An idea to move Bitcoin closer to everyday use

[Stn]

Even Fiat like USD, has no "official" price in relation to other currencies.  Various exchanges and
banks trade currencies and rates are always floating.  Rates tend to converge on a single price at any given time
due to arbitrage.  This is true whether its dollars or Bitcoins.

You are incorrect in your thesis. In the USA where local currency is the world reserve currency obviously no "official" rate exchange. But in other countries which live in Bretton Woods/Jamaica monetary system local currency is tightened to USD. They do have "official" rate exchange of local currency to USD issued by the Central Bank of that country. It may have different status from strict to advised, allows wide or narrow margins for commercial operations. But it does exist. So whenever business entities negotiate they do not argue, let use rate of bank "A", or bank "B", or average of rates in banks "C" and "D". They always know that can open Central Bank website and get fair "official" rate.

[Stn]

i dont understand the point in adding exchange rate to each block as it will be different on the next block.  maybe op is confused on the notion of supply and demand and exchange rates from fiat to bitcoin.  no one sets these and the market would not use the "block rate" rather would still find its own rate.

Exactly! it will be different on the next block. That is the point. It is not directive issued by someone. It is just "official" ascertaining or the market price snapshot.

What we need it for? Firstly it is convenience. Every single merchant don't have to analyse and calculate average price from different major exchanges. Merchant don't have to trust any third party website doing this work for him. As soon as this value is already average for the market and confirmed along with the block it may be well trusted.

Secondly there are two side effects which I found very nice. We say "market price". Who forms that market price? Stock exchange players. It means "Wall Street" of the Bitcoin community. Doesn't it look familiar and dull? If we allow any peer offer its price it is going to be more democratic (and fun). If you are fat wallet holder fine bully the price. If you are bitcoin-poor lower it hoping to buy more. Obviously all nonsense offers will be just dumped.

Another side effect is that in order to qualify peer's offer algorithm have to compare it with the last confirmed rate. Therefor huge sudden drops or raises due to technical problems in exchanges will be smoother and won't raise panic. It makes Bitcoin more stable.

[jonald_fyookball]

Even Fiat like USD, has no "official" price in relation to other currencies.  Various exchanges and
banks trade currencies and rates are always floating.  Rates tend to converge on a single price at any given time
due to arbitrage.  This is true whether its dollars or Bitcoins.

You are incorrect in your thesis. In the USA where local currency is the world reserve currency obviously no "official" rate exchange. But in other countries which live in Bretton Woods/Jamaica monetary system local currency is tightened to USD. They do have "official" rate exchange of local currency to USD issued by the Central Bank of that country. It may have different status from strict to advised, allows wide or narrow margins for commercial operations. But it does exist. So whenever business entities negotiate they do not argue, let use rate of bank "A", or bank "B", or average of rates in banks "C" and "D". They always know that can open Central Bank website and get fair "official" rate.

Just because some currencies may be pegged doesn't change the validity of my point.
Bitcoin is obviously not pegged.

Anyway, I'm not sure why you think having some official rate would change much.
Let's say such a thing existed.  How does that substantially help Bitcoin adoption?

[Stn]

Anyway, I'm not sure why you think having some official rate would change much.
Let's say such a thing existed.  How does that substantially help Bitcoin adoption?

For 4 year I was working as an exchanger and a merchant, selling goods for Bitcoin. I did all my best to spread adoption of Bitcoin at least in my country. Therefore I got certain thoughts which I try to explain.

Firstly understand why such systems like PayPal adopted easily. Let put aside that convenient fact that PP-USD is almost equal to USD. "Almost" because due to fees on income and withdrawal PP-USD got less value than cash USD. Most important part that PayPal offers single point responsibility services to the merchant. Once POS plugged to merchant site it is PayPal who cares all from payment confirmation to exchange rate setting.

In Bitcoin especially in the first years from the merchant view what was offered was nightmare. Only geeks or total fans of Bitcoin would adopt it for business. Nowadays it looks much better while looking to POS system offers. But still they all have main problem which is looseness in exchange rate formation (which I explained in posts above). While in PayPal exchange rate is optional feature, in Bitcoin it is vital. Though situation improved but we have to admit that at the moment we can't offer merchant fully reliable POS solution. If it's self-contained box then it stores funds at a third party (which is anti-Bitcoin tendency). If it's privately held wallet then merchant gets whole load of headache to maintain POS system built on top of it.

Of course what I offer is not panacea which will make Bitcoin adopted everywhere immediately. I didn't promise that. It is just another step towards that direction.

And once more. Guys who sell things and exchange through forum (this one or others). No offense but it is not about you. I am talking about adoption by serial sellers. Small, medium, large.

[jonald_fyookball]

Anyway, I'm not sure why you think having some official rate would change much.
Let's say such a thing existed.  How does that substantially help Bitcoin adoption?

For 4 year I was working as an exchanger and a merchant, selling goods for Bitcoin. I did all my best to spread adoption of Bitcoin at least in my country. Therefore I got certain thoughts which I try to explain.

Firstly understand why such systems like PayPal adopted easily. Let put aside that convenient fact that PP-USD is almost equal to USD. "Almost" because due to fees on income and withdrawal PP-USD got less value than cash USD. Most important part that PayPal offers single point responsibility services to the merchant. Once POS plugged to merchant site it is PayPal who cares all from payment confirmation to exchange rate setting.

In Bitcoin especially in the first years from the merchant view what was offered was nightmare. Only geeks or total fans of Bitcoin would adopt it for business. Nowadays it looks much better while looking to POS system offers. But still they all have main problem which is looseness in exchange rate formation (which I explained in posts above). While in PayPal exchange rate is optional feature, in Bitcoin it is vital. Though situation improved but we have to admit that at the moment we can't offer merchant fully reliable POS solution. If it's self-contained box then it stores funds at a third party (which is anti-Bitcoin tendency). If it's privately held wallet then merchant gets whole load of headache to maintain POS system built on top of it.

Of course what I offer is not panacea which will make Bitcoin adopted everywhere immediately. I didn't promise that. It is just another step towards that direction.

And once more. Guys who sell things and exchange through forum (this one or others). No offense but it is not about you. I am talking about adoption by serial sellers. Small, medium, large.

Ok, but you're just talking about volatility.  Having an 'official rate' doesn't help that, unless you mean a pegged value which is impossible with Bitcoin.  Is that what you're suggesting?

And I think POS/ecommerce solutions like Bitpay and Coinbase do automatic conversion and automatic bank deposits already.

[Stn]

Nothing about pegged value. A bit above I wrote:

It is not directive issued by someone. It is just "official" ascertaining or the market price snapshot.

Those POS solutions with automatic bank deposits (if it really works) may do only for so called civilized zone (SEPA or USA). Not bad share but there is 90% of the remaining world. And also entity should want to hold and use Bitcoin further, not rid of it immediately after income. This offered way is rather extensive for Bitcoin adoption process.