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A currency which changes in value by around 40% in a 24 hour period is completely useless for the transactions I mostly deal with. We worry about a few percent change over weeks and insist on hedges.

Imagine saying to someone - I'll put 1000 BTC into your venture when you reach the next milestone in two months. What's that going to be? USD 100,000? USD 50,000? USD 1.50?

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"A currency which changes in value by around 40% in a 24 hour period is completely useless for the transactions I mostly deal with"

1. IIRC Silk road uses some average price rather than the spot price

2. Does anyone provide BTC hedging? Seems like a pretty useful and profitable service.

To enable hedging, someone would have to take a forward position in USD/BTC .. and at the moment, the market is in contango ( see http://en.wikipedia.org/wiki/Contango ) which means that the sentiment is that the price will continue to increase for the near term ... ie you'd have to be very brave indeed in order to put a limit on the expected BTC price.

"you'd have to be very brave indeed in order to put a limit on the expected BTC price."

Or quote a fairly aggressive price (so that the hedger pays a significant premium for the service)

Also, how are you getting futures/forward prices on USDBTC?

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