Yes BTC in a BTC economy, don't worry so much about what the fiat does. As long as BTC is climbing in value the risk is in holding dollars as I see it.
As for the thread topic it looks like it has settled down around 6-6.6 for a while. Wouldn't be surprised if it dipped down into the 5's with the euphoria gone though.
5 is the new 4, then in 6 months its 6.
Topic: Price stickiness at $5 USD/BTC? (Read 9742 times)
USD isn't stable - it depends on how do you measure its stability. If you look at gold or oil prices USD is not that stable. It's only retail price tags which are stable. Wholesale prices (especially on exchange traded goods) vary.
This is quite true, and before the Euro a great many businesses faced constant 'currency risk' of changing exchange rates between the time that a deal was struck and the time it was paid for. The real issue is that bitcoin isn't big enough to buy the things one needs for a complete economy without said currency risks. When I can buy gas & groceries (at a competitive cost) locally, and pay my electric bill online, with bitcoin; the voltility of the exchange rate will become irrelevent.
right on, moonshadow.
But why the quotes around $30 spike? Are you suggesting that the spike didn't happen, or am I misunderstanding your use of quotes? 
There's no special meaning, just quoting the subject of the stories. 
I doubt the exchange rate will ever be irrelevant, but I can see it being functionally irrelevant to some individual members of the economy. Obviously there's exchange rate risk between any two stores of value, based on supply, demand, and perception. However, the USD is very stable by any relevant measure. It is stable in a way that takes efficiency gains out of the accounts of those who store their wealth in it, but it is stable.
The US $ isn't stable relative to gold, oil or even the Big Mac index. The perception of stability is relative to your base standard. For Americans that standard is the US dollar itself, so of course most prices will appear fairly stable in a currency relative to itself, all the while the average guy blames (Bush/Obama) for the falling value of his house or the rising cost of gasoline. Compared to gold, or even silver, the cost of a gallon of gasoline is roughly the same, if not a bit cheaper, than it was in the 1960's.
I doubt the exchange rate will ever be irrelevant, but I can see it being functionally irrelevant to some individual members of the economy. Obviously there's exchange rate risk between any two stores of value, based on supply, demand, and perception. However, the USD is very stable by any relevant measure. It is stable in a way that takes efficiency gains out of the accounts of those who store their wealth in it, but it is stable.
USD isn't stable - it depends on how do you measure its stability. If you look at gold or oil prices USD is not that stable. It's only retail price tags which are stable. Wholesale prices (especially on exchange traded goods) vary.
This is quite true, and before the Euro a great many businesses faced constant 'currency risk' of changing exchange rates between the time that a deal was struck and the time it was paid for. The real issue is that bitcoin isn't big enough to buy the things one needs for a complete economy without said currency risks. When I can buy gas & groceries (at a competitive cost) locally, and pay my electric bill online, with bitcoin; the voltility of the exchange rate will become irrelevent.
USD isn't stable - it depends on how do you measure its stability. If you look at gold or oil prices USD is not that stable. It's only retail price tags which are stable. Wholesale prices (especially on exchange traded goods) vary.
Inflation pushes you to buy now, deflation pushes you to save and buy later.
How big is this push/incentive? Probably depends on how big is the inflation/deflation, what products/services we're talking about..
I find it fascinating to think about these things, does anybody knows a book that discusses the implications of a deflationary economy?
How big is this push/incentive? Probably depends on how big is the inflation/deflation, what products/services we're talking about..
I find it fascinating to think about these things, does anybody knows a book that discusses the implications of a deflationary economy?
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To the vast majority of people world wide, USD is very stable and BTC (to the extent they even know of BTC) is very volatile.
This is because USD IS very stable and BTC IS very volatile. While in a long-term monetary base sense, BTC is more stable, the current market valuation of BTC is incredibly volatile because it reflects the current BTC marketplace (small). In a long-term sense BTC are likely incredibly undervalued, but if anything that means that we should expect even more volatility in the future as the BTC 'GDP' grows and the market responds.
-bgc
I meant the stability comment to be more for the crowd here that refuse to admit any validity to USD at all. I, personally, view BTC as a supplement of sorts to USD and not a replacement (but that's a different conversation).
But yes, they very nature of BTC makes it volatile in these early years. It will be very interesting to see how the markets respond to the first block reward decrease
Quote
To the vast majority of people world wide, USD is very stable and BTC (to the extent they even know of BTC) is very volatile.
This is because USD IS very stable and BTC IS very volatile. While in a long-term monetary base sense, BTC is more stable, the current market valuation of BTC is incredibly volatile because it reflects the current BTC marketplace (small). In a long-term sense BTC are likely incredibly undervalued, but if anything that means that we should expect even more volatility in the future as the BTC 'GDP' grows and the market responds.
-bgc
You'll know that BTC is viewed as stable in the eyes of the main stream when news stories about BTC stop referring to the $30 dollar spike and subsequent crash in the first paragraph or two.
Well the "$30 spike" stories are only going to stop after the price has been stable above $30 for a while.I'd disagree. I think that, while it might get mentioned, the spike will become sort of a side-story after the price stays stable for a good length of time. But, since we're talking about a future situation that cannot be resolved through math/science that'll just have to rest on a matter of opinion.
But why the quotes around $30 spike? Are you suggesting that the spike didn't happen, or am I misunderstanding your use of quotes?
You'll know that BTC is viewed as stable in the eyes of the main stream when news stories about BTC stop referring to the $30 dollar spike and subsequent crash in the first paragraph or two.
Well the "$30 spike" stories are only going to stop after the price has been stable above $30 for a while. The question is how a layman measures "fluctuation".
If he comes today 1 hamburger = 1 USD, and tomorrow 1 hamburger = 1 USD it means for him USD is stable. In this layman sense USD is stable against almost everything.
Is it possible to sell hamburgers today at the same price as yesterday if we use BTC? Will it be good for seller? for buyer?
If he comes today 1 hamburger = 1 USD, and tomorrow 1 hamburger = 1 USD it means for him USD is stable. In this layman sense USD is stable against almost everything.
Is it possible to sell hamburgers today at the same price as yesterday if we use BTC? Will it be good for seller? for buyer?
Are you suggesting that we use the Big Mac index as measure of volatility? Though I still prefer Pizza Purchasing Power: how many pizzas you can buy for 10000 BTC at a given point in time. It looks like we're up a few pizzas this week.
He was using it as an example. To the vast majority of people world wide, USD is very stable and BTC (to the extent they even know of BTC) is very volatile. It's easy for people on these forums and others like it to start thinking as if everything they know is common knowledge.
You'll know that BTC is viewed as stable in the eyes of the main stream when news stories about BTC stop referring to the $30 dollar spike and subsequent crash in the first paragraph or two.
The question is how a layman measures "fluctuation".
If he comes today 1 hamburger = 1 USD, and tomorrow 1 hamburger = 1 USD it means for him USD is stable. In this layman sense USD is stable against almost everything.
Is it possible to sell hamburgers today at the same price as yesterday if we use BTC? Will it be good for seller? for buyer?
If he comes today 1 hamburger = 1 USD, and tomorrow 1 hamburger = 1 USD it means for him USD is stable. In this layman sense USD is stable against almost everything.
Is it possible to sell hamburgers today at the same price as yesterday if we use BTC? Will it be good for seller? for buyer?
Are you suggesting that we use the Big Mac index as measure of volatility? Though I still prefer Pizza Purchasing Power: how many pizzas you can buy for 10000 BTC at a given point in time. It looks like we're up a few pizzas this week.
I'm too but average people don't give a f about inflation. All that they know is that price tags are not supposed to change. This feature of bitcoin slows its adoption.
Im for a currency that the government cant steal through inflation. I short fiat at any opportunity by purchasing bitcoins and shares on glbse.
The question is how a layman measures "fluctuation".
If he comes today 1 hamburger = 1 USD, and tomorrow 1 hamburger = 1 USD it means for him USD is stable. In this layman sense USD is stable against almost everything.
Is it possible to sell hamburgers today at the same price as yesterday if we use BTC? Will it be good for seller? for buyer?
If he comes today 1 hamburger = 1 USD, and tomorrow 1 hamburger = 1 USD it means for him USD is stable. In this layman sense USD is stable against almost everything.
Is it possible to sell hamburgers today at the same price as yesterday if we use BTC? Will it be good for seller? for buyer?
It's good to hear common sense and real-life experience on these forums. Too many people here think that everyone in the world thinks MARKETS!RALLYS!GOLDDOWNDOLLARUP! all the time. People want stability and predictability in their financial planning.
People will have a hard time, then. Stability against a wildly fluctuation USD?
I don't necessarily agree with you. I for one have been operating a small bitcoin marketplace in the last few months and am planning on expanding operations soon. I always do an immediate cash out (about 90%, the rest I leave for investment). Yes it isn't as easy as accepting cash only, but you have a HUGE almost untouched market to deal with. Being a miner myself, there are times I wish I could just grab something quick with BTC, instead of waiting for everything to transfer to my bank account (or taking a percentage hit by trying a more immediate option). Also, if you offer products in BTC you can get the impulse buyers and people that haven't really connected the BTC exchange rate to actual USD. All they know is they're making money by mining and want to spend it. You have to realize that most people on this board and in this thread really care and pay attention to the exchange rate, but there are many people just getting into this and do it casually that don't really pay that much attention.
I have the feeling that most people with any BTC have some passing knowledge of the exchange rate. We're still at the point where every news article and almost everyone on this board discuss BTC in direct relation to "fiat" money. And would you spend 10 BTC on an item knowing that there is a chance that you could get the same item for only 9.5 or 9 BTC tomorrow?
It works both ways, for sure, and I'm not arguing that BTC isn't viable right now and that there isn't a market for BTC buying.
I'm arguing that it'd be better if prices were more stable.
No son, a system that requires you to immediately move around your money and make conversions and pray to the god on Mt. Gox that prices don't drop .50 USD in the next 10 min is really actually a huge headache. Of COURSE you're right that BTC as a system is way way better than Visa, etc. Don't ever believe I argued that, son.
But it'd be BETTER x2 with stability. I really can't believe that this point would cause you to flip out so much.
EDIT: And that's from the merchants point of view. As BTCCHINA pointed out, people like stability. No one is going to want to spend BTC on anything if there is a high chance that price go down/BTC value goes up by 10% within the hour.
But it'd be BETTER x2 with stability. I really can't believe that this point would cause you to flip out so much.
EDIT: And that's from the merchants point of view. As BTCCHINA pointed out, people like stability. No one is going to want to spend BTC on anything if there is a high chance that price go down/BTC value goes up by 10% within the hour.
I don't necessarily agree with you. I for one have been operating a small bitcoin marketplace in the last few months and am planning on expanding operations soon. I always do an immediate cash out (about 90%, the rest I leave for investment). Yes it isn't as easy as accepting cash only, but you have a HUGE almost untouched market to deal with. Being a miner myself, there are times I wish I could just grab something quick with BTC, instead of waiting for everything to transfer to my bank account (or taking a percentage hit by trying a more immediate option). Also, if you offer products in BTC you can get the impulse buyers and people that haven't really connected the BTC exchange rate to actual USD. All they know is they're making money by mining and want to spend it. You have to realize that most people on this board and in this thread really care and pay attention to the exchange rate, but there are many people just getting into this and do it casually that don't really pay that much attention.
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