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I guess what I'm trying to say is that if merchants selling products for Bitcoin simply peg its worth to USD (like most merchants today to) then nobody can ever
by acabal 14y ago
I guess what I'm trying to say is that if merchants selling products for Bitcoin simply peg its worth to USD (like most merchants today to) then nobody can ever be sure how much you can actually buy with 1BTC.
Bitcoin is unstable in part because this habit of using it as a USD proxy creates uncertainty as to the medium's real worth. This in turn encourages speculation which perpetuates the vicious cycle of volatility.
- tptacek 14y agoMerchants today don't peg BTC to USD. The value of BTC in USD floats.
- acabal 14y agoSure they do, look at Coinbase. You can (for example) buy Reddit Gold for $3.99 USD, or the equivalent in Bitcoin, which changes based on some USD-based exchange rate they figure out. Or look at Namecheap, which can refill your account in Bitcoin--but you enter a USD amount before they tell you how much the Bitcoin cost will be. Maybe they don't look at MtGox every day but most merchants without a doubt peg their Bitcoin amounts to some USD exchange rate.
- tptacek 14y agoThe exchange rate on services like Bitpay are a smoothed-out version of the current spot price. Nobody will fix a USD/BTC rate for even a day. In dollar-denominated terms, the price of items for sale in BTC floats throughout the day. I think we're just using the word in two different ways.