A cryptocurrency with volatility can't be used as money

[darkangel11]

I get the volatility argument in general, but that example is pretty weird if not downright dumb.

When the value of a money decreases it means that its purchasing power decreases. This means that -- ignoring deprecation -- the value of a commodity stays the same, while the price -- as measured in the money in question -- increases. That's what happens during inflation. Not only that, it's pretty much the prototypical symptom of inflation.

To make this example more absurd real estate has served -- more or less effectively -- as a hedge against devaluating currencies for decades. Exactly because it doesn't lose its value as much as the money that was spent when purchasing it. Ignoring real estate bubbles, obviously.

If that really is this guy's line of thinking -- and if he's somewhat representative for his peers -- than no wonder that the traditional banking system is in the state it is.

Exactly. It's even the other way round from what he's saying because of missed opportunities.
He thinks that if he buys a flat for 10 BTC and next year it's worth 15 because of the lower value of BTC the flat also loses value, but it's not! Since the flat can be sold for any other good or currency, you can sell it for a gold bar that will be worth roughly as much as BTC before the crash, the value remains the same.
But what if the value of BTC goes up. You've spent 10, but now someone else can spend 5 to buy it back from you. You've screwed up. If you held you could have 2 flats instead of  1. Still the value of a sinfgle flat has not changed.

[Barrett Edwards]

Crypto can be used as a money... Crypto is volatile, so you can consider using it as money when the price is high.. You will end up paying less USD..

[St4yInTh3D4rk]

I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.

What do you think about this argument?

Yes,I agree with that statement because if it is a currency then it need to have somewhat stable value.When it comes to the crypto currencies the volatility is very high but soon at one stage the cryptos also will have stable value when the adoption rate increases to maximum.But I don't think the value of bitcoin decreases over the years until now so it is eventually better than fiat which is a great tool can save us from inflation.

[ruski]

Crypto currencies are already used as money despite the volatility of their prices. In fact, the volatility is another different and attractive feature of crypto currencies, because it is making this digital currencies a lot differnet than fiat currencies, and it is also encouraging many new comers and investors to start buying cryptos.

[Shenzou]

I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.

What do you think about this argument?

Well the actual value of the thing that your buying with bitcoin is not what changes, it is bitcoin that changes, a better example would be buy something for 1000$ you would pay the merchant 0.1 bitcoin the next day the price of the bitcoin would fall the merchant would have 0.1 bitcoin but 900$, so indeed the volatility of the currency does affect its adaptation, but the people who would be accepting bitcoin would be aware of this and they do it because they know that the value of bitcoin will keep on increasing, so it does not make a problem.

[Ben K.]

Throuought history we’ve used commodities to trade as currency. They always begin with volatile price structures and then as more people begin to accept it as a form of payment the volatility subsides. There is a valuable argument to why inflation may be necessary to encourage people to spend, but it does not make sense that if bitcoin becomes the standard that it would be volatile. The volume would stabilaize it if it was large enough.

[lokanot0]

Of course, any currency would be impossible to use if it is very volatile, but let us see its volatility first, maybe if it's daily then that would really be a headache, but if the currencies' value change in months then that is acceptable.

[onemoretime8520]

this is of course a thing that we already know and it is a simple thinking, we may think that btc is a new currency and is not even legalized so the volatility is quite normal and it can be fixed within time, it is not said that it will be like this forever.

[Lagrood]

Your argument is nice but your mean just only on dollar but there are a lot of minor currencies which have a immense volatile especially in developing countries but anyway your are right that world economy cannot be based on a volatile currency because it will be a collapse but crypto currencies are too young so they are not stable but they will be much more stable in the future.

[Elrozaq]

I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.

What do you think about this argument?

yes, It is true. A crypto currencies with volatility cannt be used as money. I think this asset class market needs to be matured more so that its less volatile. maybe, when the demand is higher or balance than supply, the crypto will stable.

[Bitfling]

I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.

What do you think about this argument?

