Denominate prices in a basket of currencies and bitcoin

[P4man]

Just an idea; one of the problems retailers have with bitcoin is its volatility; its almost impossible to price something in bitcoins without adjusting prices on the fly. Heck, even on this forum people usually denominate in dollar or euro when selling hardware.

Why dont we create a currency basket that consists of equal amounts of traditional currencies (say,  Euro, Dollar and Yen) on the one hand, and bitcoins on the other (or even a mix of various crypto currencies, one could add small amounts of litecoin and namecoin to the basket) ? The price of this basket can easily be calculated automatically and listed on a website.

The point is not so much trading directly in this currency basket -though if a trusted party would offer it, why not-, for starters the point is just being able to denominate prices that can remain reasonably stable, particularly if one believes a demise of the dollar or euro will result in a spike of bitcoin prices. Upon purchase, the price of this basket is simply converted in to whatever currency the customer wants to pay in. The idea is similar to the "ECU" that preceded the Euro.

[1714896499]

1714896499

[SolidBitShop]

Just an idea; one of the problems retailers have with bitcoin is its volatility; its almost impossible to price something in bitcoins without adjusting prices on the fly. Heck, even on this forum people usually denominate in dollar or euro when selling hardware.

Why dont we create a currency basket that consists of equal amounts of traditional currencies (say,  Euro, Dollar and Yen) on the one hand, and bitcoins on the other (or even a mix of various crypto currencies, one could add small amounts of litecoin and namecoin to the basket) ? The price of this basket can easily be calculated automatically and listed on a website.

The point is not so much trading directly in this currency basket -though if a trusted party would offer it, why not-, for starters the point is just being able to denominate prices that can remain reasonably stable, particularly if one believes a demise of the dollar or euro will result in a spike of bitcoin prices. Upon purchase, the price of this basket is simply converted in to whatever currency the customer wants to pay in. The idea is similar to the "ECU" that preceded the Euro.

I don't get it. Try to explain a bit more. But there is no problem with retailers. Only problem is that no one who doesnt take bitcoin seriously wont ever accept btc as payment. Or if they do they will charge extra. So the problem is only in trust and understanding of bitcoin. If you for example sell something today for aprox 10 BTC, so if you will exchange them you will get ~24 USD, but you can fear that btc will collapse overnight and you will lose. The fear is the mind killer and prevent bitcoin in growing stronger. For example in my shop I always have greater exchange ratios than any other places like btc exchanges. if it is 2.3 I will have 2.5 and so on. Even now during the Conference time my shop offers 4.6276$ per bitcoin. Crazy isn't it? But i have a trust in bitcoin and I'm willing to reduce my income even lose for promoting btc for something bigger than just exchange ratios. I want the community to see that there is at least one person to whom bitcoin isn't just a "new geek thingy", its THE THING and I treat it very serious and with respect.

So the problem lays in fear of btc collapse (+well maybe some additional, about not precise legal matter of bitcoin) but this fear is the worst, we shouldn't be afraid of it


-SolidBitShop-

[ArsenShnurkov]

http://en.wikipedia.org/wiki/Purchasing_power_parity

[P4man]

 If you for example sell something today for aprox 10 BTC, so if you will exchange them you will get ~24 USD, but you can fear that btc will collapse overnight and you will lose. The fear is the mind killer and prevent bitcoin in growing stronger. For example in my shop I always have greater exchange ratios than any other places like btc exchanges. if it is 2.3 I will have 2.5 and so on. Even now during the Conference time my shop offers 4.6276$ per bitcoin. Crazy isn't it?

The idea is that you wouldnt price your item as costing 10 BTC or $25, but 10 "basket" (someone pitch me a good name ).
If bitcoin price goes up or down by 50%, the actual price of your product would still fluctuate, but only by 25% since half of the basket consists of fiat currencies. So you wouldnt have to adjust your prices as frequently and/or you diminish the volatility risk by half if you dont adjust your prices. 

If your business likes to keep +- half the revenue in bitcoin or does a similar percentage of its purchases and expenses in bitcoin, you would almost never have to adjust prices. So its simply an intermediary step, something inbetween denominating prices in dollar and denominating  btc. If/when BTC prices become more stable and/or business start buying their goods more in BTC than $, you could drop it, but thats still a loooong way off.

BTW, its not only merchants Im thinking off, its all kinds of transactions, also person to person.

[SolidBitShop]

Ohh I get it now.

Its sounds like good idea for those who have doubts about btc but they would want to start using it. But I'm not sure how would you technically make that basket?
It should have speed of transaction and should not have any troubles. But it sound's like some sort of new currency. Its nice idea but i think it needs to be developed a bit more to meet the req of the market. And I don't think many ppl will support it coz it have fiat currency in it.
As it is now, everything is exchanged for fiat currency. You can purchase gift cards with prepaid value,and use it on various site. That is the bitcoin killer. You have purchased that card using BTC but you are still depended on fiat currency it is a great idea. But whole community needs to have more goods to purchase directly by btc.

If you would like to help the bitcoin I have only one thing on my mind to extend the chain or close it.