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Price stability is one major factor. Unstable currency is bad for both consumers and merchants. When the volatility is high, it is high risk for people that h
by Johnie 13y ago
Price stability is one major factor.
Unstable currency is bad for both consumers and merchants. When the volatility is high, it is high risk for people that hold that currency. Consumers and merchants are not interested in hedging their currency risk and rather focus on using the currency.
Let's say that the value of USD fluctuates 10% per day, most people would not hold USD; they would rather hold a currency that is stable or move to gold. Same thing is happening with BTC.
- erikpukinskis 13y agoBitcoin will only be unstable as long as there is disagreement about the economics of it. Once we get reasonably close to consensus about that, price will stabilize to where the consensus model says it should be. I suspect that won't happen until some time after the current crop of incoming economics PhDs are tenured.