15 ms·

Tell me again why any sane person would accept bitcoin as a currency for goods?

hosay123 14y ago
Please quit with the superficial throwaway comments, that's two content-free crowd-pleasers in under 15 minutes. In answer to your question, pricing goods in a fluctuating currency is a well understood problem, and even with a single Google you'd find the Bitcoin community already have established solutions. The short answer: spot price is 99% noise, so don't use it. Unapologetic for being annoyed at this stuff. Check parent's submission history, top-voted wise cracks have a ripple effect on the remaining comments for a particular submission.
- ajross 14y ago
  I just did several googles, and can't find an answer to that question. Maybe you could enlighten us on the "well established solutions" (or just some google search terms to pull them up)? It seems like a serious question to me. Currency volatility in the real world is generally considered a near-disaster-level problem. So if Bitcoin has truly solved this in a "well established" way I'm sure there are a bunch of national bank managers that would love to hear about it.
  - hosay123 14y ago
    There is at least one web service that produces an average over some period. As to how you pick a good weighting, it probably depends a lot on how fast you intend to flip outgoing goods/incoming currency, or where you store value. Try terms like "VWAP", "Bitcoin average price" and so on. I have no doubt a momentary search over on SSRN will produce a hundred papers entirely dedicated to formalizations of this process.
    - georgemcbay 14y ago
      Once you formalize the process, how do you get people to buy into it? This seems like a typical techie thing of coming up with a mathematical solution to an issue that is really more about human psychology. When you have admittedly linkbaity websites screaming "Bitcoint has lost half of its value" all over the place, good luck explaining to people that we should really be averaging the value and everything is fine, and keep selling your goods at the current average price, etc. This all speaks to the immense difficultly of real-world adoption of any currency that isn't backed by real government policy.
- nemo 14y ago
  What should you google to find out about how people with goods/services are handling instability in currency value? Even if a vendor updated pricing indexed to the dollar regularly (which is not desirable at all) it's seems like it would still be hard to manage keeping any cash reserves of a currency that is not a stable store of value. I'd be interested to read about what vendors are doing to deal with this.
- knowaveragejoe 14y ago
  The problem is the prices of physical goods through bitcoin-accepting vendors are pinned to USD prices, albeit by proxy through bitcoin. Automatically adjusting the price of items, even using an average, doesn't change the fact both you and the vendor run a high risk of taking a potentially huge opportunity cost.
mtraven 14y ago
If you're selling something illegal, for instance? https://en.wikipedia.org/wiki/Silk_Road_(marketplace) https://en.wikipedia.org/wiki/Silk_Road_(marketplace)
lukifer 14y ago
It's a young experiment, it'll take time to see what happens with it. Although according to WordPress, their primary motivation for accepting it as payment is to facilitate certain international transactions. (There are a few existing fiat currencies that make BTC look rock-solid by comparison.)
- georgemcbay 14y ago
  I don't really have any issue with services like WordPress (whose per-user support costs are likely negligible for most users) accepting Bitcoin. In those cases the PR is probably worth it regardless of the the price swings. My issue is more with physical goods. Lots of people seem to be looking forward to a future of buying physical goods with Bitcoin or bitcoin-alike currencies, which in some ways would be nice but I haven't seen a practical solution to the problem of potentially huge value swings. Nobody wants to sell a real physical good paid for with a stable currency to someone else in a currency that can lose half of its value or more in hours or even days.
waffenklang 14y ago
Because it offers the opportunity to trade without the shadow market of banks and financial regulators which get pennys of every damn good you buy without doing something important. the only problem is exchanging bitcoins which is the root of all evil for a non-backed per-trade-valued currency.
- danielweber 14y ago
  I can go right to my online bank and have them send a payment to anyone in the country, at zero charge.
  - DougWebb 14y ago
    The charge is hidden. The US dollar, and every other national-bank-backed currency, is debt-based. For every dollar that's put into the economy by the national bank, a bit more than a dollar is owed to the bank. That makes it impossible to pay back the debt without inflating the currency, which reduces the value of the dollar (what it can buy) to less than the original dollar+debt amount. That's the short version of the explanation I've read about the "evils" of central banks and debt-based currencies. I'm no expert, so I can't really judge the accuracy of this explanation or whether or not it's evil.
ChuckMcM 14y ago
The only reason would be that any other currency has a higher personal risk of using. But given the trading activity I'm guessing one of the hoarders had decided to "actualize" their earnings. Or maybe they are raising cash to buy ASIC miners. Who really knows.
dexen 14y ago
If enough people did... the exchange rate would not matter very much ;-)
wmil 14y ago
Some countries forbid private currency exchanges (ie Venezuela) or face international sanctions (ie Iran). If you're middle class you may be worried about a government collapse, ending up as a refugee, hyperinflation, or government seizure. Bitcoin is a reasonable way to store wealth in those cases.

