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How can a currency that is so volatile be used for actually buying and selling stuff? If you were going to put your car up for sale today and you had to set a p

How can a currency that is so volatile be used for actually buying and selling stuff? If you were going to put your car up for sale today and you had to set a price in bitcoin how could you possibly choose a number? Will bitcoin ever settle down to a stable currency?

agumonkey 6y ago
Maybe (maybe) volatility will die after this cycle. It's one theory thrown on the web. Other than that news regarding cryptos these days should be avoided.
JoshTko 6y ago
BTC's main purpose is as a store of value not as a currency. Volatility will eventually go down, think 30+ years.
- Robotbeat 6y ago
  > BTC's main purpose is as a store of value not as a currency. Not if you read Satoshi’s original paper on the topic!
  - washedup 6y ago
    That was over ten years ago. Things change. And it can still be a currency, just not a good one today.
    - DamnYuppie 6y ago
      I think what many people are missing is that it may not be a good currency for small purchases but for moving very large sums of money it can be very convenient. There are no instruments in the world today that would allow you to move from $1,000,000 up and up by fitting it easily and discretely into your pocket. Could be a smartphone, USB drive, or a san disk. People in the west forget that like 85% of the world live in very corrupt countries where confiscation of property/wealth is real. If you want to get your money out of said countries this is the best way to do it hands down!
- xirbeosbwo1234 6y ago
  Its main purpose is as a currency. This is what the original authors clearly intended it to be and what all the popular discussion was about until a year or two ago. The "store of value" narrative is a rationalization of the fact that Bitcoin has failed.
- waynecochran 6y ago
  I don't even know what that means.
  - JoshTko 6y ago
    The most common store of value is cash. But it can be other things like a house, or stocks, or bonds. Anything that you can use to purchase other stuff. Key desirable store of value attributes is that it is widely accepted and doesn't lose value over time.
    - waynecochran 6y ago
      But for something to have "value", at some point, it can be converted to currency .. i.e., I can use it to buy something.
pazimzadeh 6y ago
During a bull market you could sell the car at a discount, and during the bear market, at a markup. FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before.
- ajfjrbfbf 6y ago
  > FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before. Following that logic, pretty much everyone that ever sold bitcoin made a mistake, given we were at an all time high last week or so.
  - goalieca 6y ago
    I am not an economist, but I know that a deflation can be bad for the economy. People are encouraged to wait rather than spend because the price will be lower if you can hold out a little longer. This can become a positive feedback loop which is bad news for the economy. I’m not sure what Bitcoin is really about, but it sure makes for good speculation and day trading.
    - madmax96 6y ago
      The mining reward is not intrinsic to BTC. It can be adjusted as needed (provided 51% of compute agree.)
      - tromp 6y ago
        a majority of hashpower can enforce a softfork (tightening of rules), but has nothing to do with a hardfork (change of rules). If non-miners stick with old rules, then miners using new rules simply get ignored by everybody else.
subhro 6y ago
That is a great question. There are already people that are selling airplanes for bitcoin. See here: http://cubcrafters.com/carboncub/ex/configure http://cubcrafters.com/carboncub/ex/configure
- katbyte 6y ago
  prices are set in USD not BTC, they just accept BTC.
- rplnt 6y ago
  Those are very clearly priced in USD and not in BTC.
  - deleted 6y ago
    [deleted]
3np 6y ago
For the past 10 years or so , bitcoins long-term volatility has consistently gone down. This is yet not as intense as 2017, for example. This is one trend I expect will continue. Eventually if will stabilize.
robcohen 6y ago
The RGB protocol is one attempt to allow tokens on Bitcoin -> https://www.google.com/amp/s/www.coindesk.com/rgb-smart-contracts-bitcoin%3famp=1 https://www.google.com/amp/s/www.coindesk.com/rgb-smart-cont... Another idea is Discreet Log Contracts https://suredbits.com/blog/ https://suredbits.com/blog/
jerry1979 6y ago
You don't have to set the price in Bitcoin. Thinking in terms of opportunity cost tells us that all prices are already set Bitcoin (and every other easily fungible asset).
Terretta 6y ago
When the Euro was careening +/- anywhere from 20% to 100% against USD twenty years ago, everyone still managed. “Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!” While Euro is more stable now, it still changes real time and the system has to handle that. Same methods can apply.
- tablespoon 6y ago
  > “Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!” Six months ago, Bitcoin was literally selling for 25% of its current price (~$11,500), and about half its rise has been in the last two months. Twenty years ago, the Euro didn't look that volatile. It bottomed out at ~70% of its previous high, and it took two years to get there. https://fxtop.com/en/historical-exchange-rates-graph-zoom.php?C1=EUR&C2=USD&A=1&DD1=01&MM1=01&YYYY1=1998&DD2=01&MM2=03&YYYY2=2003&LARGE=1&LANG=en&CJ=0&MM1Y=0&TR= https://fxtop.com/en/historical-exchange-rates-graph-zoom.ph...
  - Terretta 6y ago
    Toggle the “Candlestick chart” on your diagram. Though it could and did change percentage points a day, financial industry was still comfortable how to do business with ongoing volatility. Those same mechanisms are useful here, meaning volatility isn’t the thing that precludes what Citi is discussing.
danieldrehmer 6y ago
As a seller you'd simply denominate the prices in USD, keep some percentage of the btc as it is very likely to appreciate and convert the rest to USD as soon as possible to mitigate fluctuation risk. As a buyer, you'd just purchase btc in the moment preceding the transaction or spend from your own hodlings if it seems like a good moment to reduce exposure. Volatility is not that big of a deal.
mam2 6y ago
wide acceptance would MAKE it stable
payne92 6y ago
You advertise the price in the fiat currency you want. Bitcoin is only used in transit.
- waynecochran 6y ago
  You just kicked the can one level down the road if you take the bitcoin payment ...
marakv2 6y ago
Okay this may come off as naive, or even completely wrong, so give me a break but... What if you tied the price to a trade able good. Eg: $x USD in BTC. While it completely negates the idea of BTC, allows you to list an item for sale at a stable value.

