TechieCFO (OP)
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December 20, 2013, 07:03:15 AM |
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No one would sell their home for bit coins unless they are confident they could repurchase a similar home for the same number of bit coins several years later. At this point in time, no one can reliably predict the value of bit coins next week, let alone in a few years.
Until BTC has trustworthy,stable, purchasing power it will be of little relevance to the vast majority of people.
As we have all seen, the price of BTC fluctuates like the wind. Just this past few days, I've seen swings from under $400 to over $700 per coin. That, my friends, is not trustworthy, stable purchasing power.
I would be interested in submitting a BIP. The BIP would propose that if I mine, trade for or buy a bit coin at a moment in time (lets say UTC 12:00:00am on 12-21-xx) that coin will always have the market value at that time, or more.
This would boost confidence and trust in the bit coin by establishing a floor value for any coin held. That's the desire of my idea for a BIP. The above is one possible implementation and I hope some of you will grab hold of this idea and help me pursue it. Without stable purchasing power, the bit coin is doomed.
James
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pungopete468
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December 20, 2013, 07:11:35 AM |
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I think real stability will be attained when BitCoin gains a large following.
Right now it has such a small market cap its very easy to manipulate. The best is yet to come.
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TechieCFO (OP)
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December 20, 2013, 07:42:47 AM |
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How to gain a "large following" if you have no stable purchasing power?
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Bobbydiggital
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December 20, 2013, 07:46:12 AM |
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How to gain a "large following" if you have no stable purchasing power?
dude calm down, you got to go step by step, this currency is still brand new, when theres a new project you have to go from A to B than B to C before reaching the ultimate goal.
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odolvlobo
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December 20, 2013, 07:50:09 AM |
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I would be interested in submitting a BIP. The BIP would propose that if I mine, trade for or buy a bit coin at a moment in time (lets say UTC 12:00:00am on 12-21-xx) that coin will always have the market value at that time, or more.
There is no way to distinguish between coins mined today and coins mined 5 years ago. Anyway, would you peg it to the dollar, the euro, the yen, or perhaps the Zimbabwe dollar?
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Doggey
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December 20, 2013, 08:25:30 AM |
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It's not stable right now, I'm not sure why.
I think it's just because the markets keep on fluctuating right now as people learn more about Bitcoins and come to accept it.
Right now a majority of the established population (USA, Europe, Japan, China, etc) know about Bitcoins, however, not everyone knows how to use them.
If there were a simpler method to attaining Bitcoins such as having it stored on a credit card or on an online easily accessible bank, then it would be more widely accepted.
I still think it's much better than Fiat, and especially when the US Economy collapses the price of a single Bitcoin will skyrocket to proportions I can't even comprehend right now.
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zzzn
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December 20, 2013, 08:57:54 AM |
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Yes it's not stable now. It's an entirely new way of transacting. In ten years time though..
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gripflierGO
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December 20, 2013, 09:06:28 AM |
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No one would sell their home for bit coins unless they are confident they could repurchase a similar home for the same number of bit coins several years later. It is the same as selling for different foreign currency, in several years later you might not be able to repurchase a similar home if you exchange back to your local currency as well. I remember times when dollar lost almost 50% value against my local currency in 4 years.
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TechieCFO (OP)
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December 20, 2013, 04:05:03 PM |
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Yes, exactly my point. Current currencies, like the dollar, euro, yen, etc. continuously change value. I have a feeling "We" (the global community) are all pretty tired of that. So I would propose that Bitcoin should have attributes to protect the value of people's holdings denominated in bit coin
The beauty of bit coin is that it can have whatever attributes we all agree upon. We can make statements like "I don't like the fact that my favorite currency fluctuates so much in value and I cannot control that so lets do something in Bitcoin to eliminate that flaw"
With BitCoin, we can decide, if we like, that it has a starting value (the "floor") and that it has a current value. This would result in Bitcoin layers (layer 1 at $1 a BTC, layer 2 at $2, and so on).
I think we'd all like to see our bit coin wallet show its guaranteed value as well as its current value.
