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Author Topic: Pegging Values on Physical Goods  (Read 700 times)
capn noe
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June 21, 2011, 01:02:10 AM
 #1

Now that I've decided to start getting into bitcoins I have to pick how I'm making my BitBucks.

I'm not interested in mining and I really don't like what I see in the exchange markets at the moment, so I am assuming my best bet is to just start offering products and services to folks who hold BTC.  I'm not sure how to calculate price though.

I've been looking around and I haven't really seen good 'rule of thumbs' for pegging values at all.  I can determine how much USD I'd charge for a job, take an average of BTC values over a period of time, and just hope for the best..... but that isn't how I'd LIKE to do it.

Any advice for me?
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capn noe
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June 21, 2011, 01:04:35 AM
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In a way it seems like the auction format might be a better way to sell things in real time....
dennis_sweden
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June 21, 2011, 01:25:08 AM
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Yeah, I agree with capn noe. Bitcoin "value" is far to unstable, I'm surprised that any businesses take bitcoins. Even during the past days before the crash, when valuation was reasonably steady, valuation fluctuated about 10% daily. And if one looks at the whole history its not practicable. Of course, in order for bitcoin to become more generally accepted, more people/businesses must use it, but as you don't want to hope for the best...

How can you tell when a politician is lying? His lips are moving. A little girl asked her father, 'do all fairy tales begin with "Once upon a time"? The father replied, 'No, some begin with - If I am elected.' How come political leaders don't have all the answers until they write their memoirs?
capn noe
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June 21, 2011, 01:31:45 AM
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Yeah, I agree with capn noe. Bitcoin "value" is far to unstable, I'm surprised that any businesses take bitcoins. Even during the past days before the crash, when valuation was reasonably steady, valuation fluctuated about 10% daily. And if one looks at the whole history its not practicable. Of course, in order for bitcoin to become more generally accepted, more people/businesses must use it, but as you don't want to hope for the best...

Sadly the only real thing I can think of is to drastically undervalue it in calculations. So right now I'd sell something I'd ask 50USD for @ about 8BTC, which seems a little unbalanced for BOTH participants.

An auction would let those buying kinda infer value, but even that doesn't work unless I have multiple buyers. If I'm selling, say, a catered dinner for 10 I seriously doubt I'll have 2 potential buyers ATM that would be going back and forth and establishing value as of the time of the bids (let alone if value changes dramatically after bidding happens).

Maybe someone is working on a fancy new kinda auction that compensates in some way?
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June 21, 2011, 01:35:51 AM
 #5

Time to start a BTC penny auction website! Its a great scheme to make BTC, just the effort into making a php enabled website and all the SSL you would need to secure everyones transaction would take either alot of coding on ones part or alot of money to pay a coder.

Just my 0.02BTC

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capn noe
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June 21, 2011, 02:59:40 AM
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I'm assuming that I am trying to do face to face transfers...
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June 21, 2011, 07:01:00 AM
 #7

This is a challenging problem. I'm assuming you're going to be willing to hold your bitcoins for a few weeks if needed. So I'd suggest you use the average over the previous four weeks, ignoring any 'outlier' excursions. Update your prices every week or so if you feel you need to. If the value of bitcoins seems suspiciously low (as it does now) just hold them for a bit. If you ever feel uncomfortable because you're holding too many bitcoins, raise your prices to fairly compensate you for the additional risk. Obviously, don't cash out when the rate seems low. Since bitcoins are generally appreciating in value, you should generally make money by holding them.

I am an employee of Ripple.
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capn noe
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June 21, 2011, 07:09:18 AM
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That's pretty much what I'm thinking.

There really doesn't seem to be many people offering services and goods that are not BTC financial products, middleware, or BTC mining related hardware , so advice seems pretty thin on providing 'to the public' services.  I feel like i'm in for a bumpy ride! 

I'm not sure if I should be viewing holders of BTC as my customers or not, really. Time will tell.

If I had a ton of coins I might consider approaching local businesses as if I was starting a local currency experiment with them or something to increase the number of potential customers I could have in my area.

Just dunno. I'm going to make a blind guess and learn with it, and just not go any further in than I could handle losing.
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