A cryptocurrency with volatility can't be used as money

[1Referee]

It simply doesn't work. We've been using fiat currency for decades now, and it has consistently lost its value over time. Yet everyone is still able to conduct business with fiat, even though we know that the value of fiat is going to go down in the long run.

The problems of value loss have started to become more obvious in recent years than ever before. The wealthy elite won't suffer any loss in purchasing power with how their returns easily cover the loss in value of their fiat holdings, but that's unfortunately not the case for the regular person.

Regulars have one weakness, and that weakness is debt. It's insanely easy to borrow money every month to fill up your gaps, while in the background the value loss of fiat + the interest rates of your loans (short term loans are mostly the worst and most expensive) are pushing you down in the hole even further. It's sickening that a system like this exists. Imagine how more worse the situation will become when we're like 10 years away from now.

Debt is the poison of this system slowly sucking the life out of everyone.

[EvaGC]

"It’s precisely the volatility and day-to-day price fluctuation what is keeping the masses away and scared of cryptocurrencies. Imagine if we can assure reluctant people that the value of their money will be stable and safe within the crypto space, so they can enjoy all the benefits from a decentralized and innovative financial system, without all the risks they’ve been hearing about in the news. Everyone can agree stability is important to encourage a wider adoption of cryptocurrencies."

Good read: https://medium.com/@globcoin_io/5-key-facts-about-stablecoins-571819f3b3fa

[raven7886]

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?

Buying a flat with bitcoin and because bitcoin reduces in value, your flat value reduces as well ? Are you really high right now ?
By flat, I am sure you are talking about a house in the literal term and for heaven sake, you have nothing to lose buying the flat in the equivalent amount you could have gotten it.

The only person who may have something to lose would be the person that actually sold the flat to you probably not converting to fiat and then the value of bitcoin drops in value which makes the idea of not using bitcoin as money comes to play but your example is totally off.

[deevan]

It is right due to high volatility it can't be used as money at least not in near globally, you should not consider cryptocurrency as an alternative to fiat. Consider it as a digital asset whose value can be increased/decreased as per supply/demand in the market. Take it as shares in the market based on a specific project/product same like your shares in the stock market which also depends on a project run by a team doing business with their project/product. If product demand increases whether it is related to stock market share or crypto market in both cases the value of your shares/tokens will be increased.

[Freddie Aguiluz]

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?

We can say that all money like dollar is volatile, but other currecies are much less volitile than the cryptocurrency. So we cant say that cryptocyrrencies cannot be used as money.

[wanimulyo]

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. The cryptocurrency with volatility can't be used as money. If it is stable, I think crypto can be used as money. Maybe in 2020, we will see the crypto is stable. I hope it.

[bigmaster23]

Putting all your assets and time to a crypto with volatile stability would infect your brain surging its signal to sell that particular crypto and for that matter don't waste your time reading article of what crypto is the most stable instead study market on your own and start trading, that way you could gain extra experience to your life the most stable one.

[Elkafi]

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,.If cryptocurrency with volatility can't be used as money. It must stable. I think In 2020 when the demand is balance with supply, It will be used as money.

[magneto]

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?

Wait, your example doesn't even make sense. If you buy a flat with bitcoin, then bitcoin prices drop, how exactly does it make the apartment price drop as well? There is no direct correlation here whatsoever, so I don't know what you're getting at.

Bitcoin is a better currency than fiat, and fiat is being widely used. So what's the issue?

Earlier on the adoption cycle, like right now, prices can be extremely volatile, sure. But as time goes on, this volatility drops. Also, there is a wide variety of ways people can fix the value of their BTC during a trade, so that they are not affected by any exchange volatility. I honestly don't see why BTC can't be money just because it's not pegged to a fiat.

[homeidea11111]

If the value of the money decrease, that means the value of the merchandise decrease.

I think it's the reverse--if the value of, say, fiat decreases the price of good goes up.  I'm thinking of hyperinflation situations in particular, where the price of stuff can go up crazy amounts.  You've seen those wheel barrels with Zimbabwe dollars in them, right?  Well yesterday it cost 100 dollars to buy X, whereas today it costs 10,000 dollars for X.  The value of the money went down quite a bit, and as a result the price of X is high.

The example of buying a flat I think is correct--if the flat was valued in bitcoin only.

As far as volatility being an impediment to bitcoin being a currency, I agree with that as well.  When it's going up, that encourages hoarding of it, and when it goes down you can't spend it fast enough.  You can still use it as money, of course, but the volatility is definitely a negative attribute as far as that's concerned.  But that also makes it great for trading.

That's true, and the post below also made the valid point of the price (hopefully) normalising later on. This is more applicable to when a particular cryptocurrency gains mass adoption so the actual usage is the main driver behind price, instead of speculation.
When you think of shares, the more established a company becomes, the more stable is the price.
However like shares and fiat (FX markets), cryptocurrencies will continue to have some traders that affect the price through speculation. For example when a large company announces a new venture in a new country, the price increases be a decent %. Or when a country gets downgraded in terms of its credit rating, the price of that local currency/fiat depreciates (falls), as less people demand it. This doesn't make that fiat currency be inappropriate for use as a currency or money.
One can also think back to the old days where people would use other things as money, such as wheat or dates. In such cases, the price would be affected the demand and supply of wheat, leading to sometimes large changes in the price. However they remained being used as money for centuries.
The issue with fiat is that authorities can print lots of fiat almost at will, which can lead to sharp changes in price, even in the short run. This cause doesn't occur with bitcoin.