As part of this BIP I would also recommend adding two new transaction types in every wallet. These would be "Buy" and "Sell". In a full implementation, this would eliminate the need for centralized exchanges for moving BTC to or from some currency X. As we have seen in China, the fact that BTC exchanges are centralized actually makes BTC a centralized currency. How so? The People's Bank of China has issued a ruling stating Chinese banks cannot conduct business in BTC. As a result, BTC is affected negatively by reducing its liquidity and exchangeability. Therefore, it is currently a myth that BTC is a decentralized currency. If BTC were truly decentralized, actions by central banks would have no effect on BTC pricing, value, liquidity or exchangeability.
Also as part of this BIP, I'd recommend the BTC software can enable the forward sale of BTC on a decentralized basis. This would allow merchants who can forecast they will collect X BTC over the next six months, to sell it in the immediate present, thereby hedging out any downside risks. This can be done. There would certainly be people to buy these contracts because they know that Y months down the road they will need to spend X bit coin in some purchase. But I emphasize this all needs to be decentralized else BTC is really just fooling itself by claiming its decentralized when a critical KEY element of BTC (exchanges) can and are regulated by central bankers.
Thats my feeling
A. Floor value for Bitcoin B. Current value for Bitcoin C. Buy capability decentralized and inherent in the BTC system D. Sell capability decentralized and inherent in the BTC system E. C and D on a current and forward basis.
These are not trivial changes but it is not trivial that one day in the future, the US FDIC can issue an edict forcing all US banks to not allow deposits into US BTC exchanges. The chinese have already done this.
Right now, BTC is a sitting duck. BTC relies up centralized exchanges for money inflows and outflows that are easily influenced by central bank policies and/or can simply be shut down shortly after bank sponsored state or federal laws make BTC exchanges illegal.
I apologize for the length of the response! I only hope to see BTC grow and prosper.
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Sindelar1938
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December 20, 2013, 04:11:45 PM |
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Ironically, btc will likely need to reach 10k or so before the vol will recede and it becomes useful in commerce
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odolvlobo
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December 20, 2013, 04:39:41 PM Last edit: December 20, 2013, 05:11:04 PM by odolvlobo |
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If you don't want to peg the value to a currency because its value fluctuates, then what do you peg the currency to? What value doesn't fluctuate? Anyway, to be perfectly blunt, pegging the value of a bitcoin is something that I don't think will ever happen. You are going to have to make a new currency.
There is no need for a BIP to propose a wallet with access to a decentralized currency exchange. That's something you can do yourself. Also, the fact that people buy and sell bitcoins on exchanges doesn't make Bitcoin centralized. Bitcoin can exist with or without currency exchanges. Bitcoin doesn't need other currencies.
There is no need for a BIP to show a current price of a bitcoin. That's something you can do yourself (and some wallets already do it).
If you are interested in forward contracts and futures, check mpex.co.
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t3xasdolly
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December 20, 2013, 04:58:49 PM |
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Bitcoin can exist with or without currency exchanges. Bitcoin doesn't need other currencies.
This I agree, but because of network effect, it is hard to use Bitcoin only because most people use different currency right now
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Glermferther
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December 20, 2013, 05:00:56 PM |
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Watching, reading, listening. This dialogue is encouraging. To the OP, as a CFO (hell, it's the internet, you could be just a New Jersey street hustler with skillz) you are no doubt familiar with the concept of value as ultimately being whatever people want or need for survival and prosperity.
These conversations are just as important as the asinine "how can I mine?" conversations.
Frankly, we may be on the edge of the model for a future "global" currency which is not dependent on a nation/state for it's value, but on the collective.
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TechieCFO (OP)
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December 20, 2013, 05:37:03 PM |
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mpex.co - yep I could just go there. Who are they? How long will they exist? why should I line their pockets? Its a brush off answer on the replier's part, but the fact remains. Using mpex.co requires I trust them. I'd rather not go down that road as the BTC is not about trusting some institution.
bitcoin has no stable purchasing power. What item to peg its value to? Of course, you are right, everything tangible fluctuates in value so clearly Bitcoin cannot be pegged to anything.
