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You need to adjust the price just like you need to ajust prices for any currency. It's just that the value of 1 bitcoin changes faster than other currencies, as

by nawitus 14y ago

You need to adjust the price just like you need to ajust prices for any currency. It's just that the value of 1 bitcoin changes faster than other currencies, as it's now being adopted at a quick rate.

dragontamer 14y ago
A new domain name has been 10 USD from Namecheap for the last decade. A new domain name in BTC however, has varied between 1 BTC and 0.1 BTC in just the past two months. BTC as a proxy for USD is still useful IMO, it gives us a way to avoid Paypal and other online processors. But for it to be a USD replacement, it needs to first settle down and stabilize.
- TillE 14y ago
  > it gives us a way to avoid Paypal and other online processors How do you buy and cash out your BTC? You still have to make all those real money transactions, just with the exchange rather than directly with the merchant. Seems a bit pointless to me.
  - dragontamer 14y ago
    Touche. Although, a BTC exchange + BTC merchant together have to only beat out on Paypal's charges. BTC seems to be stable enough that Paypal's 2.9% charge per transaction makes BTC a useful competitor. That said, now you have to trust both the BTC exchange and Merchant. But that is a bit easier if you can put up with the downsides to BTC (no chargebacks, etc. etc.)
    - dobbsbob 14y ago
      It's not just about fees, Paypal has banned half the world from using their services (India, China) and dictates what you're allowed to sell, arbitrarily seizes money for months on end, and can be easily frauded with no protection for merchants. You also don't have to trust any exchange, you can walk to your local coffee shop and trade for cash off the books with anybody from localbitcoins.com
    - wmf 14y ago
      In a common scenario where the customer pays 1% to Coinbase and the merchant pays 2.6% to BitPay, Bitcoin comes out worse than Paypal or credit cards.
      - fnordfnordfnord 14y ago
        In a common scenario where Paypal freezes your account for dubious reasons and then refuses to answer your telephone calls or emails, Bitcoin comes out ahead. In another common scenario where a Senator named Lieberman makes a press release accusing Wikileaks of criminal activity, and other payment processors simply refuse to conduct transactions for you, Bitcoin also comes out ahead.
        wmf 14y ago
        Bitcoin is now regulated in the US, so it's only a matter of time until Coinbase, CoinLab, and BitPay get Lieberman'ed.
        dragontamer 14y ago
        In the common scenario where my supplier screws me over on Ebay, I can put a "cancel order" on my credit card. I have no such recourse to do that with Bitcoins. Bitcoins offer no consumer protection right now. Once exchanged, the other party holds the money.
        fnordfnordfnord 14y ago
        OTOH, if you're the supplier, there is no risk for you to go ahead and send the stuff if you were paid in bitcoin.
        dragontamer 14y ago
        Precisely. No risk at all. You don't even have to send your stuff to your client, because you've already been paid. Bitcoins right now puts the consumer / supplier relationship upside down. The supplier is already right... not the customer. I wonder if any customers will prefer to paying BTC over Paypal, especially after they've been defrauded a few times.
  - nawitus 14y ago
    You can also earn bitcoins, which will become more prevalentover time.
- nawitus 14y ago
