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Author Topic: solution for maintaining transaction value between bitcoin senders & receivers  (Read 671 times)
jdbtracker
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April 18, 2013, 01:27:58 PM
Last edit: April 18, 2013, 02:17:08 PM by jdbtracker
 #1

Now, everyone may have noticed that people are using the Bitcoin system to speculate.

The purpose for Bitcoin: To securely move financial value from one point on the planet to another with no errors.  though what people are doing is quite amazing! very interesting.

now the sandbox elements of bitcoin currently being exploited by the financial sector is fine, the price of bitcoins should not affect our customers.

as long as an agreed upon price is set between sender and receiver. Bitcoin was originally meant to work under traditional banks infrastructure as a sub-layer of security.

e.g.: if I wish to send money to my mom, I set the price to 100.00(this is the example price for transmission so it does not affect the people using Bitcoin as a speculative commodity, it should be fair market value so you don't spend an eternity waiting for your order to go through) someone buys my currency and exchanges it into bitcoins, I then in turn tell my mom at what price I bought the bitcoins, she receives the  bitcoins goes to the exchange and demands a sell order at the same price. That way no value is lost during the transmission due to the speculators and the transaction fees should be paid to avoid being victim to speculators... otherwise your going to lose your shirt in the transmission if the transmission takes more than an hour.

the market cap of Bitcoin should reflect how much money is being transfered by the system and not as in traditional markets; the measure of value... its just the value of the volume of transactions.

hope you like my solution it is deceptively simple, it solves more than one problem if you realize it Smiley

now to add a little food for thought... the market for online payments is...2.7 trillion dollars in transaction fees... would you like a piece of that pie?

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April 18, 2013, 02:12:38 PM
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So let's say the price crashes to $65, who is going to accept the $100 offer?

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April 18, 2013, 02:15:47 PM
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So let's say the price crashes to $65, who is going to accept the $100 offer?

oh sorry I kind of buried it in there, you accept the fair market value to make sure your order goes through on the exchange, as long as you get your transaction done ASAP you have nothing to worry about. Get it into your secure bank account ASAP

of course MtGox will have to scale to accomodate all worldwide transactions.  which currently is...for visa alone 130 million transactions per day.

We're going to need more miners!

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April 19, 2013, 02:38:38 AM
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Perhaps businesses can be built on top of Bitcoin in order to accomplish this, but they will have to charge fees closer to what existing money transmitters charge in order to hedge against fluctuations.

Honestly I'm not really sure where to begin to explain to you why your naive idea of maintaining value doesn't work in the real world.  In order for you to send money to your mother in some other country via Bitcoins, someone there has to want the Bitcoins as much as the people do where you are sending from.  If there is any discrepancy, there will be a difference in value that cannot just be magically wished away.

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April 19, 2013, 04:03:32 AM
 #5

Potentially you could hedge against Bitcoin shocks with a futures contract. ICBIT has those. But the futures market is so thin that protection is expensive.  Also, it may not work. The party on the losing side can fail to replenish their margin and limit their loss.
jdbtracker
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April 19, 2013, 12:39:16 PM
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Perhaps businesses can be built on top of Bitcoin in order to accomplish this, but they will have to charge fees closer to what existing money transmitters charge in order to hedge against fluctuations.

Honestly I'm not really sure where to begin to explain to you why your naive idea of maintaining value doesn't work in the real world.  In order for you to send money to your mother in some other country via Bitcoins, someone there has to want the Bitcoins as much as the people do where you are sending from.  If there is any discrepancy, there will be a difference in value that cannot just be magically wished away.

but it's all being done on the same exchange, but mt.gox is getting really laggy right now their volume has risen to the 300k mark now,
hmmm yeah, well I think it's a good idea but the fact it's taking so long to exchange... that's a real wrench in the cogs.

If you think my efforts are worth something; I'll keep on keeping on.
I don't believe in IQ, only in Determination.
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