Bitcoin Forum

For Bitcoins to be used as an actual currency to buy goods other than the few BTC shops online, the price needs to come down. At the moment, it's 1 BTC = $21. It would be extremely tiresome to carry around 0.1BTC or even less all the time for smaller purchases.

Once it has come down, hopefully it calms down and doesn't skyrocket again otherwise there's no hope to get it used as a currency by major corporations. Heck, not even major corporations but anyone.

How would that be anymore "tiresome" than carrying more bitcoins worth less value? It's the same thing. The current transaction fee is a pain but that will drop soon.

Generally you make a lot more smaller purchases than you do large ones. So it makes more sense for BTC to be worth less, and be stable.

Situation A:

You own 0.1 bitcoins and the price of a cup of coffe is 0.05 bitcoins.

Situation B:

You own 1 bitcoin and the price of a cup of coffe is 2 bitcoins.


Do you realize you have more money in situation A than in siutation B, right?

The nominal value of money does not matter (transitions between nominal value is another issue and do matter becuase the market has to adapt).

kind of like saying we should raise the value of the USD because its easier to pay for bread with a nickel than it is a dollar.

you know, in japan, a car can cost 2million Yen.

Although the stability thing kind of does matter - currently, you see places tying payments to x dollars worth of BTC, using MTgox exchange rates!

I guess it's more of a milestone once peopel stop pricing against dollar though?

I haven't found much information about fees. Care to explain in a couple of words why do you think fees will drop? Thank you.

Because there's a client release with reduced minimum transaction fee?

You are completely discounting human psychology and massively over-estimating the mathematical ability of mankind.

According to the experiments of behavioural economics people is sensitive to transitions in the value but not so much to nominal value itself. For example, in inflationary environment people will prefer a rise of 2% with the CPI going up a 4% (your real wage goes down 2%) than no rise with a CPI of 1% (your real wage goes down 1%), because people can not control the CPI so they try to stay ahead by demanding the maximum they can get. But people adapt to a nominal price level quite quick. For example, 10 years ago your wage and the prices were way lower, but people have adapted to the new prices and see them as normal.

You didn't address my points at all, it seems that you are assuming changes within a bitcoin-centric economy.  In order for people to get into bitcoins they need to actually buy bitcoins with dollars (or whatever).  People are not willing to pay $100 for "$1", even if it is a super magical internet dollar that is worth $100.  People are willing to pay $10 for 100 internet dollars.  This is what I mean by human psychology.  We need for people to be able to put $20 in and get 87 bitcoins to spend, rather than getting 0.87 bitcoins.  It makes a huge difference.

As for math, people really cannot compare 0.00006 and 0.0001.  Most people would tell you that the first number is bigger.  If you did a poll you would get maybe 10% saying that he second is bigger, 20% saying that the first is bigger, and 70% telling you that they don't know and that they HATE math.

I misunderstood what you were saying.

What you explain here is easily solved by talking of milibitcoins or microbitoins. So you get 50 mbtc (milibitcoins) with 1 dollar. The official client can be changed to show milibitcoins also (or make it optional, but show milibitcoins by default).

Imagine that the creators of the currency decided to call the currency "milibitcoin".  Do you think that they would have been as popular?  Right now I can mention bitcoin to people in real life.  Some percentage of these people will go on to google "bitcoin" and some percentage of them will purchase bitcoins.  If I tried to talk about milibitcoins with people they would be less interested (the name is not as pleasant sounding to the ear) and they would not have the confidence to make a google search.  People would have taken the currency less seriously.

Ok so now imagine that I still talk to people about bitcoin and then the research it a little.  They then encounter milibitcoins.  "Wait what?  Wasn't I trying to learn about bitcoin, ok so milibit coins 1000 = 1 bitcoin..  Ok I can sort of understand that EXCEPT that I am also trying to wrap my head around the idea that this thing is not controlled by a government or a corporation."  You see it is just too much for a normal person to handle.

The reality is that people are dumb.  You can blame it on nature or nature or both, but in the end it is reality.  In order for bitcoin to be successful it must be adopted by people who are essentially stuck at the 5th grade level intellectually.  Maybe 10% of people have a solid understanding of fractions, and another 10% have a little bit.  I am not talking about widespread acceptance either, then we would have to lower our standards to 4th grade.  Newspapers are written at the 4th grade level.

Branding matters.  Keeping the words and the numbers simple matters.  The value of a single bitcoin (not a milibitcoin or a microbitcoin) MUST always be reasonable.  This requires that we actually shift the decimal point one place at a time, without pretending to do so while merely adding an SI prefix.

Im not completely opposed and I see that what you say makes sense, but the italians had a very inflationary currency and they exchanged 1000 liras for 1 dollar and the dollar went ok...