  "A new domain name has been 10 USD from Namecheap for the last decade. A new domain name in BTC however, has varied between 1 BTC and 0.1 BTC in just the past two months." I agree that the value of bitcoins changes faster than other currencies. However, the fact remains that the prices for all currencies change. Domain names are the exception, but inflation adjusts prices upwards of almost all commodities. "BTC as a proxy for USD is still useful IMO, it gives us a way to avoid Paypal and other online processors. But for it to be a USD replacement, it needs to first settle down and stabilize." I disagree with your definition of "proxy". Bitcoin fits the definition of currency, not "proxy-currency" in my opinion. It's true that the currency will benefit when it's value will stabilize, as the currency is currently being adopted.
  - dragontamer 14y ago
    USD changes at a rate of 3% per year, according to the CPI. Bitcoin is currently changing at a rate of 50% per month. Volatility is a bad thing for currency. Bitcoin has too much of it right now. And sorry, as long as BTC keeps changing by 50%+ per month, it will only be a proxy currency. If BTC is to become a true currency, it will need to settle down to ~3% / year volatility, like the other major currencies of the world.
    - unclebucknasty 14y ago
      Yeah, this. Right now, BTC is more of a speculative investment than it is a currency. You just can't have insane volatility or even too much uni-directional movement in your medium of exchange. For a merchant to offer something at a particular BTC price, that merchant would have to update its prices at least daily, if not more so. This to avoid losing money or overcharging himself out of the market, depending on the direction of the currency. It's just not practical at this point. And, it's a catch-22: As long as it's a speculative investment, it's likely to remain volatile. And, as long as it remains volatile, it's likely to remain a speculative investment vs. a "true" currency.
    - BrianEatWorld 14y ago
      Thats a bit of a logical fallacy. Just because modern currencies tend to not exhibit volatility, doesn't mean its a bad trait for a currency. In the past, ideas like "menu costs" might make it less favorable because of sticky prices not aligning with a free floating currency, but that isn't as much of an issue anymore. The real issue would be if the underlying fundamentals, IE the supply and demand of the currency, didn't align, making the volatility due to human expectations and not genuine factors. While I think that a good deal of the BTC volatility is due to human expectations, it just bothers me when people try and use older macro ideas when explaining Bitcoin.
- rytis 14y ago
  "settle down and stabilize." Depends how you look at it. From BTC point of view it is the USD that's highly unstable and dropping in value... It's all relative.
  - dragontamer 14y ago
    Except we can look at the price of computers, milk, eggs, oil, etc. etc. ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt Across all of our goods, the total change (ie: CPI) between January 2013 and Febuary 2013 changed from 230.280USD to 232.166USD. A difference of 0.8% In the same period, BTC changed from 13.51 to 20.41, a difference of 51.1%
  - alexchamberlain 14y ago
    It's common to value a currency against a basket of other currencies; you would still see BTC's volatility be huge.
    - fnordfnordfnord 14y ago
      Because of currency manipulation, some would rather think of bitcoin's value with respect to a basket of commodities instead of currencies.