Please quit with the superficial throwaway comments, that's two content-free crowd-pleasers in under 15 minutes. In answer to your question, pricing goods in a fluctuating currency is a well understood problem, and even with a single Google you'd find the Bitcoin community already have established solutions. The short answer: spot price is 99% noise, so don't use it. Unapologetic for being annoyed at this stuff. Check parent's submission history, top-voted wise cracks have a ripple effect on the remaining comments for a particular submission.

ajross 14y ago
I just did several googles, and can't find an answer to that question. Maybe you could enlighten us on the "well established solutions" (or just some google search terms to pull them up)? It seems like a serious question to me. Currency volatility in the real world is generally considered a near-disaster-level problem. So if Bitcoin has truly solved this in a "well established" way I'm sure there are a bunch of national bank managers that would love to hear about it.
- hosay123 14y ago
  There is at least one web service that produces an average over some period. As to how you pick a good weighting, it probably depends a lot on how fast you intend to flip outgoing goods/incoming currency, or where you store value. Try terms like "VWAP", "Bitcoin average price" and so on. I have no doubt a momentary search over on SSRN will produce a hundred papers entirely dedicated to formalizations of this process.
  - georgemcbay 14y ago
    Once you formalize the process, how do you get people to buy into it? This seems like a typical techie thing of coming up with a mathematical solution to an issue that is really more about human psychology. When you have admittedly linkbaity websites screaming "Bitcoint has lost half of its value" all over the place, good luck explaining to people that we should really be averaging the value and everything is fine, and keep selling your goods at the current average price, etc. This all speaks to the immense difficultly of real-world adoption of any currency that isn't backed by real government policy.
nemo 14y ago
What should you google to find out about how people with goods/services are handling instability in currency value? Even if a vendor updated pricing indexed to the dollar regularly (which is not desirable at all) it's seems like it would still be hard to manage keeping any cash reserves of a currency that is not a stable store of value. I'd be interested to read about what vendors are doing to deal with this.
knowaveragejoe 14y ago
The problem is the prices of physical goods through bitcoin-accepting vendors are pinned to USD prices, albeit by proxy through bitcoin. Automatically adjusting the price of items, even using an average, doesn't change the fact both you and the vendor run a high risk of taking a potentially huge opportunity cost.

mtraven 14y ago

If you're selling something illegal, for instance? https://en.wikipedia.org/wiki/Silk_Road_(marketplace) https://en.wikipedia.org/wiki/Silk_Road_(marketplace)

lukifer 14y ago

It's a young experiment, it'll take time to see what happens with it. Although according to WordPress, their primary motivation for accepting it as payment is to facilitate certain international transactions. (There are a few existing fiat currencies that make BTC look rock-solid by comparison.)

georgemcbay 14y ago
I don't really have any issue with services like WordPress (whose per-user support costs are likely negligible for most users) accepting Bitcoin. In those cases the PR is probably worth it regardless of the the price swings. My issue is more with physical goods. Lots of people seem to be looking forward to a future of buying physical goods with Bitcoin or bitcoin-alike currencies, which in some ways would be nice but I haven't seen a practical solution to the problem of potentially huge value swings. Nobody wants to sell a real physical good paid for with a stable currency to someone else in a currency that can lose half of its value or more in hours or even days.

waffenklang 14y ago

Because it offers the opportunity to trade without the shadow market of banks and financial regulators which get pennys of every damn good you buy without doing something important. the only problem is exchanging bitcoins which is the root of all evil for a non-backed per-trade-valued currency.

danielweber 14y ago
I can go right to my online bank and have them send a payment to anyone in the country, at zero charge.
- DougWebb 14y ago
  The charge is hidden. The US dollar, and every other national-bank-backed currency, is debt-based. For every dollar that's put into the economy by the national bank, a bit more than a dollar is owed to the bank. That makes it impossible to pay back the debt without inflating the currency, which reduces the value of the dollar (what it can buy) to less than the original dollar+debt amount. That's the short version of the explanation I've read about the "evils" of central banks and debt-based currencies. I'm no expert, so I can't really judge the accuracy of this explanation or whether or not it's evil.

ChuckMcM 14y ago

The only reason would be that any other currency has a higher personal risk of using. But given the trading activity I'm guessing one of the hoarders had decided to "actualize" their earnings. Or maybe they are raising cash to buy ASIC miners. Who really knows.

dexen 14y ago

If enough people did... the exchange rate would not matter very much ;-)

wmil 14y ago

Some countries forbid private currency exchanges (ie Venezuela) or face international sanctions (ie Iran). If you're middle class you may be worried about a government collapse, ending up as a refugee, hyperinflation, or government seizure. Bitcoin is a reasonable way to store wealth in those cases.