A cryptocurrency with volatility can't be used as money

[realaccountakira]

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?

Technically, you could use it, as long as you take it's value at the time of transaction. If you instantly convert a coin's value to fiat then you could successfully use it to transfer funds from point a to point b which could save you money and transaction fees especially if you are sending cross-country.

In the long run however, i'm pretty confident that the big currencies will become stable anyway.

[anntlevel]

Every commodities always have high volatile in their price. Bitcoin right now like commodities and its like a gold or silver. Its store of value and i think it can be used as currency as long merchant accepting bitcoin and government issuing regulation on it

This volatility will end one day because we believe that bitcoin will be the future currency in the world and the whole people will use only bitcoin as their regular currency. Then nobody will think of the price of bitcoin in any other currency of the world. All this is for the time being and you are right that with this volatility no crypto is usable in markets.

[feinter]

Every commodities always have high volatile in their price. Bitcoin right now like commodities and its like a gold or silver. Its store of value and i think it can be used as currency as long merchant accepting bitcoin and government issuing regulation on it

This volatility will end one day because we believe that bitcoin will be the future currency in the world and the whole people will use only bitcoin as their regular currency. Then nobody will think of the price of bitcoin in any other currency of the world. All this is for the time being and you are right that with this volatility no crypto is usable in markets.

The cryptocurrency market is flourishing and has a bright future ahead. The trading volume of prominent cryptocurrency is really high and is gradually increasing. It won’t come as a surprise if one day one of the cryptocurrencies turns out to be a global currency and be widely used for business.

[jeluhtajem]

I always thought that the only bad thing of crypto was the huge volatility, i would love to have my money backed on crypto, but i am afraid of buying one bitcoin at $10000 and then having it worth less than $4000 at the next day.

[conected]

Every commodities always have high volatile in their price. Bitcoin right now like commodities and its like a gold or silver. Its store of value and i think it can be used as currency as long merchant accepting bitcoin and government issuing regulation on it

This volatility will end one day because we believe that bitcoin will be the future currency in the world and the whole people will use only bitcoin as their regular currency. Then nobody will think of the price of bitcoin in any other currency of the world. All this is for the time being and you are right that with this volatility no crypto is usable in markets.

The cryptocurrency market is flourishing and has a bright future ahead. The trading volume of prominent cryptocurrency is really high and is gradually increasing. It won’t come as a surprise if one day one of the cryptocurrencies turns out to be a global currency and be widely used for business.

- I do not think it has a bright future, the current situation does not seem to fit with what you say, the crypto market is experiencing a major storm and the whole market almost plummeted to deep bottom, the signal of recovery is very flickering and unstable. So if one day there is a cryptocurrency become legalized and widely used, I really do not have the courage to use, I was so scared when I woke up in the morning, what I saw was a long red pillar showing on the graph of the market, the range of volatility is too large, can not use as money

[MISERICORDAE PROJECT]

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?

By definition, volatility means 'characterized by or subject to rapid or unexpected change' (Merriam Webster Dictionary).

All traded Fiats are by this definition volatile. And they have continued to exist as national currencies and acceptable money. What Klaus W. Wellershoff should have talked about is the 'classical degree of volatility' of a currency. Is it high, is it average or is it low?  Currencies with low and average volatility are relatively stable over time. When you plot the value of currencies over time, you will see spikes and these spikes are 'rapid and unexpected changes' aka volatility.  

Note that CURRENCY TRADERS CHERISH VOLATILITY & there are numerous reasons as pointed out on this forum in another thread. https://bitcointalk.org/index.php?topic=4394710.msg39139333#msg39139333


A digital currency can be designed to be both STABLE to satisfy & protect the daily utility of ordinary users and moderately VOLATILE to satisfy the appetite of currency traders.

[gabmen]

Every commodities always have high volatile in their price. Bitcoin right now like commodities and its like a gold or silver. Its store of value and i think it can be used as currency as long merchant accepting bitcoin and government issuing regulation on it

This volatility will end one day because we believe that bitcoin will be the future currency in the world and the whole people will use only bitcoin as their regular currency. Then nobody will think of the price of bitcoin in any other currency of the world. All this is for the time being and you are right that with this volatility no crypto is usable in markets.

The cryptocurrency market is flourishing and has a bright future ahead. The trading volume of prominent cryptocurrency is really high and is gradually increasing. It won’t come as a surprise if one day one of the cryptocurrencies turns out to be a global currency and be widely used for business.

