Can Bitcoin be a volatile investment tool and payment method at the same time?

[timerland]

At some point in time I guess it will become either one thing or the other. It cannot stay both at the same time. Can it? Is it a healthy usage method to have it as both?

But this is exactly what has been happening over the past 10 years?

What the question really is I think is how much volatility is hindering adoption. Bitcoin as a payment method will work regardless of its value, since the network is completely distributed. Even if prices drop to close to 0 one day, as long as the network which bitcoin runs on stays the same, there won't be any issues with bitcoin being a form of payment. For example, merchants accepting bitcoin in a period of volatility can still do so, through hedging their exchange rate risks with a third party or by themselves.

I do think that speculation will lead to somewhat decreased actual consumer use, but at the end of the day, will not completely stop consumers adopting it. And as I expect bitcoin volatility to continue to drop in the future like it has, it's not a particularly big problem.

[Herbert2020]

so far in the past 10 years bitcoin has been volatile and also been a payment method. in fact during each volatility cycle when price is at its peak and the volatility is the most, the number of payments increases to its own ATH setting up a record on each cycle.

I do not think so. BTC can be used as a method of payment in some places today, but I do not agree with how accurate it is to belong to everything. At least people can evaluate the value of an asset by calculating BTC's price with USD. And think this is a very expensive thing (e.g. plane). If you were owner of the plane company, would you risk it? Surely, NO!

i think you need to check out all the places that accept bitcoin before making "assumptions" like this here. there are some airlines that are actually accepting bitcoin payments. you see it is not about how big or small the payment amount is in USD, it is about whether someone is willing to accept bitcoin or not. there are many huge sales taking place using bitcoin, even real estate deals worth millions.

[deisik]

I do think that speculation will lead to somewhat decreased actual consumer use, but at the end of the day, will not completely stop consumers adopting it. And as I expect bitcoin volatility to continue to drop in the future like it has, it's not a particularly big problem

Volatility is not really dropping

Though I certainly see why you think it is. You basically look at the prices and see that they haven't been moving much as of recent. So it definitely looks like daily volatility declined a lot, and technically that would be a correct conclusion. But this is not enough, and when you start looking at longer timeframes, e.g. a few months, you will notice that volatility simply moved there. The price doesn't move much on a day by day basis, that's true, but when it moves finally, its movement makes up for all this lack of daily price action. And with a vengeance at that

[Argoo]

This is one of the main questions that we have been trying to answer for a long time, because the fate of Bitcoin actually depends on it. Here we have a contradiction: Bitcoin will always have high price volatility, if it remains decentralized. But he cannot lose his decentralization, otherwise it will be another Bitcoin that we don’t need. Apparently, Bitcoin will have to combine high price volatility and use as a means of payment. In this case, as a means of payment, it will be used primarily by individuals, business structures are unlikely to use it widely with such volatility.

[deisik]

so far in the past 10 years bitcoin has been volatile and also been a payment method. in fact during each volatility cycle when price is at its peak and the volatility is the most, the number of payments increases to its own ATH setting up a record on each cycle.

I do not think so. BTC can be used as a method of payment in some places today, but I do not agree with how accurate it is to belong to everything. At least people can evaluate the value of an asset by calculating BTC's price with USD. And think this is a very expensive thing (e.g. plane). If you were owner of the plane company, would you risk it? Surely, NO!

i think you need to check out all the places that accept bitcoin before making "assumptions" like this here. there are some airlines that are actually accepting bitcoin payments. you see it is not about how big or small the payment amount is in USD, it is about whether someone is willing to accept bitcoin or not. there are many huge sales taking place using bitcoin, even real estate deals worth millions

It is not about merchants at all

Merchants will be willing to accept anything provided there is a demand for such payments and the means of payment doesn't lose too much value in the process. In fact, in countries with high inflation rates (though not like in Zimbabwe, of course), merchants are still accepting local currency despite it being continually devalued by the government. So it is more about regulation (i.e. allowing Bitcoin to be used as a means of payment) and actual desire of holders to spend their coins

And this leads us to an interesting conclusion. If we assume that merchants are not a limiting factor in Bitcoin adoption, we should necessarily expect Bitcoin to be accepted in areas where there is possible interest of Bitcoin holders in paying with coins. And reality seems to support this view as the fields you mention (airlines, luxury business, real estate) are likely to attract big holders who are willing to pay with their bitcoins, and as a result, we see a lot of adoption going on there

[marjil]

I think the point is that bitcoin is a payment method but it's just that people have chosen to use it more as an investment. I am guessing this is likely because they have seen the price escalate very quickly. Equally, there is nothing to stop bitcoin being both and actually I think it does happen. People do use it as a store of wealth/ an investment but sometimes use it as a method of payment - it's never been static.

[SIDDHI777]

Definitely no because it can make huge problems for both parties during a transaction and low volatility and more stability is significant for a good currency and that is why major currencies like Dollar, GBP,EURO and other often used to do international transactions because there stability is well maintained by central governments and banks so the risk during payments are very minimum and negligible so bitcoin can never be a volatile too and a good payment method at the same time

[tenakha]

so far in the past 10 years bitcoin has been volatile and also been a payment method. in fact during each volatility cycle when price is at its peak and the volatility is the most, the number of payments increases to its own ATH setting up a record on each cycle.

