Bitcoin as instrument of commerce - not?

[JorgeStolfi]

The price of a Bitcoin has fallen 50% in 48 hours and is still oscillating by 20% every few minutes.

Why would a merchant trade in Bitcoins?  He sells a US$ 100,000 car for US$ 100,000 worth in bitcoins, runs to the bathroom, and when he's back he finds that those bitcoins are worth only US$ 80,000, or US$ 50,000, or maybe US$ 1,000.

Bitcoin will never take over a significant fraction of commerce if its price keeps changing like this.  Its use will be restricted to sales where the profit margin is high enough, say 50% or more; which is mostly illegal trade.

[gekkomk]

Bitcoin is a long-term investment. It's not just a fad, but don't get involved unless you know what you're doing.

[BCB]

A merchant using Bitpay.com is required to assume no volatility risk.

The bitcoin protocol is merely used as the value transfer mechanism.

The price of the purchase is converted to bitcoin.

The customer sends the value of the purchase in bitcoin.

Bitpay confirms the transaction and locks in the dollar value and deposits the US Dollar amount in the merchant's bank account the next day.

https://bitpay.com/bitcoin-direct-deposit

[tokeniso]

Im a Newbie & also a merchant that would love to accept Bitcoin for all my Ebay & Amazon sold products.

Like said before in this thread I'm looking at it from a long term investment and would rather have my items sold and payed in Bitcoins at the current rate now  than sitting unsold on Ebay with the hope of selling in the future.

This is why I have searched for ways to sell my products and accept Bitcoins . I joined this forum to establish myself and then be able to offer all my products for Bitcoins.

The posts I've read in the short time here are very informative and I look forward to learning all I can.


So to answer OP's question yes there are many Sellers including myself who would accept Bitcoin and not worry about the volatility . The sale is the most important thing to me.

[stephenfork]

The buyer or seller might consider the risk with the volatality of bitcoins before making a purchase or doing a sales. Sudden surge and spike happens rarely to any currency not only for bitcoins.

[JorgeStolfi]

The price of the purchase is converted to bitcoin.
The customer sends the value of the purchase in bitcoin.
Bitpay confirms the transaction and locks in the dollar value and deposits the US Dollar amount in the merchant's bank account the next day.

So the merchant must still quote his prices in conventional currency (dollars, euros. etc.); he cannot quote in Bitcoins.  And the Bitcoins he gets are instantly sold to the exchange agent.

If the same facility is given to the client (he buys the bitcoins moments before the transfer) then the Bitcoins are just an internal mechanism of transfer between exchanges; as seen by client and merchant, the transaction used traditional currencies with the exchange(s) playng the role of a bank, except perhaps with a reduced tariff.

If the client does not have the same facility, then the volatility problem I mentioned is shifted to his side.  He buys US$ 100,000 in bitcoins in order to pay for a US$ 100,000 car, runs to the bathroom, when he comes back he finds that those bitcoins are worth only US$ 80,000.

I still do not see how Bitcoin could ever replace traditional currencies as an explicit instrument of trade if its value can change 20% in a few minutes, many times per day.

[JorgeStolfi]

Sudden surge and spike happens rarely to any currency not only for bitcoins.

Euro/Dollar exchange rate over last week: low 1.353, high 1.370 (1.2%)
Ditto, over the last year: low 1.278, high 1.380 (7.6%)
Ditto, over the last 12 hours: low 1.37039, high 1.37056 (0.01%)