agumonkey 6y ago

Maybe (maybe) volatility will die after this cycle. It's one theory thrown on the web. Other than that news regarding cryptos these days should be avoided.

JoshTko 6y ago

BTC's main purpose is as a store of value not as a currency. Volatility will eventually go down, think 30+ years.

Robotbeat 6y ago
> BTC's main purpose is as a store of value not as a currency. Not if you read Satoshi’s original paper on the topic!
- washedup 6y ago
  That was over ten years ago. Things change. And it can still be a currency, just not a good one today.
  - DamnYuppie 6y ago
    I think what many people are missing is that it may not be a good currency for small purchases but for moving very large sums of money it can be very convenient. There are no instruments in the world today that would allow you to move from $1,000,000 up and up by fitting it easily and discretely into your pocket. Could be a smartphone, USB drive, or a san disk. People in the west forget that like 85% of the world live in very corrupt countries where confiscation of property/wealth is real. If you want to get your money out of said countries this is the best way to do it hands down!
xirbeosbwo1234 6y ago
Its main purpose is as a currency. This is what the original authors clearly intended it to be and what all the popular discussion was about until a year or two ago. The "store of value" narrative is a rationalization of the fact that Bitcoin has failed.
waynecochran 6y ago
I don't even know what that means.
- JoshTko 6y ago
  The most common store of value is cash. But it can be other things like a house, or stocks, or bonds. Anything that you can use to purchase other stuff. Key desirable store of value attributes is that it is widely accepted and doesn't lose value over time.
  - waynecochran 6y ago
    But for something to have "value", at some point, it can be converted to currency .. i.e., I can use it to buy something.

pazimzadeh 6y ago

During a bull market you could sell the car at a discount, and during the bear market, at a markup. FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before.