[timerland]

It simply doesn't work. We've been using fiat currency for decades now, and it has consistently lost its value over time. Yet everyone is still able to conduct business with fiat, even though we know that the value of fiat is going to go down in the long run.

The problems of value loss have started to become more obvious in recent years than ever before. The wealthy elite won't suffer any loss in purchasing power with how their returns easily cover the loss in value of their fiat holdings, but that's unfortunately not the case for the regular person.

Regulars have one weakness, and that weakness is debt. It's insanely easy to borrow money every month to fill up your gaps, while in the background the value loss of fiat + the interest rates of your loans (short term loans are mostly the worst and most expensive) are pushing you down in the hole even further. It's sickening that a system like this exists. Imagine how more worse the situation will become when we're like 10 years away from now.

Debt is the poison of this system slowly sucking the life out of everyone.

Precisely. A debt based monetary system simply does not work, when you can just borrow money out of thin air. And you're right, the people that will suffer from inflation aren't the wealthy, aren't the poor, but the middle class, since they are the ones without investments to produce returns for them.

There tends to be this notion of fiat being constant in value over time, but this is definitely not the case. Even bitcoin appreciating can be seen as fiat depreciating, as more and more people see BTC as more fit of a store of value.

Bitcoin can be as volatile as it likes, but at least I have the peace of mind of knowing that nobody can manipulate it the way the government does to fiat. And volatility is a rather short term concept, BTC shouldn't be that volatile in the long run.

[TheClownSong]

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 if we saw on forex market, all fiat money have high fluctuation too. Maybe the fluctuation not like on cryptomarket but the price have a fluctuation. I am believe cryptocurrency can be for payment if regulation issued by government.

[senin]

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?

You just gave an unfortunate example. If the bitcoin rate falls, the apartment bought for bitcoin decreases in price in comparison with bitcoin, however it will retain its value in comparison with other currencies.
I can give another example. There was information that in December last year, Russia and Turkey had the first deal in bitcoin. Russia supplied Turkey some goods, it seems, some products. This deal, of course, was prepared in advance and in the agreement, a certain number of bitcoins was delivered according to its rate for that time. In December, the bitcoin rate rose sharply, we will count twice. This means that Turkey actually paid twice as much money in bitcoin. Then the bitcoin rate fell from almost $ 20,000 to $ 6,500. How can economists calculate the price and the amount of the goods in this case? Will Russia and Turkey want to play this roulette next time? Very much I doubt.
In the end, we can say that, in fact, decentralized crypto currency can not be used as money, but as the main currency. Such a crypto currency can quite successfully go and be used as money and only along with the circulation of ordinary money.

[Mojo2012]

Bitcoin and other crypto currencies’ worth is currently determined by the user demand and speculation.
The world is based on real currencies. The volatility of the cryptocurrencies os only a problem, because we have to exchange cryptos to real currencies.
Say a car costs 10000 euros, it will mostly likely cost that for years. Your income will be kind of stagnant too. So if you have 10000 today you can buy the car, if you have 10000 in a year you can bye the same car.
(Not including inflation for simplicity)

Base on speculation cryptos have changed their worth every day, probably ranging from 0 euros to a million.
You simply cant know if you can afford that car tomorrow, even if you could today.

The real problem here is that as long as the world is working with euros (and other currencies) cryptos cant be used as a replacement for money. At least not as long as speculation is such a thing.

But imagine of there were just cryptos! Or even just one crypto currency. Then the real world economy would be based on that and exchange rates would not apply.

Ergo the car woukd always cost xxx crypto. There woukd be no way of gaining money by speculation, so the worth would be stable.

[Tigorss]

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?

it has nothing to do with it just like you buy bitcoin using another coin, you might misread the news or articles. but it is true that the rise and fall in prices depends on the volality.

[Vaskiy]

Volatility is one of the factor which never lets the bitcoin down, because being volatile is its nature and most of the time the end result of price volatility is growth. Bitcoin getting used as a currency needs a larger time space to reach the population which is not possible at present.

[krishnaverma]

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?

This is very much true, especially for low prices items like say $10 or below. If you are buying a newspaper for $1 per day tomorrow, will you agree to pay $2 for it next day because bitcoin prices just jumped.

It might not look that big with one time purchases but will  have a huge effect on common or daily expenses like that on transport.

[mcmge]

Can't agree more. Society will never accept it as a mean of payment under current level of volatility. It just crosses over all the other advantages, because you lose money for nothing and take risk. That is not for everybody.

[joebrook]

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?

It actually true with what he is saying and another way that the retailers can counter this is they immediately sell the crypto that they got from the purchase so that they don't lose money but with the volatility of the crypto the retailers can gain or loss.

[BitcoinNational]

High volatility is clearly not an asset for a currency.  However,  we have seen examples of currencies with a big inflation or deflation.  So technically it could be used. But as a European citizen, would I accept to use bitcoin on a daily basis ?  I am not sure, for the moment I prefer using my Euro.  It seems more secure. 
Last point,  bitcoin cannot be really use as a massive currency, it has not been designed to this purpose.