6 ms·

> It may fail as "money" (in a narrow sense) and still succeed as a global platform. I think that was the author's point. For example, Paypal, Amazon or the I

> It may fail as "money" (in a narrow sense) and still succeed as a global platform. I think that was the author's point. For example, Paypal, Amazon or the IRS could announce tomorrow they will accept payment in Bitcoins but peg their BTC/USD exchange rate to one. Speculation would all but stop and Bitcoins would become a transaction platform.

indrax 13y ago
Can I get my tax return in BTC at 1:1 please? please?
mtkd 13y ago
But we're seeing a layer appear with companies like Bitpay that solves the volatile exchange rate issue.
mindstab 13y ago
No, because no one would give them bitcoins at 1:1 and they can't magic up their own, they 'd have to buy them at market price and then sell them at a hilarious loss.
- stevewilhelm 13y ago
  eBay, Amazon, and IRS don't need Bitcoins, they can set any exchange rate they want. If enough goods and service providers followed suit, current speculators would have to take a hilarious loss to buy anything.
  - mindstab 13y ago
    they can sure set them, and then no one would use them. do you not understand money? what are you, the owner of 100btc going to do: a) buy $100usd worth of goods at ebay directly b) cash out at a proper exchange for $100,000usd, then buy $100usb worth of goods on ebay and have $99,900usd left over? or cash out ONE btc for $1000usd, buy $100usd of goods and have $900 usd left over AND 99btc? How do you expect any even remotely rational players do participate in this farce?
    - stevewilhelm 13y ago
      In any financial exchange, both parties, the buyer and seller, need to come to agreement on a price. Given the fact that current BTC to USD exchange volume is fairly small, it wouldn't take that many large global goods and service providers pegging their BTC/USD exchange rate to cause the speculation market to collapse. Those that recently bought their Bitcoins at $900 would sell below the current high price to realize their gain and avoid a potential loss, then those who bought at $800 would follow suit, and so on. In very short order, Bitcoins could be trading in single digits.
      - M4v3R 13y ago
        They couldn't. If you pegged the price to one, there wouldn't be enough units for everyone to buy anything they want. Remember that there are only 12 million of them, and only ~20 million will be ever available. Tying their value to one would mean that the size of whole economy would be only 20 million USD, which is pocket money on a global scale.
      - mindstab 13y ago
        what gain? you are proposing taking for example a $100usb product and selling it for 100btc... which at current market value is the equivalent of over pricing it to $100,000usd. Who would buy that when they could pay $100usd for it instead or convert 1btc and functionally pay 0.1btc for it instead of 100btc. What global goods providers would mark up their wares 1000x and who in their right mind would spend anything on that. Sure, if BTC was worth > $1usd and you were selling them at 1:1 everyone would leap to do that because now they are GAINING by spending their BTC with you. But your proposal means they loose 1000%. I don't understand what motivates this switch over.
      - deleted 13y ago
        [deleted]
      - dwaltrip 13y ago
        The buyers and sellers have come to an agreement already. They prefer the price of $1000. Any large retailer attempting to manufacture an artificial peg would only create a good amount of temporary humor.
- SilasX 13y ago
  They can't magic up their own, but they can issue bitcoin-substitutes, in the same way that banks issue dollar-substitutes in the form of USD credits on your account, redeemable for 1 USD worth of debt owed to the bank. It's an open question whether such substitutes will trade on par with the real "in-blockchain" thing. Personally, I doubt it.
cryowaffle 13y ago
This makes no sense. If, say the IRS, pegged the exchange at 1 what difference does that make? There are not infinite bitcoins and the IRS certainly wouldn't have all of them. People VALUE bitcoins which is why they pay a lot of USD for them.
- stevewilhelm 13y ago
  People value goods and services. They use currency to denote the value of these goods and services. If enough goods and service providers pegged their BTC/USD exchange rate to one, the initial BTC speculators would take a bath. But subsequent Bitcoin users would receive the benefit of Bitcoin transaction technology and the benefit of the US government's fiat currency for monetary policy.
  - GhotiFish 13y ago
    In a sense, it's true that the value of a currency is how much you can get for it. The problem is that you can't just peg it at a value, bitcoins supply is limited. Imagine if every goods and service provider pegged their unit product at $1,000,000USD. The VALUE of the US dollar would drop immensely. What force could actually make them do that though? Because no one's going to pay a million bucks for a big mac, unless they have 4 billion in the bank at least. Something that can't happen to bitcoin.
bitcoin-truth 13y ago
I tried doing this on MtGox with a buy limit price of 1$. I didn't get any bitcoin :( I do have a friend with 900btc though: I told him I was in the market for a dollar, and he just gave it to me, no questions asked. I wonder where he got it from?

