> Now, if the good was completely fungible, risk-free and totally liquid (think cash), there would be no expected discount because of risk.. just transaction cost.
How is that not the case here?
How is that not the case here?
As a result, a buyer would be willing to pay market price - transaction costs - risk transfer cost.
Pricing the risk is of course tough as future volatility is especially tough to predict for BTC. But this is the fundamental rubric for how one would view the transaction.
It is apparently hard to trade that many bitcoins for the equivalent amount of government-backed currency or goods.
To be fair to Bitcoin, it's not the only "currency" with that problem... during the Argentinean crisis, many local governments paid their workers with alternative currencies ("patacones" and others) which rapidly devalued.