Kuwait finance firm suggests trading oil in bitcoins

[DannyElfman]

I would doubt this would ever happen. The reason oil is traded in dollars is because the dollar is so widely traded and the dollar market is so liquid.

There is more oil traded in a day (in terms of market price) then the market cap of bitcoin is. This would result in constant huge swings in price of bitcoin as people try to move in and out of oil.

These factors will change. The dollar will loose liquidity and bitcoin will gain liquidity (massively). Of course this will not happen overnight. Step by step "apostate" countries will leave the dollar sphere, thereby decreasing the importance of USD as reserve currency.

You're reversing cause and effect in your argument: The USD is widely traded and liquid, because oil is traded in dollars. Not the other way around.

The amount of money that is traded in oil is small compared to total trade based in dollars. There is no way that oil causes trillions of dollars of trade per day when only ~$9 billion worth of oil is consumed (and traded) per day (based on oil trading @ $100/barrel)

The dollar is heavily traded and liquid because it is backed by the US economy and the US economy is very big.

[Meuh6879]

  with bitcoin, you "can do".
like buy a 1000L of fuel for storage ... with bitcoin. 



welcome in 2015.
you can bypass the petrolium industry ... with bitcoin. 

[Ron~Popeil]

I would doubt this would ever happen. The reason oil is traded in dollars is because the dollar is so widely traded and the dollar market is so liquid.

There is more oil traded in a day (in terms of market price) then the market cap of bitcoin is. This would result in constant huge swings in price of bitcoin as people try to move in and out of oil.

These factors will change. The dollar will loose liquidity and bitcoin will gain liquidity (massively). Of course this will not happen overnight. Step by step "apostate" countries will leave the dollar sphere, thereby decreasing the importance of USD as reserve currency.

You're reversing cause and effect in your argument: The USD is widely traded and liquid, because oil is traded in dollars. Not the other way around.

The amount of money that is traded in oil is small compared to total trade based in dollars. There is no way that oil causes trillions of dollars of trade per day when only ~$9 billion worth of oil is consumed (and traded) per day (based on oil trading @ $100/barrel)

The dollar is heavily traded and liquid because it is backed by the US economy and the US economy is very big.

Even a portion of that 9 billion of capital flowing into bit coin would be huge for us. That would undoubtedly reverberate widely in western economies. 

[DannyElfman]

I would doubt this would ever happen. The reason oil is traded in dollars is because the dollar is so widely traded and the dollar market is so liquid.

There is more oil traded in a day (in terms of market price) then the market cap of bitcoin is. This would result in constant huge swings in price of bitcoin as people try to move in and out of oil.

These factors will change. The dollar will loose liquidity and bitcoin will gain liquidity (massively). Of course this will not happen overnight. Step by step "apostate" countries will leave the dollar sphere, thereby decreasing the importance of USD as reserve currency.

You're reversing cause and effect in your argument: The USD is widely traded and liquid, because oil is traded in dollars. Not the other way around.

The amount of money that is traded in oil is small compared to total trade based in dollars. There is no way that oil causes trillions of dollars of trade per day when only ~$9 billion worth of oil is consumed (and traded) per day (based on oil trading @ $100/barrel)

The dollar is heavily traded and liquid because it is backed by the US economy and the US economy is very big.

Even a portion of that 9 billion of capital flowing into bit coin would be huge for us. That would undoubtedly reverberate widely in western economies. 

But the point is that oil traders would massively impact the price of bitcoin as they traded into and out of oil.

In order for something to be traded in a certain unit of measure the unit of measure (currency) needs to already be trading at volumes that vastly exceed the additional trading volume that this something would create.

[beetcoin]

the USD is like the nanny you had sex with, and it's too late now because she can threaten to tell your wife unless you concede to her.. you are at her every whim because she has the power to fuck you up, and there's nothing you can do with it  

[NotAtOld]

The US government will have some views on this. Having the USD as the currency for oil is the way the USA has been able to finance their current account deficit for decades.

[evoked22]

Haha USD is not going to be very happy. First China now this

Good work peoples

[Teka]

Sorry but this unlikely to happen for a very long time. If it helps though, I can tell you that there are oil company investors who have money in Bitcoin and an altcoin or two. Some of them are actually currently looking into coinkite/ similiar service for accepting bitcoin at gas stations but so far it's not worth the cost due to the low intreset in the country in question.

[Marlo Stanfield]

the USD is like the nanny you had sex with, and it's too late now because she can threaten to tell your wife unless you concede to her.. you are at her every whim because she has the power to fuck you up, and there's nothing you can do with it 

That is definitely one of the more unique analogies I have ever read regarding the USD. Lol.

[BTCIndia]

Can you please provide us with URL link to official report? I couldn't find it on Markaz website.

[bryant.coleman]

The proposal is not practical, at least for now. The daily transaction volume of Bitcoin is worth just around $50 million. If we subtract all those transactions related to gambling, mining.etc, we will be left with far less.

On the other hand, the daily turnover in the crude oil sector is around $6 billion, which is hundreds of times higher.

[Catmoonglow]

if this were to happen, you can kiss the US support of bitcoin goodbye. there would be a pretty hard crackdown.

[lihuajkl]

The US wouldnot be happy to see it. It is impossible in the near soon. The US is still one of the largest importers of oil.