Topic: What does it take for bitcoin to become stable (Read 915 times)
When the dollar crashes you will be jumping to Bitcoin's current stability.
Like D&T said larger market...
That is another problem with the bitcoin economy, it is hard to be fully immersed in the actual economy. The only way to solve that is as DeathAndTaxes said: More adoption, more services, and more merchants.
Or a local Bitcoin economy.
I think that's the wrong question to ask.
A Bitcoin today is worth about the same as a Bitcoin from 6 months ago. There are roughly the same Bitcoins out there compared to back then. What's unstable is the link between Bitcoin and the fiat currencies. The question shouldn't be how to make that link more stable. The question should be how do we sever that link? And the answer to that is widespread use.
Imagine a situation where you can earn your salary in Bitcoins, and that for everything you could possibly want to buy, you could pay for it with Bitcoins. At that moment, the link between Bitcoin and the USD (for example, could be Euros or anything) would become irrelevant to you. Just the same as the ratio between the USD and the Chinese Yuan is irrelevant to the average American. 1BTC could be worth a thousand dollars, or ten thousand dollars, it doesn't matter. The fact is that you can trade the 1BTC for the same product regardless of what happens with the BTC:USD ratio.
A Bitcoin today is worth about the same as a Bitcoin from 6 months ago. There are roughly the same Bitcoins out there compared to back then. What's unstable is the link between Bitcoin and the fiat currencies. The question shouldn't be how to make that link more stable. The question should be how do we sever that link? And the answer to that is widespread use.
Imagine a situation where you can earn your salary in Bitcoins, and that for everything you could possibly want to buy, you could pay for it with Bitcoins. At that moment, the link between Bitcoin and the USD (for example, could be Euros or anything) would become irrelevant to you. Just the same as the ratio between the USD and the Chinese Yuan is irrelevant to the average American. 1BTC could be worth a thousand dollars, or ten thousand dollars, it doesn't matter. The fact is that you can trade the 1BTC for the same product regardless of what happens with the BTC:USD ratio.
In addition to the other comments you are less likely to notice changes in the value of currency if you are fully immersed in the economy. That is another problem with the bitcoin economy, it is hard to be fully immersed in the actual economy. The only way to solve that is as DeathAndTaxes said: More adoption, more services, and more merchants.
Nope. It just needs to be much much much bigger.
Compare a chart of BTC, Silver, and Gold.
BTC is $1.5B in total valuation.
Silver is ~$30B in total valuation.
Gold is $7,000B in total valuation.
There has never been a small low volatility open market. Not once, not ever. It just isn't going to happen. More adoption, more services, more merchants all make the market larger. With larger markets come more market depth. When BTC is valued at ~$30B I would expect to see it have volatility similar to silver (still pretty volatile compared to major currencies but significantly less than it is now). When it takes $50M to move the price 10% the price probably won't move 10% as often.
The goal of some to have a ultra-tiny valuation and low volatility is just a pipe dream. It won't happen ... ever.
Compare a chart of BTC, Silver, and Gold.
BTC is $1.5B in total valuation.
Silver is ~$30B in total valuation.
Gold is $7,000B in total valuation.
There has never been a small low volatility open market. Not once, not ever. It just isn't going to happen. More adoption, more services, more merchants all make the market larger. With larger markets come more market depth. When BTC is valued at ~$30B I would expect to see it have volatility similar to silver (still pretty volatile compared to major currencies but significantly less than it is now). When it takes $50M to move the price 10% the price probably won't move 10% as often.
The goal of some to have a ultra-tiny valuation and low volatility is just a pipe dream. It won't happen ... ever.
An entire local community must use BTC for its primary currency. It could be a block in NYC or a village in India. Also stable futures markets come before stable markets.
I believe (and I think a lot others do as well) that bitcoin can't function as a realistic currency option for most people until the price of bitcoin becomes stable. The reasons why a currency needs to be stable to be used as a currency are obvious and already well documented but my question is HOW do we get the price of bitcoin to become more stable.
Is there something the community can do ?
Is there something the community can do ?
Jump to: