Hacker News Reader

Comment by waynecochran | Hacker News Reader

How can a currency that is so volatile be used for actually buying and selling stuff? If you were going to put your car up for sale today and you had to set a price in bitcoin how could you possibly choose a number? Will bitcoin ever settle down to a stable currency?

View on HN

Maybe (maybe) volatility will die after this cycle. It's one theory thrown on the web.

Other than that news regarding cryptos these days should be avoided.

When the Euro was careening +/- anywhere from 20% to 100% against USD twenty years ago, everyone still managed.

“Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!”

While Euro is more stable now, it still changes real time and the system has to handle that. Same methods can apply.

> “Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!”

Six months ago, Bitcoin was literally selling for 25% of its current price (~$11,500), and about half its rise has been in the last two months.

Twenty years ago, the Euro didn't look that volatile. It bottomed out at ~70% of its previous high, and it took two years to get there.

https://fxtop.com/en/historical-exchange-rates-graph-zoom.ph...

Toggle the “Candlestick chart” on your diagram.

Though it could and did change percentage points a day, financial industry was still comfortable how to do business with ongoing volatility.

Those same mechanisms are useful here, meaning volatility isn’t the thing that precludes what Citi is discussing.

BTC's main purpose is as a store of value not as a currency. Volatility will eventually go down, think 30+ years.

> BTC's main purpose is as a store of value not as a currency.

Not if you read Satoshi’s original paper on the topic!

That was over ten years ago. Things change. And it can still be a currency, just not a good one today.

I think what many people are missing is that it may not be a good currency for small purchases but for moving very large sums of money it can be very convenient.

There are no instruments in the world today that would allow you to move from $1,000,000 up and up by fitting it easily and discretely into your pocket. Could be a smartphone, USB drive, or a san disk.

People in the west forget that like 85% of the world live in very corrupt countries where confiscation of property/wealth is real. If you want to get your money out of said countries this is the best way to do it hands down!

I don't even know what that means.

The most common store of value is cash. But it can be other things like a house, or stocks, or bonds. Anything that you can use to purchase other stuff. Key desirable store of value attributes is that it is widely accepted and doesn't lose value over time.

But for something to have "value", at some point, it can be converted to currency .. i.e., I can use it to buy something.

During a bull market you could sell the car at a discount, and during the bear market, at a markup.

FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before.

> FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before.

Following that logic, pretty much everyone that ever sold bitcoin made a mistake, given we were at an all time high last week or so.

I am not an economist, but I know that a deflation can be bad for the economy. People are encouraged to wait rather than spend because the price will be lower if you can hold out a little longer. This can become a positive feedback loop which is bad news for the economy.

I’m not sure what Bitcoin is really about, but it sure makes for good speculation and day trading.

The mining reward is not intrinsic to BTC. It can be adjusted as needed (provided 51% of compute agree.)

a majority of hashpower can enforce a softfork (tightening of rules), but has nothing to do with a hardfork (change of rules). If non-miners stick with old rules, then miners using new rules simply get ignored by everybody else.

For the past 10 years or so , bitcoins long-term volatility has consistently gone down. This is yet not as intense as 2017, for example.

This is one trend I expect will continue. Eventually if will stabilize.

You don't have to set the price in Bitcoin. Thinking in terms of opportunity cost tells us that all prices are already set Bitcoin (and every other easily fungible asset).

The RGB protocol is one attempt to allow tokens on Bitcoin -> https://www.google.com/amp/s/www.coindesk.com/rgb-smart-cont...

Another idea is Discreet Log Contracts https://suredbits.com/blog/

That is a great question. There are already people that are selling airplanes for bitcoin. See here: http://cubcrafters.com/carboncub/ex/configure

prices are set in USD not BTC, they just accept BTC.

Those are very clearly priced in USD and not in BTC.

You advertise the price in the fiat currency you want.

Bitcoin is only used in transit.

You just kicked the can one level down the road if you take the bitcoin payment ...

Okay this may come off as naive, or even completely wrong, so give me a break but...

What if you tied the price to a trade able good. Eg: $x USD in BTC. While it completely negates the idea of BTC, allows you to list an item for sale at a stable value.

wide acceptance would MAKE it stable

As a seller you'd simply denominate the prices in USD, keep some percentage of the btc as it is very likely to appreciate and convert the rest to USD as soon as possible to mitigate fluctuation risk.

As a buyer, you'd just purchase btc in the moment preceding the transaction or spend from your own hodlings if it seems like a good moment to reduce exposure.

Volatility is not that big of a deal.

Reply on news.ycombinator.com