by nawitus 14y ago

dragontamer 14y ago

A new domain name has been 10 USD from Namecheap for the last decade. A new domain name in BTC however, has varied between 1 BTC and 0.1 BTC in just the past two months. BTC as a proxy for USD is still useful IMO, it gives us a way to avoid Paypal and other online processors. But for it to be a USD replacement, it needs to first settle down and stabilize.

TillE 14y ago
> it gives us a way to avoid Paypal and other online processors How do you buy and cash out your BTC? You still have to make all those real money transactions, just with the exchange rather than directly with the merchant. Seems a bit pointless to me.
- dragontamer 14y ago
  Touche. Although, a BTC exchange + BTC merchant together have to only beat out on Paypal's charges. BTC seems to be stable enough that Paypal's 2.9% charge per transaction makes BTC a useful competitor. That said, now you have to trust both the BTC exchange and Merchant. But that is a bit easier if you can put up with the downsides to BTC (no chargebacks, etc. etc.)
  - dobbsbob 14y ago
    It's not just about fees, Paypal has banned half the world from using their services (India, China) and dictates what you're allowed to sell, arbitrarily seizes money for months on end, and can be easily frauded with no protection for merchants. You also don't have to trust any exchange, you can walk to your local coffee shop and trade for cash off the books with anybody from localbitcoins.com
  - wmf 14y ago
    In a common scenario where the customer pays 1% to Coinbase and the merchant pays 2.6% to BitPay, Bitcoin comes out worse than Paypal or credit cards.
    - fnordfnordfnord 14y ago
      In a common scenario where Paypal freezes your account for dubious reasons and then refuses to answer your telephone calls or emails, Bitcoin comes out ahead. In another common scenario where a Senator named Lieberman makes a press release accusing Wikileaks of criminal activity, and other payment processors simply refuse to conduct transactions for you, Bitcoin also comes out ahead.
      - wmf 14y ago
        Bitcoin is now regulated in the US, so it's only a matter of time until Coinbase, CoinLab, and BitPay get Lieberman'ed.
      - dragontamer 14y ago
        In the common scenario where my supplier screws me over on Ebay, I can put a "cancel order" on my credit card. I have no such recourse to do that with Bitcoins. Bitcoins offer no consumer protection right now. Once exchanged, the other party holds the money.
        fnordfnordfnord 14y ago
        OTOH, if you're the supplier, there is no risk for you to go ahead and send the stuff if you were paid in bitcoin.
        dragontamer 14y ago
        Precisely. No risk at all. You don't even have to send your stuff to your client, because you've already been paid. Bitcoins right now puts the consumer / supplier relationship upside down. The supplier is already right... not the customer. I wonder if any customers will prefer to paying BTC over Paypal, especially after they've been defrauded a few times.
- nawitus 14y ago
  You can also earn bitcoins, which will become more prevalentover time.
nawitus 14y ago
"A new domain name has been 10 USD from Namecheap for the last decade. A new domain name in BTC however, has varied between 1 BTC and 0.1 BTC in just the past two months." I agree that the value of bitcoins changes faster than other currencies. However, the fact remains that the prices for all currencies change. Domain names are the exception, but inflation adjusts prices upwards of almost all commodities. "BTC as a proxy for USD is still useful IMO, it gives us a way to avoid Paypal and other online processors. But for it to be a USD replacement, it needs to first settle down and stabilize." I disagree with your definition of "proxy". Bitcoin fits the definition of currency, not "proxy-currency" in my opinion. It's true that the currency will benefit when it's value will stabilize, as the currency is currently being adopted.
- dragontamer 14y ago
  USD changes at a rate of 3% per year, according to the CPI. Bitcoin is currently changing at a rate of 50% per month. Volatility is a bad thing for currency. Bitcoin has too much of it right now. And sorry, as long as BTC keeps changing by 50%+ per month, it will only be a proxy currency. If BTC is to become a true currency, it will need to settle down to ~3% / year volatility, like the other major currencies of the world.
  - unclebucknasty 14y ago
    Yeah, this. Right now, BTC is more of a speculative investment than it is a currency. You just can't have insane volatility or even too much uni-directional movement in your medium of exchange. For a merchant to offer something at a particular BTC price, that merchant would have to update its prices at least daily, if not more so. This to avoid losing money or overcharging himself out of the market, depending on the direction of the currency. It's just not practical at this point. And, it's a catch-22: As long as it's a speculative investment, it's likely to remain volatile. And, as long as it remains volatile, it's likely to remain a speculative investment vs. a "true" currency.
  - BrianEatWorld 14y ago
    Thats a bit of a logical fallacy. Just because modern currencies tend to not exhibit volatility, doesn't mean its a bad trait for a currency. In the past, ideas like "menu costs" might make it less favorable because of sticky prices not aligning with a free floating currency, but that isn't as much of an issue anymore. The real issue would be if the underlying fundamentals, IE the supply and demand of the currency, didn't align, making the volatility due to human expectations and not genuine factors. While I think that a good deal of the BTC volatility is due to human expectations, it just bothers me when people try and use older macro ideas when explaining Bitcoin.
rytis 14y ago
"settle down and stabilize." Depends how you look at it. From BTC point of view it is the USD that's highly unstable and dropping in value... It's all relative.
- dragontamer 14y ago
  Except we can look at the price of computers, milk, eggs, oil, etc. etc. ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt Across all of our goods, the total change (ie: CPI) between January 2013 and Febuary 2013 changed from 230.280USD to 232.166USD. A difference of 0.8% In the same period, BTC changed from 13.51 to 20.41, a difference of 51.1%
- alexchamberlain 14y ago
  It's common to value a currency against a basket of other currencies; you would still see BTC's volatility be huge.
  - fnordfnordfnord 14y ago
    Because of currency manipulation, some would rather think of bitcoin's value with respect to a basket of commodities instead of currencies.