I do not think so. BTC can be used as a method of payment in some places today, but I do not agree with how accurate it is to belong to everything. At least people can evaluate the value of an asset by calculating BTC's price with USD. And think this is a very expensive thing (e.g. plane). If you were owner of the plane company, would you risk it? Surely, NO!

i think you need to check out all the places that accept bitcoin before making "assumptions" like this here. there are some airlines that are actually accepting bitcoin payments. you see it is not about how big or small the payment amount is in USD, it is about whether someone is willing to accept bitcoin or not. there are many huge sales taking place using bitcoin, even real estate deals worth millions.

This is just my opinion of what you wrote. 
I am not talking about airlines, I am talking about the companies that produce airplanes. Let us assume that you have worked for many years and have a big company with the money you have accumulated and price of products you produce is one million dollars. Would you exchange for a money you do not know what will be tomorrow?

Yes, there are people who can invest millions into cryptocurrency today, but do not think them like us. e.g. Our risk can be 20k, but theirs can be a million or more.

[CaVO32]

so far in the past 10 years bitcoin has been volatile and also been a payment method. in fact during each volatility cycle when price is at its peak and the volatility is the most, the number of payments increases to its own ATH setting up a record on each cycle. for example last year when the volatility reached its max by the end of 2017 (price rise of ~100% in 1 month) there were the most number of payments taking place.

so the simple answer is YES. and it is not really new and has been happening for so long already for bitcoin. and up until now, bitcoin is one of the major cryptocurrencies that has been used by many establishments as their payment method. they really have to deal with volatility issue, and it's up to the payer and payee to tackle such risk.

[Halmater]

Beeing a volatile investment tool and payment method are very different situations from each other and nothing can be in the opposite situations at the same time. Volatile nature of bitcoin makes it a good invesment tool for people who would like to take risk but it also limit the use of bitcoin as a payment tool.

[romero121]

It has been serving as a volatile investment along with the access to payment. Being volatile is good for trading, but with marketplace if is hard for them to use as a payment source. This can be taken into effective usage by the acceptance between the buyer and seller. Large number of such trades were happening around with some trusted escrow services.

[Indrawan77]

It will be hard to serve both, the volatility is not good as the payment, it will make the customers become confuse and the sellers also hard to determine the price, the volatility one of the reason why stores didn't want to adopt crypto payment, if the volatility swing is not too big then maybe the store owner could tolerate, but for now the swing is too big and too wild

[Slow death]

At some point in time I guess it will become either one thing or the other. It cannot stay both at the same time. Can it? Is it a healthy usage method to have it as both?

Name: epiphanyblockchain
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Date Registered: March 12, 2018, 10:36:14 AM
Last Active: March 04, 2019, 05:29:35 AM

You created this thread and never answered, but you made 6 post after creating this thread. I wonder why create threads if will not answer  in that thread that create?

[gabmen]

It will be hard to serve both, the volatility is not good as the payment, it will make the customers become confuse and the sellers also hard to determine the price, the volatility one of the reason why stores didn't want to adopt crypto payment, if the volatility swing is not too big then maybe the store owner could tolerate, but for now the swing is too big and too wild

Well i agree though probably there will be a transition when times comes that btc becomes more stable. Of course that's not going to happen now since at this stage, it's volatility serves investors better. We're not yet at that point.

[Argoo]

At some point in time I guess it will become either one thing or the other. It cannot stay both at the same time. Can it? Is it a healthy usage method to have it as both?

In principle, the high price volatility of Bitcoin and using it as a means of payment are not very compatible. This is one of the reasons because of which Bitcoin and another decentralized cryptocurrency are not so quickly legalized by the states.
Given the conservatism in the development of Bitcoin, its primarily low scalability, most likely it will be used mainly for very large transactions, which contributes to its very high price.

[Beerwizzard]

In case with cryptocurrencies volatility usually goes along with trade volume. For example if your coin have about 1000$ of daily trade volume then if someone sells hit 100$ worth of tokens then he will probably dump the market, what could be way harder if the trade volume was about 100000$.
It can be an investment tool even now. Like gold or fiat currencies but it is still lacking mass adoption to become useful for payments.

[teejayrichard2]

In my own opinion, the volatility of bitcoin will come to an end in time and will become a full payment method and this will occur when it is fully adopted all across the globe. Bitcoin cannot stay in between, a time will come when the world will fully accept it and then this rapid rise and fall in price will end as bitcoin price will become stable, maybe it will be regulated then.

[MakeMoneyBtc]

At some point in time I guess it will become either one thing or the other. It cannot stay both at the same time. Can it? Is it a healthy usage method to have it as both?

I don't think it's possible that bitcoin will be used for both investments and payments since these two things don't work well together. Think about a store who at the end of the day have collected 1 bitcoin for example. Next day in the morning when they want to exchange that bitcoin into dollars to buy more merchandise or even if they use bitcoin for that the value of that bitcoin could have dropped over the night with 10% so their income also dropped with 10%.

[ricardobs]

Bitcoins can surely be both simultaneously. Bitcoins are a volatile investment tool with a unstable price as well as bitcoins are been used as a payment method in various payment gateways where bitcoins are been used as a mean of payment. Bitcoins are multi-beneficial with a lot of other benefits which makes them totally different from the fiat currencies. Usage of bitcoin should be maximized even more so that the demand is raised back.

[shesheboy]

course yes  . infact we are already doing that and ever since bitcoin discovered on the year 2009 , it is already being use for both purposes   .  its only upt to the user if what he prefer on his bitcoins  but im aware that lots of people are now using thier bitcoin as a form of investment tool because they think that its too valueable to be wasted on some items or on some services online   . better if they can hodl it so that they can earn more income in the latter stages  .