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Would it be correct to say that there is a threshold where the value of a bitcoin makes it reasonable for retailers/small business/etc to invest in using them a

Would it be correct to say that there is a threshold where the value of a bitcoin makes it reasonable for retailers/small business/etc to invest in using them as an actual currency at the register? If that's the case, then it would make good business sense for someone nefarious to pump up the price as much as possible to reach that threshold, wait for the use to become common, then cash out. Effectively manipulating the market into something it didn't need in the first place.

matthewmacleod 9y ago
I don’t see why this would be the case. The utility in currency is not value, but stability; there’s little incentive to use Bitcoin if the value is not stable.
- MBCook 9y ago
  Also in how liquid it is. If a very large retailer decided to do this with the block chain be able to keep up? I know the block size was recently raised but would it be enough?
- solotronics 9y ago
  yeah who would ever want something that appreciated in value /s
  - matthewmacleod 9y ago
    Certainly not retailers in the context of a currency! Things that rapidly appreciate in value also carry the risk of rapidly depreciating in value. That’s fine as an investment vehicle, but a much less attractive prospect in a currency.
    - solotronics 9y ago
      if they don't want to hold there are payment processors that convert instantly to fiat, that argument is invalid.
lojack 9y ago
Businesses wanting to use it probably care more about stability than anything. If there was a limited supply and it wasn't easily divisible then I'd agree with you.
btown 9y ago
Volatility is the important measure here more than price. If a merchant cannot have certainty that the USD value of their hot bitcoin won't fall between the time they accept it and the time they convert it, they'll be loath to make that any substantial portion of revenues.
brownbat 9y ago
It's almost the reverse... high BTC/USD ratios mean high real transaction fees and long confirmations, even for small purchases. The fork made it better, but I don't think this is a solved problem for BTC. Litecoin evangelists will point out that the usability of litecoin is currently far and away better. Part of that is certainly attributable to design, but part of it is attributable to LTC/USD being a better ratio than BTC/USD, meaning a 0.001 tx fee is a few pennies in one and a few dollars in the other. The popularity of a coin increases adoption (and so network effects), but increases hurdles to usability at the same time, it's a really fascinating game theory situation... We might end up with a suite of coins that users bounce between, or maybe some clever altcoin designer will find a clever fix for some of these issues. Not sure.

matthewmacleod 9y ago

I don’t see why this would be the case. The utility in currency is not value, but stability; there’s little incentive to use Bitcoin if the value is not stable.

MBCook 9y ago
Also in how liquid it is. If a very large retailer decided to do this with the block chain be able to keep up? I know the block size was recently raised but would it be enough?
solotronics 9y ago
yeah who would ever want something that appreciated in value /s
- matthewmacleod 9y ago
  Certainly not retailers in the context of a currency! Things that rapidly appreciate in value also carry the risk of rapidly depreciating in value. That’s fine as an investment vehicle, but a much less attractive prospect in a currency.
  - solotronics 9y ago
    if they don't want to hold there are payment processors that convert instantly to fiat, that argument is invalid.

lojack 9y ago

Businesses wanting to use it probably care more about stability than anything. If there was a limited supply and it wasn't easily divisible then I'd agree with you.

btown 9y ago

Volatility is the important measure here more than price. If a merchant cannot have certainty that the USD value of their hot bitcoin won't fall between the time they accept it and the time they convert it, they'll be loath to make that any substantial portion of revenues.

brownbat 9y ago

It's almost the reverse... high BTC/USD ratios mean high real transaction fees and long confirmations, even for small purchases. The fork made it better, but I don't think this is a solved problem for BTC. Litecoin evangelists will point out that the usability of litecoin is currently far and away better. Part of that is certainly attributable to design, but part of it is attributable to LTC/USD being a better ratio than BTC/USD, meaning a 0.001 tx fee is a few pennies in one and a few dollars in the other. The popularity of a coin increases adoption (and so network effects), but increases hurdles to usability at the same time, it's a really fascinating game theory situation... We might end up with a suite of coins that users bounce between, or maybe some clever altcoin designer will find a clever fix for some of these issues. Not sure.