A solution to volatility.

[cbeast]

Daytraders cause Zeno's Paradox. Before Bitcoin can get to 100 it must first get to 50 and before it gets to 50 it must get to 25 etc. As Bitcoin price goes up, it becomes unaffordable for some to buy a whole Bitcoin. Add to that the market manipulation that causes very high volatility at even the smallest fractional levels. Many people feel the solution is to name fractional amounts so they feel like the integer amounts on the left side of the decimal. It's really a false paradox.

The solution is simple. Use the gold model. Only allow whole bitcoins to be sold. Precious metal markets sort of work this way. Sure you can buy gold by the gram, but you pay a lot more so it's not something you do frequently. Gold is best bought by the Troy Ounce at a minimum. Bitcoin can also be sold in fractions, but there should be a premium to do so. This will reduce the day trading that causes the huge fluctuations that makes it feel like Bitcoin is not increasing in value. Buying a whole Bitcoin may also become an exclusive goal for the rich and attract them faster. This way, fractional amounts will not be worth gambling on the markets.

This is of course only a thought experiment and impossible to implement without strict government regulation anyway. However, it behooves the exchanges to consider this proposal because it would likely serve to increase transactional revenue as Bitcoin will have less volatility and greater appeal to conservative investors.

This will also incentivise vendors to accept Bitcoin because they will accrue fractional amounts without paying a premium and can sell them at a premium.

[zimmah]

what a ridiculous idea.

Volatility is not a problem, and in fact it's at this point even desirable to have.

If we would implement your suggestion it would only drive away buyers with smaller pockets.

[Torque]

Not sure how this would work for e-commerce transactions.  That's like saying you can only acquire and spend U.S. Dollars in denominations of $20s, $50s, or $100s.

[mysore]

i dont think its a good solution for the volatility problem.

[Raystonn]

Only allow...

This is of course only a thought experiment and impossible to implement without strict government regulation...

   Your desire to control others is duly noted.

[cbeast]

Of course I got the idea from the gold market. Why do they sell gold by the gram for much more than the ounce? Are they ridiculous too?

[Raystonn]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

[cbeast]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

[Arghhh]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

Try it and see if that works. It's a free market.

[Raystonn]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

That would be coercion.  The exchange would be forcing customers to pay a higher price.  No customers would voluntarily pay a higher price than that offered by sellers.

[cbeast]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

That would be coercion.  The exchange would be forcing customers to pay a higher price.  No customers would voluntarily pay a higher price than that offered by sellers.

Tell that to gold sellers.

[Raystonn]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

That would be coercion.  The exchange would be forcing customers to pay a higher price.  No customers would voluntarily pay a higher price than that offered by sellers.

Tell that to gold sellers.

Customers of the gold market do not pay a higher price than that offered by sellers.  You seem to have a fundamental misunderstanding of how markets operate.

[cbeast]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

That would be coercion.  The exchange would be forcing customers to pay a higher price.  No customers would voluntarily pay a higher price than that offered by sellers.

Tell that to gold sellers.

Customers of the gold market do not pay a higher price than that offered by sellers.  You seem to have a fundamental misunderstanding of how markets operate.

Please re-read the OP. You are completely missing the point. I am suggesting that Bitcoin buyers get the same bulk rate discount for purchases that gold sellers offer.

[cbeast]

tl;dr Bitcoin exchanges should offer bulk discounts for Bitcoin like gold exchanges, groceries, or any other commodity. Because Bitcoin has no actual bulk, this is only a loose analogy.

[Raystonn]

I am suggesting that Bitcoin buyers get the same bulk rate discount for purchases that gold sellers offer.

a) Only a seller can offer a discount.  The exchange is not the one selling the BTC.
b) It makes no sense to offer a bulk discount on virtual goods.  There is no loss of efficiency when selling smaller amounts.  When someone takes delivery of smaller partitions of gold, there is additional cost due to physically splitting the gold into smaller lots.  The processing per lot must now be done on more lots, increasing the price.  This is not an artificial price increase for someone's benefit.  Smaller lots of gold will have a higher cost per unit of weight because of this.  This cost will be passed along in the price.

[BombaUcigasa]

Daytraders cause Zeno's Paradox. Before Bitcoin can get to 100 it must first get to 50 and before it gets to 50 it must get to 25 etc. As Bitcoin price goes up, it becomes unaffordable for some to buy a whole Bitcoin. Add to that the market manipulation that causes very high volatility at even the smallest fractional levels. Many people feel the solution is to name fractional amounts so they feel like the integer amounts on the left side of the decimal. It's really a false paradox.

