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January 09, 2012, 06:34:31 PM |
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Bitcoin is too simplistic of a system to have a "stable" price. There's no, for example, physical mining costs and industrial usage level and technology-usage dependency and shipping costs, all of which relate to gold and affect gold prices. There's just how many people want it compared to how many people want to sell it compared to how many are being produced (the last of which is pretty static). So as soon as:
# of BTC wanted + # of BTC being mined = # of BTC being sold, there will be no stable price.
And it's extra dynamic because people don't really care how much it costs. Basically not a single product or service anywhere in the world costs a static amount of BTC. If $10 buys 1 BTC or $5 US buys 1 BTC, you're still going to use it to buy $10 or $5 US worth of products or services for that BTC. It could be $100 for 1 BTC and you're going to get $100 worth of products or services for that 1 BTC so the value doesn't matter. As long as the price doesn't change, the price is irrelevant.
It'd certainly be nice if someone said here's some service, it costs 5 BTC regardless of USD value, and that's that but nobody's going to do that on a large scale anytime soon. Talk about an unpredictable accounting/budgeting nightmare!
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