Wow, these guys are going full retard. The usefulness of Bitcoin as a method of payment is hardly affected by it's price fluctuations, for the simple reason that merchants can easily get all their bitcoins converted to USD or EUR or whatever, through Bitpay. And with a .99% fee, this is still a lot cheaper than credit cards or paypal.
For consumers it doesn't matter either, because they can always buy more bitcoins once they've spent some.
I have to call BS on this one, sorry.
If I purchased BTC @ $166 this morning to make a transaction 5 seconds ago @ $146.....that transaction would cost 12% (12% more bitcoin, which is 12% more USD as the store of value has changed) plus the spread, which is usually 0.5% - 1% and must be taken into account in merchant pricing through BitPay. And don't forget BitPay's 1% fee....minimum 13.5% in fees.
No, foreign exchange risk (currency risk) is actually a very serious issue. Hedging for this type of risk was impetus for the futures/forex industry.
And I would hesitate to call a panel that contains Nobel Laureates 'full retard'.
Volatility is probably the best criticism of bitcoin. I think these are among the important questions to ask related to the volatility criticism:
Is bitcoin a compelling enough idea for enough people that its adoption will continue to increase over time despite that it will likely be very volatile during this adoption phase? And, once bitcoin has been adopted by a large enough population, will its value stabilize enough to make it a better currency? I think these are open questions that can't be answered confidently one way or another, and that's why bitcoin is, in a sense, a huge social experiment.
Are there good reasons to think adoption will increase in spite of violent exchange rate swings, and are there good reasons to think that if adoption increases enough the exchange rate volatility will fall to acceptable levels such that bitcoin is a better currency?
