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It's in a strange position right now, though. Its value is not based on anything that makes any sense. Public perception - yes - but public perception of what?
by fragsworth 13y ago
It's in a strange position right now, though. Its value is not based on anything that makes any sense. Public perception - yes - but public perception of what? Nothing is priced in bitcoin.
Once things begin to be priced in bitcoin, proponents hope its value will stabilize. This might happen. It did with fiat, but fiat had the advantage of a stable start and slow detachment from gold.
The real funny thing to me is, I believe the currency could do its job just as well no matter what the value per bitcoin. And I don't think volatility matters at all, because companies like BitPay assume the volatility risk for you (both the merchant and the consumer)
I don't know that bitcoin can be used as a store of value, especially for future adopters. But it is definitely a great method for real transactions of wealth.
- dasil003 13y ago> I don't know that bitcoin can be used as a store of value, especially for future adopters. All else being equal, it seems to be designed to be a perfect store of value because it is deflationary by design. Obviously it is far more volatile and risky than something backed by major world governments at this stage, however it does come with certain guarantees that no central bank could credibly make (if the crypto holds). For people who have had their wealth stolen by governments this could prove a very attractive pull.