Topic: Less Volatility Is Needed? - page 3. (Read 1908 times)

How could low volatility be imposed?
Only by external forces, that is contrary to free market and to Bitcoin, and would kill it.

Or what is the alternative?

Less volatility will come with time. Please keep in mind that that this market is still in it's infancy so with time more money will start flowing in that will naturally diminish the volatility.

Bitcoin hasn't spread evenly to many people around the world, and this's why most bitcoin holders still make it a commodity. But later, I also realized that the volatility bitcoin will decrease so its status can be like fiat.

Yep, true. Definitively a dilemma. The idea I outlined above ("merchants backing Bitcoin") would provide a solution, but it would need massive adoption until it has the desired effect on volatility. So it's a chicken-and-egg problem and I'm still thinking about ways to solve it


For now, the basic "volatility protection system" are obviously Bitpay-like payment processors, but they're centralized and not very "bitcoinic" (ideologically-wise).

Another way I have read somewhere is a contract-for-difference which the merchant could enter with another party, for example, a Bitcoin trader. The merchant would pay the speculator an "interest" rate, while the Bitcoin trader would guarantee a minimum exchange rate to the merchant. Essentially that would be pretty similar to Bitshares' BitUSD. To do this "decentrally" on a blockchain (without a "centralized" provider like a bank) however needs a pretty powerful smart contract language like Ethereum's, and the interest rate would probably be pretty high because the trader would have to offer a high collateral in the case a crash happens. So BitPay-like centralized services very likely would be less expensive.

I think this has become a cycle. There are many who are getting into Bitcoin because it can suddenly surge in value making its volatility so high which in turn make it more attractive to investing type of people. Volatility is a part of the many reasons why Bitcoin caught the attention of the many and can be the same reason why many merchants are not yet accepting Bitcoin as one of the modes of payment.

I have been saying this many times that there should be a way for merchants to get protected from its volatility so we can all promote Bitcoin to them. Correct me if am wrong but there seems to be ways now for merchants to accept Bitcoin and not to worry more on its volatility.

There should be more and more people and businesses that must accept Bitcoin as form of payment so we can reach the mainstream much faster. An infrastructure must be provided for them so they can be encouraged to be a part of the Bitcoin movement. 

In my opinion volatility is a part of the financial industries, price changes everywhere in the market business are not stable. Consumers are findings way which they can gain and benefit more, some business closes some rises. Which is why we take risks investment we make it is a part of the decision you have to make acceptance and analysis.

My stance on this topic is: We should seek ways to reduce volatility, but we won't completely erradicate it because of Bitcoin's inherent inflexibility to demand fluctuations.

I partly disagree. Bitcoin holders have many possibilities to intervene in Bitcoin's price (see below). However, the deterministic supply scheme that governs Bitcoin since Satoshi installed it makes impossible a real "peg" to a currency or commodity, because it would never work to totally equilibrate the (real) demand fluctuations.

But what can be done is to try to limit "irrational" volatility. That is, basically, panic selling and FOMO buying. Here I have often proposed a system where merchants that sell goods and services for Bitcoin could opt to back the Bitcoin price for a day or a couple of days. This would be a win-win system because if their clients can get a discount, the merchants' sales would increase - in a crash, their losses would be outweighed very probably by a drastic sales increase so they benefit especially if they sell goods with low marginal costs.

But as long as most of the Bitcoin users are in as "investors" and want to ride a bullish wave, then "use as a currency" will be marginal and such ideas will have low support (I agree with @pooya87 here).


Here you're contradicting yourself a bit: If Bitcoin is only useful for "instant transactions" and volatility should be "normal", why should merchants then accept it without fiat gateways? Who would hold the bag? That only makes sense for merchants if there is a kind of "volatility-reducing" plan behind it, like I outlined one above.

Volatility is what make us money. Volatility is attracting value investor. And as bitcoin grow we can allow more development while less volatility. Bitcoin Rocks

Volatility is needed for exponential growth.

Do not worry maybe you lost the profits of the beginning of the year but if you keep holding you are going to be able to get the profits of the next yearn and of all the yeas in which you keep holding, the longer you hold the better your results that is why it is common to recommend to other people to hold for as long as possible.

I'm afraid Bitcoin volatility is something that you can't avoid and can't influence on so the best thing to do is to accept it. Afterall, on volatility traders make their profit so what would Bitcoin be without volatility. Some users don't like that and think that volatility and pumps and dumps are arranged by whales but I think this is not true, it's simply how Bitcoin technology is functioning.

i am accepting bitcoin volatility as a normal thing because if we talk about economic law, then its should related with supply and demand. and if supply is less than demand, then the price will be up and vice versa. but if bitcoin is accepting in many country and each people have bitcoin, i think the volatility can be less because bitcoin will be something that a "must have" for them like the money. maybe if we are in this situation, then we can see bitcoin price is not always change the price and maybe it will be sideway for a long time like for example if halving is come that will make the price is down a little and then going to go up.

Not necessarily. Bitcoin can still be mainstream with all this rollercoaster moves. Every day new people join, newspapers write it, tv programs show it, Bitcoin is already in the beginning of mainstream phase. Volatility is a part of this business. If more people buy Bitcoin then we can see less volatile market. It's not need, it's conclusion.

still going to be a long time before bitcoin becomes less volatile so much speculation on how high the price can go

Being decentralized makes btc known, if it became stable there were no thrill on it,it will be like a noral coin so let's just learn to adopt it's volatility, it's the risk we need to face to wait when it vaues pump.

I don't think we will see stabilization within 1% range anytime soon.

Bitcoin being a decentralized currency,volatility is its basic nature.As there is no central authority to control the bitcoin price,its price usually fluctuates.Bitcoin exhibits its original value.Bitcoin's price increases or decreases with increase or decrease in demand for bitcoin.Its the biggest issue for which retailers do not come forward to accept bitcoin as payment.But we saw in japan after bitcoin legalization,retailers just left the volatility issue and came forward to accept bitcoin.So,in future,if bitcoin gets legalized,volatility would not be an issue for retailers.

Volatility is something common because bitcoin is decentralized and volatility is the one that makes the traders got profit, but if the volatility is too high, it will be hard to be adopted and sometimes the the bitcoin volatility is too high and people become hesitates to used it for transaction, less volatility will be good for bitcoin to be accepted as transaction currency

The volatility is a joke. It makes Bitcoin look like a sh!tcoin that is constantly pumped and dumped by whales.
10% moves in a day are standard, that cannot be if Bitcoin actually wants to be used seriously.

I thought that by now, with such a high market cap, that the volatility would be greatly reduced, but if anything it is worse than ever!
I look at the price, it is $4400, I look back 10 mins later, it is $4050!  What has happened I think, oh nothing, it's just Bitcoin.  When the 10% moves become 1% moves, I'll be happy.

For vendors yes, but for traders is a very good oportunity to make profit. If you have been buying/selling BTC inside an exchanger in the past 24hs you may be able to earn a couple of hundreds, so is not that bad at all.