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Comment by hoverbrain | Hacker News Reader

The hourly price swings of Bitcoin is far too erratic to use it for mom and pop retailers to price and sell basic goods, or say, a Tesla. The price of an item has to be set in a stable currency, like the good old dollar, and only at the moment of purchase can the conversion between bitcoin and USD can be made. In this sense Bitcoin can never be a real currency for day to day staples - it takes 10 minutes to complete a blockchain transaction, and prices have to be quoted in something else. Of course middlemen who assume the price risk can offer immediate conversion, but at a high cost per transaction.

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Bitcoin's price will eventually stabilize once it's gotten nearer to it's true value. But until then, the great thing about the internet is its pretty easy to use one currency as a unit of account, and another for payment. The only remaining issue about volatility is the possibility that a business receives payment in bitcoin right before a long downward price trend. However that can be solved by businesses selling any bitcoin immediately that they're not to take that risk on.

If you're saying it takes 10 minutes to complete a transaction, you should look into the lightning network. Transactions take seconds at a cost of hundredths of a penny. And that's all still bitcoin and trustless.

If it stabilizes and does not keep going up. Guess what happens to the 90% of holdings in Bitcoin that are pure speculation? They get moved to other assets with higher prospective yields.

It will probably never stabilize. It will just keep going up forever as humanities wealth increases..

https://www.youtube.com/watch?v=7vl_ziH6OJo

Right, bullshit.

Bitcoin is scarce asset and it's more like digital gold and a store of value, rather than a currency. People hold gold to maintain value and don't go to retailers to pay for things in gold. It's the same idea with Bitcoin. However people can Bitcoin across the world pretty instantly which you can't do with physical gold. There are better cryptocurrencies for cheaper and faster payments that are more inline with traditional currencies. For example, VISA is launching credit card that will allow you to spend USDC cryptocurrency which is a non-volatile stable coin.

People in general don't hold gold though. Tresuries hold gold, but everyday people are not very interested in preserving the value of their 200k in savings. They want a decent yield of at least 3%/annum.

2-3% yield is the minimum needed just to keep up with inflation. Right now anyone can convert their USD to a stable-coin and get a safe yield of 8-12% with automatic lending protocols [0]. Gold is physical material people need to keep safe and converting back and forth from fiat is not something that's instant. If it was more convenient then people would hold it. Bitcoin solves this.

https://defirate.com/lend/

Yes and people can also invest in high yield funds to get just as much with probably much lower exposure to risk. And no, people don't need gold.

Would love to hear more of these traditional high yield funds with less risk that you're speaking of.

People don't need gold in particular, but they need a place to store value without friction.

If you want digital gold, why not:

https://www.etf.com/GLD

It does have the disadvantage of having gains treated unfavorably by the IRS, (as "collectibles") but it has the advantage of having fairly liquid options you can sell.

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