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A little bit off topic: I was curious if you can really do something with bitcoins aside from speculation. It turns out that there are some places that accept b
by thomasz 15y ago
A little bit off topic: I was curious if you can really do something with bitcoins aside from speculation. It turns out that there are some places that accept bitcoins. But it seems that actually _using_ bitcoins as a currency instead of a speculative asset doesn't seem like a good idea right now:
The sites seem to either try to adjust prices often, or don't. The sites that don't are hopelessly overpriced: Let's say I want the biggest vps for sale at http://lightfoot.dashjr.org/?page=vps http://lightfoot.dashjr.org/?page=vps . I can either go through the hassle of buying 49 bitcoins for ~1450$ at mtgox to pay for the vps, or I could pay 118$ directly. Even the sites that adjust the price have a huge problem: If I convert dollars to bitcoins, I would be tempted to wait a couple of days and sell on mtgox and then buy the service with dollars.
So, buying stuff with bitcoins is not the best idea right now. If you want to do something with bitcoins, buy them and sell them at a higher exchange rate later. The only problem is that we all know that this can't go on forever. Therefore, the exchange rate is bound to go down sooner or later. If that happens, we would be in a mirror inverted situation: Selling stuff for bitcoins would suck. Prices would have to reflect the overhead of continuously adjusting prices and converting bitcoins, putting them at a disadvantage against "real" currency.
Price instability is poisonous for a currency. Some aspects of bitcoins lead to excessive speculation, and therefore, prices will always be unstable, therefore, there is no incentive to use bitcoins as a way to buy or sell (legal) goods.
- _Lemon_ 15y ago> If I convert dollars to bitcoins, I would be tempted to wait a couple of days and sell on mtgox and then buy the service with dollars. Remove the "purchasing a service" element out of the equation and this still holds up -- the temptation to put money aside in bitcoins is still there. As the service is a month-to-month thing, there's a limit on the amount of time you can wait if you did purchase by bitcoins. Also, if the price of bitcoins is going up, it's encouraging customers to pay earlier and earlier which is a good thing as most customers seem to wait until the last day (but server bills come up before then...).
- thomasz 15y agoNo, it's encouraging the customer use an established, stable currency which doesn't force him to closely monitor the exchange rate. Usually, he doesn't want every transaction to be highly speculative.
- Jach 15y agoIt also depends, psychologically, on how early you got in. If you bought a bunch of bitcoins at $1 per BTC (or less), and a company is selling X for 1 BTC, you might think "Ooh, I'm getting X for just $1!" (Or if you do mining, calculate the electricity costs.) Sure, 1 BTC may be worth ~$30 right now, but you presumably want item X right now. Plus you get a physical asset worth ~$30 for what cost you in stable-money $1. (Though with the surge over the past week or so I'd agree with you on avoiding spending for that period if possible.)
- thomasz 15y agoNo way. Say I bought 49 coins for 49$. I wouldn't use them to buy one month of vps. I would convert them to ~1400$ and use 118 of those good old dollars to buy the service, tell myself how clever I am and spend the rest on cocaine or something like that.