- I do not think it has a bright future, the current situation does not seem to fit with what you say, the crypto market is experiencing a major storm and the whole market almost plummeted to deep bottom, the signal of recovery is very flickering and unstable. So if one day there is a cryptocurrency become legalized and widely used, I really do not have the courage to use, I was so scared when I woke up in the morning, what I saw was a long red pillar showing on the graph of the market, the range of volatility is too large, can not use as money

Though i agree that at the current state of things, bitcoin's volatility would make it really hard to be used as money for everyday transactions. But i don't agree that bitcoin doesn't have a bright future based on what's happening right now. Bitcoin's been through a lot in it's young lifetime and what we're seeing is just a phase. Recovery is inevitable whether you believe it or not

[omorfi]

Using Bitcoin as a commodity is much more convenient because of its high volatility. Sellers may not rely too much on a currency for which the value falls and rises very quickly.

[mahilchii]

Yep. Agree with your point and crypto or any currency which has volatile cannot be used across the world due to the fluctuations. I really don't know how crypto will become the next currency replacing paper money in future but I really like crypto to replace paper currency. May be in future the volatile may be stopped and there will be some minor fluctuation may happen like US dollar.

[Sergio444]

Exactly. That is one of the major disadvantage of the cryptocurrencies that has made bitcoin failed to be accepted as a currency. The coins are too volatile and that makes it risky for a company to adopt cryptocrrency to pay for goods and services. That means anytime there is a down trend in the market, there will be a massive company losses

[Yurkov]

I disagree because we are already using cryptos to buy goods and pay the services. It's already been proven and now it keeps becoming more useful in terms of its function and development. So, I believed that cryptos will be more useful in the coming more years.

I think that crypto in future will be more stable and there will be a lot of more chances for goverments to allow using them as normal money.

[shulio]

Every currency that is used in the world is volatile versus another currency or gold. And we use these currencies every day in our life. That argument is nonsense.

[BantiHanter]

Agree because of its unstable value, it makes cryptocurrency unusable for money.
But I don't know in the next few years, whether it can be used as a substitute for money or not.

[darsiderin]

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?

Wrong logic. This would be correct if only one currency existed in the world. The value of any thing is not determined by the type of money for which this thing is bought. I hope correctly expressed his thought))

[serjent05]

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 got your point here. That is if Bitcoin will replace fiat but i dont think it will happen for now and even in the near future. Fiat also changes in value and all commodities has to be based on its value but sad to say, there are time that fiat like dollar are down and yet commodities are still high or expensive. With bitcoin it will be different since the volatility is so high and because of this I dont think it could replace fiat.

[Vicrey]

Cryptocurrency market suffers from volatility for the only reason, the market is still too young and the market cap is really low compared to other virtual assets, so the volatility level is pretty much fair for this market cap level.
Until the price of bitcoin will stabilize around a price range, it's going to be volatility as it is being used by only a short amount of people.

You should consider that one of the reason on why cryptocurrencies are volatile is due to lack of any government intervention/regulation. Since there is no central authority that regulates its transaction and processes, its market supply and demand can be significantly affected by anyone who acquires the most number of bitcoins for price manipulation (also known as whales).
Another thing that you have to consider is when you make bitcoin as a currency, the lesser the volatility, the better as it poses a threat to both the consumer and the producer in terms of profit and loss.

Basically the ideal situation is, cryptocurrencies should be regulated in a way that its volatility can be controlled at some point without having to suffer its investment aspect.

It is true that a currency that has no fixed value cannot be used as permanent currency, Digital currency is so volatile, It should be stable to be a permanent currency, to be able to use by a certain country as mode of payment, it will happen soon, we just need to support crypto currency and have a single currency to represent the crypto sphere.

[xbl1008]

I think nakamoto foreseen that this even where bitcoin faces massive volatility where prices are moving really fast as if that your profit now can be your loss tomorrow or even minutes or hours after thats why as of now bitcoin seeks regulation from the governing bodies on each country or big institutions to control the factors that affects its price, but some time in the future I think the volatility will be gone and crypto currency will be so advance at that time.

[Norihiro]

Why not? It's kind of risky but everyone can adjust everything to that volatility, though it may seem difficult.

[automaticmoney]

the major problem with cryptocurrency is volatility rather than using as payment processor we can use bitcoin as asset and hold for long-term benefits

[Eijrafarm]

I think a cryptocurrency with volatily can still be used as money since it has a value which can be traded or to buy a product.