indrax 13y ago

Can I get my tax return in BTC at 1:1 please? please?

mtkd 13y ago

But we're seeing a layer appear with companies like Bitpay that solves the volatile exchange rate issue.

mindstab 13y ago

No, because no one would give them bitcoins at 1:1 and they can't magic up their own, they 'd have to buy them at market price and then sell them at a hilarious loss.

stevewilhelm 13y ago
eBay, Amazon, and IRS don't need Bitcoins, they can set any exchange rate they want. If enough goods and service providers followed suit, current speculators would have to take a hilarious loss to buy anything.
- mindstab 13y ago
  they can sure set them, and then no one would use them. do you not understand money? what are you, the owner of 100btc going to do: a) buy $100usd worth of goods at ebay directly b) cash out at a proper exchange for $100,000usd, then buy $100usb worth of goods on ebay and have $99,900usd left over? or cash out ONE btc for $1000usd, buy $100usd of goods and have $900 usd left over AND 99btc? How do you expect any even remotely rational players do participate in this farce?
  - stevewilhelm 13y ago
    In any financial exchange, both parties, the buyer and seller, need to come to agreement on a price. Given the fact that current BTC to USD exchange volume is fairly small, it wouldn't take that many large global goods and service providers pegging their BTC/USD exchange rate to cause the speculation market to collapse. Those that recently bought their Bitcoins at $900 would sell below the current high price to realize their gain and avoid a potential loss, then those who bought at $800 would follow suit, and so on. In very short order, Bitcoins could be trading in single digits.
    - M4v3R 13y ago
      They couldn't. If you pegged the price to one, there wouldn't be enough units for everyone to buy anything they want. Remember that there are only 12 million of them, and only ~20 million will be ever available. Tying their value to one would mean that the size of whole economy would be only 20 million USD, which is pocket money on a global scale.
    - mindstab 13y ago
      what gain? you are proposing taking for example a $100usb product and selling it for 100btc... which at current market value is the equivalent of over pricing it to $100,000usd. Who would buy that when they could pay $100usd for it instead or convert 1btc and functionally pay 0.1btc for it instead of 100btc. What global goods providers would mark up their wares 1000x and who in their right mind would spend anything on that. Sure, if BTC was worth > $1usd and you were selling them at 1:1 everyone would leap to do that because now they are GAINING by spending their BTC with you. But your proposal means they loose 1000%. I don't understand what motivates this switch over.
    - deleted 13y ago
      [deleted]
    - dwaltrip 13y ago
      The buyers and sellers have come to an agreement already. They prefer the price of $1000. Any large retailer attempting to manufacture an artificial peg would only create a good amount of temporary humor.
SilasX 13y ago
They can't magic up their own, but they can issue bitcoin-substitutes, in the same way that banks issue dollar-substitutes in the form of USD credits on your account, redeemable for 1 USD worth of debt owed to the bank. It's an open question whether such substitutes will trade on par with the real "in-blockchain" thing. Personally, I doubt it.

cryowaffle 13y ago

This makes no sense. If, say the IRS, pegged the exchange at 1 what difference does that make? There are not infinite bitcoins and the IRS certainly wouldn't have all of them. People VALUE bitcoins which is why they pay a lot of USD for them.

stevewilhelm 13y ago
People value goods and services. They use currency to denote the value of these goods and services. If enough goods and service providers pegged their BTC/USD exchange rate to one, the initial BTC speculators would take a bath. But subsequent Bitcoin users would receive the benefit of Bitcoin transaction technology and the benefit of the US government's fiat currency for monetary policy.
- GhotiFish 13y ago
  In a sense, it's true that the value of a currency is how much you can get for it. The problem is that you can't just peg it at a value, bitcoins supply is limited. Imagine if every goods and service provider pegged their unit product at $1,000,000USD. The VALUE of the US dollar would drop immensely. What force could actually make them do that though? Because no one's going to pay a million bucks for a big mac, unless they have 4 billion in the bank at least. Something that can't happen to bitcoin.

bitcoin-truth 13y ago

I tried doing this on MtGox with a buy limit price of 1$. I didn't get any bitcoin :( I do have a friend with 900btc though: I told him I was in the market for a dollar, and he just gave it to me, no questions asked. I wonder where he got it from?