Bitcoin Forum

I can’t figure out the following:

Given that the value of BitCoins depends on at what price people wants to buy it or sell it in the trading markets, how does this correlates with the actual price of goods setted in BTC currency. If the BTC price for the good is not in relation with the "real/offline currency" price, goods would be selling only when the amount of BTC asked is cheaper than the other payment methods (unless on could base his whole economy on BitCoins). If such is the case, doesn’t this attempt against getting lots of traders to use the currency (unless they are fond to the financial lottery). How do actual traders handle this issue? How do you think it should be handled in the future for getting traders into this?. Is this difference tolerable just because the minimum transaction fees?

I personally believe that most people (not only the actual BitCoins keepers) need security to make things, so perhaps an approach to the problem could be that the price of a good in BTCs always depends on the “standar currency price” over the BTC market value (at least until this stabilizes) given that both parts intend to make a transaction it’s because they are willing to sell or buy in such BTC market value.

Otherwise, could we make an actual average relation between “standard currency prices and BTC asked prices” for several given product? Wouldn’t this throw a realistic BTC value also?

What do you think? or What am I missing?

If you're exchanging BTC for something else that exists only digitally, the incremental cost to the seller for sending one more copy of an already produced work may be almost negligible for example. If the product/service is fixed at a certain price in BTC then it may seem like a better deal when BTC prices are lower, and the seller wins because there are more sales. For the seller who has to exchange those BTC immediately to pay for costs incurred processing and shipping some tangible good, it's a different story.

This same dynamic plays out among world currencies (EUR, GBP, JPY) it is just that you, the individual, living in your own country do not see this market as it is not integral to your daily life.  Right now the price is set by supply and demand.  There is inheirently fixed and only slowly growing suppy of Bitcoins but more and more people demanding to hold it.  More traders are buying it and holding onto it rather than selling it in expectation that even more traders will want to buy.

What you should see is traders and holders of bitcoins starting to leverage their wealth in Bitcoins to buy things they may not have the dollars to purchase.  College students on fixed budgets that happen to have lots of Bitcoins from various sources may trade them for computer parts, energy drinks, snacks, etc.  When this becomes prevalent the REAL economy of Bitcoins will develop.  Bitcoins will become even MORE valuable as they will be in more demand to buy a wider range of goods and services.

Ok so we are far of being able to include in this actual economy to the traditional trader who doesnt wants to expeculate with the BTC price. I know that small variations in the price of a currency happens every day but it´s kind of stable for regular people an so they trade it for a fixed price. In countries like mine (Argentina) we are used to set prices in $Arg and if needed, change them into US$ at the price of dollar in the exchange market when the transaction was done. This does the trick for speculators and not speculators.

The more bitcoin is exchanged for real goods and services, the more valuable it becomes?

Makes sense. Now we wait and see if it happens.