fiat
The price in fiat is too volatile.
Buy some short contracts with your BTC and you are immune to price changes.
It is too hard/expensive to exchange fiat for bitcoins.
It can be hard, I agree. With an increasing amount of Bitcoin ATMs this should get easier. However, I don't think it is expensive. In fact, there are a lot of exchanges that have a low fee structure.
It is too hard/expensive to exchange bitcoins for fiat.
Again there a a lot of exchanges with a low fee structure. I do not see exchanging bitcoins being too expensive given you are using the right way to do it.
Governments regulating the process of going back and forth from fiat to bitcoin.
I see this as a huge problem as well. Fortunately bitcoin is a global currency and there will almost always be ways to buy bitcoins in a way that protects your financial privacy. However, I wishthis kind of regulation wouldn't exist at all
Merchants driving down the price by immediately converting their bitcoins to fiat.
I do not exactly see this as a problem, tho it is true. As said before, buying a short contract along with our bitcoins makes you immune to price changes. However, this also means that you don't gain any money in fiat terms if the BTC price increases. A lot of people are in for the money that can potentially be made by price changes. Those ppl should't complain in case they lose money instead of gaining money.
Again everyone is free to buy a short contract to hedge against price changes. If you don't do it, you are speculating, and speculators can lose money. No excuses!
If bitcoin get more widespread use, companies might choose not to immediately sell their coins.
Fraud on the fiat/bitcoin exchanges.
I agree that it can be a problem to people who do not hold their bitcoins themselves. However, I have never seen someone lose their BTC to an exchange fraud if he didn't leave any BTC at that exchange.
It's a learning process that will take some time. People are used to being reimbursed if some company holding their funds acts maliciously (except for Cypriots maybe).
With time, people will re-learn that it is more save to have sole control over ones money.
Miners are cashing out their bitcoins for fiat to pay for electricity.
That goes back to lowering the price again, right? Well, it's not the miners fault. The bitcoin algorithm just does this. It (currently) adds ~3600 BTC per day which then are distributed amongst those who pay the price for it. The money is paid to the electricity companies and part of it is for the miners in order to keep the network running. I don't see a problem here. Again if you are afraid this can lower the BTC price too much, go ahead and buy a short contract.
Can you think of any solutions to this problem?
Ok, to sum things up:
- Buying and selling Bitcoin is not easy enough right now. This has to be worked on and will probably come with a premium to pay for easy access (BTC ATMs take a high fee)
- There are ways to buy bitcoins that are not expensive. They just aren't always easy to use
- People selling BTC because of expenses (miners, merchants, companies) cause bitcoin price drops, but everyone can go and buy a short contract to hedge against this.
- Therefore, only who wants to profit from bitcoin price changes has to live with potential losses. There are no excuses.
- Malicious exchanges make it harder to store bitcoin in a safe way. Innovation is needed (hardwarewallets etc.) in this area.
- Regulation makes it harder or bitcoin to be obtained or sold and it makes it harder for companies to offer bitcoin services. Less regulation would help.
That are some solutions I can think of. There are probably a lot more.
