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Author Topic: Bitcoin volatility actually GOOD for business! (with proof)  (Read 1676 times)
CarlesPuyol
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May 10, 2014, 08:00:35 PM
 #21

bitcoin is good for business, especially for countries with high tax.


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May 11, 2014, 01:07:01 AM
 #22

This concept only works if the merchant is a speculator himself. What if the price doesn't make a recovery?

Being a merchant is being a speculator. When you buy (or produce) stock, you have to believe to be able to sell it with a profit, but that's not guaranteed -- hence speculation. When you accept any currency for payment, you have to believe it keeps its value well enough to be able to restock and pay your other expenses, and to actually be allowed to keep it. This is not guaranteed either, and ranges from inflation and unexpected new taxes to outright disownment (see Cyprus).

There's no principal difference in which currency a merchant accepts. This analysis tries to compare the quantitative difference of being exposed to $ or BTC in the recent past, which of course is a poor indicator for the future.

There are worse flaws than assuming merchants are open to assume risk for a profit here. I think assuming a constant sales value in $ per day, payed in BTC, is a bad assumption. I'd expect BTC holders to prefer to spend on peaks, and pay in $ in valleys, which may undo the cost-averaging effect. Also I'd expect rising BTC sales over time, which will shift more sales to the time in 2014 which has a lesser performance.



So wrong.  Merchants are not speculators, they are manufacturers or distributors or both.

Prices are stable in short term.  If you are a retailer (distributor) you buy something wholesale and sell it retail.  Your inventory liability is fixed.  The cost doesn't go up and down every day. Nobody reprice on a day to day basis

If you are manufactor,  you buy raw materials (COGS) and produce goods.  You also expect stable prices.




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theonewhowaskazu
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May 11, 2014, 02:55:32 AM
 #23

while the merchant likely won't want the risk (because there is risk) I think that services like Bitpay could benefit from this. If they benefit, they could lower fees (if you think about it this way, the fees are compensated by the "interest" Bitpay pays you for holding your funds for a while so they can benefit from this method). Imagine bitpay with 0% fees.

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