And about moving the decimal, how would you do such a thing? You would need everybody or at least a big majority to agree. It would be the same as chanign the rules. The danger is a split of the chain and having two competing bitcoins, which in my opinion would take credibility away from bitcoins at this moment. On the other hand, it its done successfully and the community shows that its capable of such transitions it would be a big boost of confidence since it would shut up a lot of complaints. Its risky.

Why are people willing to pay $40 for a $1 face value Silver Eagle? It's simply perception. BTC needs to be recognized as scarce and therein is the value. I don't percieve it as a 1:1 ratio. I see it as a 1:x value, where x=capital cost x time involved to mine, desirability, functionality, etc.

So most people are incredibly stupid - but do you expect everyone here to be so stupid that they would actually follow your 'logic' just because you're pulling numbers out of your ass?

Hey, why don't we just make every $1 bill worth $100, then no one would be poor anymore.

I suspect that as more exchanges open the swings will moderate a bit. We are still in a high growth phase and MtGox's near monopoly creates greater swings. I think anyway.

As far as price... For many years I traveled very frequently. Always changing money into this or that currency. I treat BTC like those local currencies. Don't be a tourist, forget the USD. A million seems like a lot of money if you are used to USD. But in Zimbabwe it's a cup of coffee.
When I first got into bitcoin it was like $.60. And people said "that's nice". But now when I say it's $20 they think it's better somehow. That's just bad logic.

I think your evaluation of the psychology involving commodity or currency exchange is flawed at best. I can think of numerous instances where a 1:1 ratio has no impact whatsoever, so long as the perceived value of the currencies in question are solid.

Splitting the chain would probably destroy bitcoin.  Right now everyone on this forum is on the same team.  We all want bitcoin to do well.  We need to keep that unity.  All that I am asking is for the display and terminology to change.  That would require coding to change the client and all of the other bitcoin software/sites out there, but it would not change the underlying protocol.


They aren't.  Most people don't buy silver.  Perhaps 1000 years from now crytocurrencies will be in the same league as precious metals, but for now they don't have that tradition.  Of the people that do buy silver many of them only have an intuitive sense of how it works.  These people will go on about how the dollar isn't real money because it isn't backed by anything but that silver is real money, despite the fact that silver is not backed by anything either.


Please reread my posts and ask for clarification about anything that you do not understand.



We aren't at that stage and are not likely to be at that stage within our lifetimes.  Nearly all commerce is conducted in non-bitcoin currencies and it will be that way for a long, long time, even if bitcoin eventually becomes the global currency.  People will operate in both economies and will constantly be making the comparison.  Should I buy this with USD or BTC, which is it cheaper in?


I agree, we don't need a 1:1 but I believe that we need something between 10:1 and 1:10

This is important, and will happen eventually but not until the price of bitcoins stabilizes. I expect that to be at roughly 1 BTC = $100 with adjustments for dollar inflation.

I totally agree with the concept. On terms of relative value, nothing will change. While "new btcs" might have a 1/10 of their actual value, everyone would have 10/1 btcs. It would make everyone's life easier, and perhaps provide us with the useful illusion of a higher volume.

Anyways, sooner or later we'll need to do something like this. Oh, and I don't agree with changing the terminology. We could just make big announcements stating that from xx/xx/xxxx 1 BTC equal 10 new BTCs, then, modify the old bitcoin client, and that's it. I think we should take care of putting enough emphasis on "big announcements": This should be announced at least 1 month before the actual modification.

My two cents.

The problem with BitCoin is that there is nothing substantive backing the economy, which gives speculators zero incentive to keep prices stable (which is the point of speculation). Speculators in the BTC economy are simpy trying to inflate the currency to make money quick, and sell the profits on MtGOX, there's nothing to be gained but the USD/BTC exchange rate. Until there's more services offered that cater to the speciality of BitCoin (Silk Road, selling online accounts/game currencies, things that require anonymity/decentralization) we're just going to see endless rises in the value, and then crashes as people sell off their coins.

First things first. There needs to be more bitcoin in the market to provide liquidity. Stable prices will build confidence and acceptance. Needs more time but it will happen if gov doesn't steam roll it.

We don't need more time, we need more people.  We need consumers.

Vendors accepting bitcoin would be the floodgate....

More liquidity would just make speculation more outrageous; the economy needs to keep BTC in the virtual economy, instead of being a way to double your money in a short period of time. More liquidity won't help anything until BTC has an inherent value.

I've been saying this for a while, more and more are being added though.  It's not a fast process, but it is definitely happening.

Wrongo friend. More liquidity would mean that the market would more easily absorb large selling without watching the price fall 60%. It certainly would not make it easy to double your money in a short period of time. But it doesn't mean you can't either.

And BTC already has inherent value. It's value needs to be recognized; big difference.