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Author Topic: How does a merchant / economy use a currency that jumps from 266 to 105 and back  (Read 2213 times)
gopher
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April 11, 2013, 09:24:55 AM
 #21

simple answer: it doesnt.


So , you are telling me that bit coin will be more a vehicle for speculation than a normal currency for a long long time ?




basically. its a fault of its design, theres nothing that can be done.

I disagree.

It is like blaming the commodities for being traded and speculated with.

The Bitcoin is a great thing, yet to find its correct definition, it is used by different people for different purposes.

Today, majority (an the most influential) of the users are short-term speculators. Tomorrow that will change - they will be replaced by the hoarders, futures traders and long-term investors. Eventually, when the price stabilises, we might see more and more people using BTC as currency.

But all that time, it will be the same Bitcoin, just being used by different people for different purpose.

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teodor87
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April 11, 2013, 10:22:48 AM
 #22

They use a payment processor that handles that risk for them.

Who are they? And payment processors are used for electronic currency - debit, credit cards, e-cheques etc.

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April 11, 2013, 10:32:31 AM
 #23

Even Butterfly Labs uses BitPay as payment processor (at least did back in september).


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April 11, 2013, 11:37:30 AM
 #24

Since bitcoin is a decentralized currency, there are no real payment processors.

Centralized currency processors are backed up by banks, banks by central banks and insurance companies, insurance companies by reinsurance companies.

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April 11, 2013, 11:45:21 AM
 #25

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Whether you as a consumer wish to hold dollars and switch in and out of Bitcoin for convenience sake or you are like me and have switched completely over to bitcoins, that is up to you.
Dream on, milk, opera tickets and tax have all been paid with bitcoins, lol
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April 11, 2013, 11:54:05 AM
 #26

But not directly. And it will not be soon when payments will be paid with actual physical as well as electronic bitcoins. States worldwide will never accept them. It's a national currency suicide.

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April 11, 2013, 02:18:39 PM
 #27

simple answer: it doesnt.


So , you are telling me that bit coin will be more a vehicle for speculation than a normal currency for a long long time ?




basically. its a fault of its design, theres nothing that can be done.

Yes. Mostly a fault of human design, i.e. design of human nature, where greed is always stronger than collectivism.
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April 11, 2013, 02:25:40 PM
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Whether you as a consumer wish to hold dollars and switch in and out of Bitcoin for convenience sake or you are like me and have switched completely over to bitcoins, that is up to you.
Dream on, milk, opera tickets and tax have all been paid with bitcoins, lol

:-)
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April 11, 2013, 02:27:35 PM
 #29

simple answer: it doesnt.


So , you are telling me that bit coin will be more a vehicle for speculation than a normal currency for a long long time ?




basically. its a fault of its design, theres nothing that can be done.

Yes. Mostly a fault of human design, i.e. design of human nature, where greed is always stronger than collectivism.

but aren't our failing known to us ...

how do we try and organize so that the greed of a few does not hijack the need for a majority
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April 11, 2013, 03:09:23 PM
 #30

Hi2All,

This is a artificial price fall and unethical way of financial practices.

Past 8+hrs and still bidders are ready to buy $165+ and the sellers too. then how is it falling into $80?

chk mtgox, bitstamp and btc-e order summery and pending orders.

Thankyou

Anto

AVALON-ASIC(Batch #2) Order #3xx3 made on February 18, 2013. Order status: completed(Mining Now).
Gridseed Dual Miner (01/Mar/2014) Order#17-#18 with Badman0316 | Order Status: completed(Mining Now).
BTC Address : 1DcYbWHmpyJHbnec2A6J4zNy5f1kdEtXFj
johnyj
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April 11, 2013, 04:57:29 PM
 #31

The bitcoin price will always rise sharply and drop sharply due to extremely low liquidity on the market, but people will learn from each rise and fall and adjust their strategy accordingly. Currently there are just many new people who don't have enough confident in bitcoin, but after several years they will learn from this kind of correction and profit from it

For example, people can deleverage by only putting 10% of his risk money into BTC, so even a 90% drop will only translate into a 9% drop of the total risk capital, and those 500% gain will be reduced to 50% gain, still a good risk/return ratio

And when the price rise enough high and we start to use mBTC or uBTC, the liquidity will improve a lot, those who holding lots of BTC will not move very big amount of BTC like they do today, just like those who holding billions worth of assets seldom do a mass liquidation


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