ajfjrbfbf 6y ago
> FYI, every single time I have sold bitcoin or ethereum (even at historical peaks) it has a been a "mistake" in the sense that 2-3 years later it was worth more than before. Following that logic, pretty much everyone that ever sold bitcoin made a mistake, given we were at an all time high last week or so.
- goalieca 6y ago
  I am not an economist, but I know that a deflation can be bad for the economy. People are encouraged to wait rather than spend because the price will be lower if you can hold out a little longer. This can become a positive feedback loop which is bad news for the economy. I’m not sure what Bitcoin is really about, but it sure makes for good speculation and day trading.
  - madmax96 6y ago
    The mining reward is not intrinsic to BTC. It can be adjusted as needed (provided 51% of compute agree.)
    - tromp 6y ago
      a majority of hashpower can enforce a softfork (tightening of rules), but has nothing to do with a hardfork (change of rules). If non-miners stick with old rules, then miners using new rules simply get ignored by everybody else.

subhro 6y ago

That is a great question. There are already people that are selling airplanes for bitcoin. See here: http://cubcrafters.com/carboncub/ex/configure http://cubcrafters.com/carboncub/ex/configure

katbyte 6y ago
prices are set in USD not BTC, they just accept BTC.
rplnt 6y ago
Those are very clearly priced in USD and not in BTC.
- deleted 6y ago
  [deleted]

3np 6y ago

For the past 10 years or so , bitcoins long-term volatility has consistently gone down. This is yet not as intense as 2017, for example. This is one trend I expect will continue. Eventually if will stabilize.

robcohen 6y ago

The RGB protocol is one attempt to allow tokens on Bitcoin -> https://www.google.com/amp/s/www.coindesk.com/rgb-smart-contracts-bitcoin%3famp=1 https://www.google.com/amp/s/www.coindesk.com/rgb-smart-cont... Another idea is Discreet Log Contracts https://suredbits.com/blog/ https://suredbits.com/blog/

jerry1979 6y ago

You don't have to set the price in Bitcoin. Thinking in terms of opportunity cost tells us that all prices are already set Bitcoin (and every other easily fungible asset).

Terretta 6y ago

When the Euro was careening +/- anywhere from 20% to 100% against USD twenty years ago, everyone still managed. “Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!” While Euro is more stable now, it still changes real time and the system has to handle that. Same methods can apply.

tablespoon 6y ago
> “Euro’s a dollar, Euro’s a dollar twenty, oh, Euro’s a dollar again” just sounds less dramatic than “Bitcoin’s $40K, Bitcoin’s $50K, omg, Bitcoin’s lost $10K and is $40K again!” Six months ago, Bitcoin was literally selling for 25% of its current price (~$11,500), and about half its rise has been in the last two months. Twenty years ago, the Euro didn't look that volatile. It bottomed out at ~70% of its previous high, and it took two years to get there. https://fxtop.com/en/historical-exchange-rates-graph-zoom.php?C1=EUR&C2=USD&A=1&DD1=01&MM1=01&YYYY1=1998&DD2=01&MM2=03&YYYY2=2003&LARGE=1&LANG=en&CJ=0&MM1Y=0&TR= https://fxtop.com/en/historical-exchange-rates-graph-zoom.ph...
- Terretta 6y ago
  Toggle the “Candlestick chart” on your diagram. Though it could and did change percentage points a day, financial industry was still comfortable how to do business with ongoing volatility. Those same mechanisms are useful here, meaning volatility isn’t the thing that precludes what Citi is discussing.

danieldrehmer 6y ago

As a seller you'd simply denominate the prices in USD, keep some percentage of the btc as it is very likely to appreciate and convert the rest to USD as soon as possible to mitigate fluctuation risk. As a buyer, you'd just purchase btc in the moment preceding the transaction or spend from your own hodlings if it seems like a good moment to reduce exposure. Volatility is not that big of a deal.

mam2 6y ago

wide acceptance would MAKE it stable

payne92 6y ago

You advertise the price in the fiat currency you want. Bitcoin is only used in transit.

waynecochran 6y ago
You just kicked the can one level down the road if you take the bitcoin payment ...

marakv2 6y ago

Okay this may come off as naive, or even completely wrong, so give me a break but... What if you tied the price to a trade able good. Eg: $x USD in BTC. While it completely negates the idea of BTC, allows you to list an item for sale at a stable value.