By implementing an ability, within the wallet, to buy or sell BTC, current or on a forward basis, the BTC system could collect very small fees, far far lower than the fees charged by the exchanges, and hold these fees, in BTC, as reserves, in the system, in a decentralized manner.
then, BTC has backing. that leads to stability of value. Without backing BTC will fluctuate wildly every time a reasonable rumor surfaces. As long as that is the case, BTC will not attract material (e.g.. $Trillions) investment.
the problem remains until we all admit its there and develop a solution.
i'd like to see BTC become a global currency, or even just distributed on 5 billion cell phones, each with $50 of BTC in them for small payment opportunities. But, lets face it, if 7-11 accepts bit coins you can be sure they've been sold and converted to real currency before you've walked out the door with your bottle of water or soda. That is the problem. BTC has no stable purchasing power. No one wants to hold it. Perhaps this will just change in the future? That's wishful thinking to me.
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MargaretsDream
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December 20, 2013, 05:41:51 PM |
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By implementing an ability, within the wallet, to buy or sell BTC, current or on a forward basis, Buy or sell BTC for what ![Huh](https://bitcointalk.org/Smileys/default/huh.gif)
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hankhill69
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December 21, 2013, 05:57:59 AM |
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I dont view bitcoin as a currency but rather as a vehicle of exchange. I can give it value send to somewhere and redeem it for relatively same value wheather it be brazil or china it all translates back to the same thing and same ratios. And also for less market fluctuation I say more followers are needed.
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Skoupi
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Skoupi the Great
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December 21, 2013, 06:26:37 AM |
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Who is going to decide floor value, current value etc. ?
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GarbageName
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December 21, 2013, 06:28:37 AM |
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mpex.co - yep I could just go there. Who are they? How long will they exist? why should I line their pockets? Its a brush off answer on the replier's part, but the fact remains. Using mpex.co requires I trust them. I'd rather not go down that road as the BTC is not about trusting some institution.
bitcoin has no stable purchasing power. What item to peg its value to? Of course, you are right, everything tangible fluctuates in value so clearly Bitcoin cannot be pegged to anything.
By implementing an ability, within the wallet, to buy or sell BTC, current or on a forward basis, the BTC system could collect very small fees, far far lower than the fees charged by the exchanges, and hold these fees, in BTC, as reserves, in the system, in a decentralized manner.
then, BTC has backing. that leads to stability of value. Without backing BTC will fluctuate wildly every time a reasonable rumor surfaces. As long as that is the case, BTC will not attract material (e.g.. $Trillions) investment.
the problem remains until we all admit its there and develop a solution.
i'd like to see BTC become a global currency, or even just distributed on 5 billion cell phones, each with $50 of BTC in them for small payment opportunities. But, lets face it, if 7-11 accepts bit coins you can be sure they've been sold and converted to real currency before you've walked out the door with your bottle of water or soda. That is the problem. BTC has no stable purchasing power. No one wants to hold it. Perhaps this will just change in the future? That's wishful thinking to me.
Until real currency doesn't exist or is hyperinflated out of existence, in which case, you'll be holding BTC and only converting to fiat when you have to. I think this issue is your mindset. You want bitcoin to act like what you are familiar with because the current state of bitcoin is unexplored. The people that will invest in bitcoin are the ones that are comfortable with it. You obviously are not that person. Forbes just had an article that there are something like 250,000 people using bitcoin. That is miniscule! If 10 million or 100 million people use it, then it won't fluctuate as much. Why? Because people will be more likely to bid on a price change (buy or sell) when there are more people watching the price. Just like if you have more contracts on an infrastructure project. I'm perfectly fine with bitcoin fluctuating, because I'm patient and I know that the internet which created this phenomenon will iron out its problems. Do I know what that solutions will be? Nope. But I know that people have innovative ideas that none of us have thought of yet. Just resorting to the same old market strategies that have shown themselves to fail 100 times over, is not what I want to see. With each great innovation comes change, a new way of doing things. We don't use telephone booths, because we don't need them. We don't use horses, because we have automobiles. We don't have scriveners, because we have computers and hard drives. I could go on. There was a time when people said "How will you get anywhere without a horse?" or "Cars breakdown all the time?" or "How can you be near to an object that is 2000 degree?". And yet, the automobile has solved all those problems (through infrastructure, and technological improvements). (Look up Voltare saying it was impossible for humans to go 50 MPH). My point is this, you are coming up with old solutions to new problems. They will be solved, and maybe some of the solutions will be used, but on the whole, it is going fresh thinking for the bitcoin to work. Maybe these aren't even problems...they'll just solve themselves. I've ranted long enough. --GarbageName
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