I think fiat money high volatility too. Volatility not only on crypto but in any commodity or investment because the price determined by market or supply and demand. The different thing is cryptocurrency volatility can not controlled

[MainIbem]

Currency value fluctuations is not the yardstick to ascertaining the use of the currency. This is because the causes of currency fluctuations is the result of policy and market forces and not the currency itself.

[DJCanh]

I'll agree
Because fast changing of price can be really difficult for every day using
Maybe, with time will appear new crypto, which have a stable price, but who knows
Also, for more stable coin we need regulations. Bad many countries make their own regulations, which really different from country to country

[Nahl]

that's quite true and that's why some of people consider bitcoin is only digital asset because volatility still be the main problem to makes bitcoin became an money instead of fiat and volatility too can makes high inflations for the particular countries however i was thinking that if this volatility can't solved which mean make bitcoin as money looks almost impossible

[btcrising]

That's exactly my point that not many agree with.
Huge volatility makes it unuseable for common people and risky for investors. BTC is just a first step, some future coin that will manage not to be that volatile, can take its place in some years. If BTC won't find balance and rise to 20-30k again and then drop - no one ever would be interested in it except some dedicated crypto enthusiasts

[eagle10]

I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.

What do you think about this argument?

If bitcoin value loses its value doesn't mean real estate has the same sentiment. They are different asset or property. It just happen  bitcoin is used as a means of payment for the amount of the flat. No relationship to the value of bitcoin.

[BillCoin]

I'm just reading an article in the newspaper. Klaus W. Wellershoff (a last chief in UBS Bank) says that's impossible to use a currency with volatility as money. If the value of the money decrease, that means the value of the merchandise decrease. For example : if you buy a flat with bitcoin and few years later the bitcoin value decrease... Your flat lose his value as well.

What do you think about this argument?

If bitcoin value loses its value doesn't mean real estate has the same sentiment. They are different asset or property. It just happen  bitcoin is used as a means of payment for the amount of the flat. No relationship to the value of bitcoin.

If bitcoin lose value, all it says is that the demand for bitcoin at this specific point is lower then the supply, it usually doesn't say anything about the technology.
It all depends on the buying power, if bitcoin stays stable against the USD for one year, you actually lost money in this year as fiat value decreases because it has inflation, so anything below an increase of 4-5 % yearly would be a lose.

[Dudeperfect]

To be honest, it doesn't make any sense to me. If you are buying a flat worth $100000 then you will have to pay around 11.60 BTC as per the agreement. Even if the price of Bitcoin falls after 6 months, the value of the flat would be the same (depends on the value of similar assets in that area). On the other hand, there is a risk of volatility for the flat seller if he is still holding the Bitcoins with him. That's what crypto is all about today, one should not invest if he not comfortable with the volatile market. Crypto market is still in the development phase and thus volatility will be there for some more years.

[el kaka22]

Let's ignore the real estate value of your apartment and assume it has a fixed price; it means that you bought it for $10,000:
In 2013 considering that the value of the Bitcoin $ 100: you need 100BTC to buy an apartment.
In 2017 assuming that the value of the Bitcoin $ 1000: you need 10BTC to buy an apartment.
Today, assuming that the value of the Bitcoin $ 10,000: you need 1BTC to buy an apartment/flat.
I agree with you that the price of the Bitcoin is variable, but it tends to go bullish that means its value increases over the days than paper money.

That is really more like looking at it in the long term which obviously makes it even more interesting in that perspective. The thing is that in the long term, except for those who are just looking at the short term of things, at the end, they are still going to be making a whole lot. However, looking at the context of the OP, it would not really play out the way he portrayed it. Flat value that has been purchased already cannot decrease with a decrease in cryptocurrency value; it would only affect the seller in a short while in this case if he still ends up holding.

[ttking]

I can't agree with this assumption because prices for everything aren't stable. Crypto currency is innovative money but in the nearest future I am sure that most governments will start using it as the main currency