have come forth and I haven't seen much commitment from the developers.  In the future when inflation dies down and demand stops fluctuating so wildly, we'll see significant price stabilization.

As a medium of exchange, it's also weak: there's little to actually buy and the services available to facilitate those transactions are untrustworthy at best, outright frauds at worst.  Basically what we have is a bunch of lone techies writing code in their basement, not professional companies creating products; this does not mean we won't have reliable facilitators in the future, but the fact is we just don't have any now (in my opinion). 

Bitcoin isn't useful as a currency now.  The most investment and focus by third parties is in BTC mining and exchange right now, as is to be expected and as is necessary, as developed mining and exchange is absolutely necessary for the short, medium, and long term prospects.  When the economy has developed enough to allow convenient BTC purchases in supermarket stores I think Bitcoin will be just about 'ready' to move from a mining-based, long-term investment to an exchange-focused currency.

I think you've misunderstood Bitcoin. Completely.

This price of BTC is irrelevant to its function as a currency. If you believe it to have been an investment, that's your gamble.