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Author Topic: [2014-01-12] Banking group sceptical about bitcoin's future, calling currency 'i  (Read 1894 times)
LiteCoinGuy
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January 12, 2014, 06:53:11 PM
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Banking group sceptical about bitcoin's future, calling currency 'inherently fragile'

http://www.scmp.com/business/banking-finance/article/1402262/banking-group-sceptical-about-bitcoins-future-calling

The report by the International Institute of Finance, which represents more than 450 banks and financial institutions, said more regulation of bitcoin exchanges and transactions could strengthen its legitimacy among consumers and ease regulators’ doubts about it.


sounds good.  Smiley


“If it persists, this remarkably high volatility will compromise bitcoin’s capacity to function as a medium of exchange, as it deters most large companies from accepting the digital currency as a form of payment,” the IIF report said.


never heard of bitpay and others?  Huh

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Bitcopia
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January 12, 2014, 09:00:47 PM
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“If it persists, this remarkably high volatility will compromise bitcoin’s capacity to function as a medium of exchange, as it deters most large companies from accepting the digital currency as a form of payment,” the IIF report said.


never heard of bitpay and others?  Huh

The failure of interested parties to understand this point boggles my mind. There is a solution to bitcoin's volatility, and it's relatively simple. Even if you don't understand the solution, you can certainly understand that payment processors in the space offer guaranteed USD conversion. And even with this guaranteed conversion, it's still significantly cheaper than traditional payment processing methods.
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January 12, 2014, 09:29:39 PM
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I also love how they think the volatility trend is staying the SAME, or getting worse.

It isn't. I've been charting Bitcoin since early 2011, and watching live quotes just as long, and the decline severity is different than before. Exchanges are maturing, the depths are getting better which in turn dampens the price oscillations. The banks and others willfully overlook this, because they only want to cast Bitcoin as the "wild and wooly" currency that nobody can use.

Just utter idiocy, as usual.

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January 12, 2014, 09:55:53 PM
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The failure of interested parties to understand this point boggles my mind. There is a solution to bitcoin's volatility, and it's relatively simple. Even if you don't understand the solution, you can certainly understand that payment processors in the space offer guaranteed USD conversion. And even with this guaranteed conversion, it's still significantly cheaper than traditional payment processing methods.

The article did mention "large companies". It's one thing to trust Bitpay to be able to hedge the risk for guaranteeing a price for 10,000 USD worth of BTC, and another if you're talking about millions at a time. Essentially, the payment processor must be significantly bigger than their customers for the customers to have any reasonable trust in their ability to pay up if something goes bad. Failing that, the payment processor must be backed by a serious, established party highly unlikely to default. It's going to be a while before we see that.

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Bitcopia
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January 12, 2014, 10:22:40 PM
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The failure of interested parties to understand this point boggles my mind. There is a solution to bitcoin's volatility, and it's relatively simple. Even if you don't understand the solution, you can certainly understand that payment processors in the space offer guaranteed USD conversion. And even with this guaranteed conversion, it's still significantly cheaper than traditional payment processing methods.

The article did mention "large companies". It's one thing to trust Bitpay to be able to hedge the risk for guaranteeing a price for 10,000 USD worth of BTC, and another if you're talking about millions at a time. Essentially, the payment processor must be significantly bigger than their customers for the customers to have any reasonable trust in their ability to pay up if something goes bad. Failing that, the payment processor must be backed by a serious, established party highly unlikely to default. It's going to be a while before we see that.

Valid point, however, I personally don't think it's going to be more than a few years before there is enough market depth to hedge ten million USD or more per day in transactions without causing any significant volatility. I also think it won't be more than a few years before some seriously established institutions decide to take advantage of bitcoin's relative efficiency.

We'll just have to continue to watch Bitcoin grow into adulthood.  Smiley
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January 13, 2014, 12:20:34 AM
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IMO if banks are recommending bitcoin be regulated, then I do believe the exact opposite must happen lol.  "Regulations" to banks mean price fixing (gold & silver) to thwart competition.  Bitcoin is in direct competition with banks, why would they suggest anything in its favor.

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