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But if you're using it as a currency how do you value it? Do you literally let people pay you 1 Bitcoin for $500 worth of merchandise? Also your telegraph anal
by fat0wl 13y ago
But if you're using it as a currency how do you value it? Do you literally let people pay you 1 Bitcoin for $500 worth of merchandise?
Also your telegraph analogy is something I've seen in several places and doesn't seem to mean anything. Plus I'm not really comparing Bitcoins to bank I'm more curious about the viability of a pump-and-dump system with a finite amount of units. If it's all based on speculation who is ever gonna spend the stuff?
The logical point I keep ending at is that you need a buyer. AS SOON as it starts to dip down, everyone will smell "crash" and then how do you sell them? The bubble bursts. From then on I think 1 of 2 things will happen.
1. The system will completely fail in marvelous ways as the parties with large stake in it writhe in agony.
2. The value will reach a resting point and become ultra-stable because people will cease to believe in speculation for infinite profit margins.
- psionski 13y agoThe merchants have their prices fixed in USD, when I pay Coinbase tells me how much Bitcoins I should send to transfer the equivalent of say $10 and then they directly convert it to the merchant's preferred currency and deposit it at their bank account. This insulates the merchants from the price swings completely, which is cool for now, but I don't think will be needed later. I'm aware of option 1), but I'm focusing on option 2), which is possible even if people don't stop speculating - the national currencies are pretty stable even though the exchange rates are only based on speculation. I believe this is just a question of volume and widespread adoption, which is happening for XBT with the recent large investments in many Bitcoin start-ups, so there's hope :)