The solution is simple. Use the gold model. Only allow whole bitcoins to be sold. Precious metal markets sort of work this way. Sure you can buy gold by the gram, but you pay a lot more so it's not something you do frequently. Gold is best bought by the Troy Ounce at a minimum. Bitcoin can also be sold in fractions, but there should be a premium to do so. This will reduce the day trading that causes the huge fluctuations that makes it feel like Bitcoin is not increasing in value. Buying a whole Bitcoin may also become an exclusive goal for the rich and attract them faster. This way, fractional amounts will not be worth gambling on the markets.

This is of course only a thought experiment and impossible to implement without strict government regulation anyway. However, it behooves the exchanges to consider this proposal because it would likely serve to increase transactional revenue as Bitcoin will have less volatility and greater appeal to conservative investors.

This will also incentivise vendors to accept Bitcoin because they will accrue fractional amounts without paying a premium and can sell them at a premium.

How does this solve anything? I was really intrigued, but I see nothing. Volatility is caused by HUGE bitcoin sums, in the thousands, not by tiny 0.01 orders that barely touch the price. By forcing the little people to use bigger orders or nothing and the whales to ... do nothing different... you are achieving what?

tl;dr Bitcoin exchanges should offer bulk discounts for Bitcoin like gold exchanges, groceries, or any other commodity. Because Bitcoin has no actual bulk, this is only a loose analogy.

For selling or buying?

[oda.krell]

Why do they sell gold by the gram for much more than the ounce?

Because someone is willing to pay the price, without coercion.

Exactly. I am not suggesting coercion. Why don't  Bitcoin exchanges do this voluntarily?

Sure. They could.

That would be the precise moment I open up an exchange that still does sell fractional coins. Wanna guess how it would go from there?


Please don't confuse the cartel-like market structure of gold (for historic reasons) and/or market inefficiencies (for the f*cking reason that gold is way more old school) with the emergent phenomena from a maximally free market.

The current Bitcoin market ecosystem has a lot of obnoxious properties (comparably high fees, lack of transparency, huge counterparty risk), but restrictions on traded quantities for the sake of restriction alone is - luckily - not one of them

[xybersurfer]

what's the point of a currency that only the rich can use?

[alexeft]

Daytraders cause Zeno's Paradox. Before Bitcoin can get to 100 it must first get to 50 and before it gets to 50 it must get to 25 etc. As Bitcoin price goes up, it becomes unaffordable for some to buy a whole Bitcoin. Add to that the market manipulation that causes very high volatility at even the smallest fractional levels. Many people feel the solution is to name fractional amounts so they feel like the integer amounts on the left side of the decimal. It's really a false paradox.

The solution is simple. Use the gold model. Only allow whole bitcoins to be sold. Precious metal markets sort of work this way. Sure you can buy gold by the gram, but you pay a lot more so it's not something you do frequently. Gold is best bought by the Troy Ounce at a minimum. Bitcoin can also be sold in fractions, but there should be a premium to do so. This will reduce the day trading that causes the huge fluctuations that makes it feel like Bitcoin is not increasing in value. Buying a whole Bitcoin may also become an exclusive goal for the rich and attract them faster. This way, fractional amounts will not be worth gambling on the markets.

This is of course only a thought experiment and impossible to implement without strict government regulation anyway. However, it behooves the exchanges to consider this proposal because it would likely serve to increase transactional revenue as Bitcoin will have less volatility and greater appeal to conservative investors.

This will also incentivise vendors to accept Bitcoin because they will accrue fractional amounts without paying a premium and can sell them at a premium.

You think we should kill one of the biggest advantages bitcoin has over gold?

[cbeast]

I am suggesting that Bitcoin buyers get the same bulk rate discount for purchases that gold sellers offer.

a) Only a seller can offer a discount.  The exchange is not the one selling the BTC.
b) It makes no sense to offer a bulk discount on virtual goods.  There is no loss of efficiency when selling smaller amounts.  When someone takes delivery of smaller partitions of gold, there is additional cost due to physically splitting the gold into smaller lots.  The processing per lot must now be done on more lots, increasing the price.  This is not an artificial price increase for someone's benefit.  Smaller lots of gold will have a higher cost per unit of weight because of this.  This cost will be passed along in the price.

Right. That's why I only called this a thought experiment. It could theoretically be done, but then the only advantage would be driving up the price and not helping poor customers.