3 ms·

> In the long run, bitcoin will stabilize, Why would this be true? Gold and silver have been around a long time, but both are still relatively volatile. I mea

> In the long run, bitcoin will stabilize, Why would this be true? Gold and silver have been around a long time, but both are still relatively volatile. I mean, I hope you're right, I'm just curious where you think volatility ends up and why you think so.

dragontamer 13y ago
The volatility of Gold and Silver is approximately 20% / year. There was a MASSIVE Gold sell off earlier this year, which caused a temporary spike of Gold Volatility to 60%. In comparison, the volatility of BTC is approximately 6000% / year. The magnitude of volatility is straight up ridiculous. The behavior of BTC is more like a penny-stock than any commodity on the market
jquery 13y ago
> Gold and silver have been around a long time, but both are still relatively volatile. Are gold and silver not less volatile than government-issued currencies, the long-term value of which has traditionally ended at $0?
- dragonwriter 13y ago
  > Are gold and silver not less volatile than government-issued currencies Which government issued currencies? Government issued currencies are not all alike. > the long-term value of which has traditionally ended at $0? Fiat currencies only end if the issuing entity ceases to exist or abandons them, and even so the market value of currency issued may not become zero, so the claim about ending value is suspect. More importantly, though, volatility isn't even related to ending value, so this claim would be a complete non-sequitur even if it was true.
  - brownbat 13y ago
    >> the long-term value of which has traditionally ended at $0 > More importantly, though, volatility isn't even related to ending value Yeah, come heat death of the universe, ending value of all currencies will look pretty similar.
  - jwallaceparker 13y ago
    > Fiat currencies only end if the issuing entity ceases to exist or abandons them I'm curious - can you point to one example of this happening? To my knowledge they've all gone to zero in a hyperinflation but I'd love to know of a counterexample.
    - dragonwriter 13y ago
      > > Fiat currencies only end if the issuing entity ceases to exist or abandons them > I'm curious - can you point to one example of this happening? Obvious, clear, and fairly recent examples include all of the European currencies that were retired in favor of the Euro. > To my knowledge they've all gone to zero in a hyperinflation but I'd love to know of a counterexample. A number have been abandoned (and often replaced by a new currency with the same name) by the issuing state in the face of inflation (often not even at the level typically labelled "hyperinflation"), but the nature of the "fiat" in "fiat currency" essentially assures some minimal residual value as log as the issuing state remains functional as a state and does not abandon the currency. E.g., the pre-1993 Mexican Peso was withdrawn and replaced by the New Peso after a long period of double-digit annual inflation, but it neither "went to zero" (prior to being withdrawn) nor suffered hyperinflation (monthly inflation >50%.)
marcell 13y ago
Bitcoin volatility is the result of thin order books. Look at http://bitcoinity.org/markets/bitstamp/USD http://bitcoinity.org/markets/bitstamp/USD: you can move the market by 10%+ with "just" a few million dollars. You can't move the market for Euros or Yen with that much money. In a bitcoin success scenario, this will change once bitcoin is no longer the sole domain of currency speculators, but starts seeing actual commerce. Some places where this could start: 1) International remittance. Wire transfers are slow and expensive. Bitcoin could make moving money internationall much easier. See, for example, YC-backed "Buttercoin": http://techcrunch.com/2013/08/20/buttercoin/ http://techcrunch.com/2013/08/20/buttercoin/ 2) Merchant adoption. Credit card fees for online commerce are in the 2-3% + $.35 range. Bitpay currently offers 0% fees, instead charging a flat $30/month: https://bitpay.com/pricing https://bitpay.com/pricing 3) Micropayments: The "+ $.35" part of credit card fees precludes micropayments. Bitcoin could be used for things like pay-per-minute streaming. Once these types of things start adding volume and depth to the exchanges, it will be harder to move the market, and that will add stability. Obviously, this will take a few years.
nardi 13y ago
Volatile by what measurement? Hopefully you don't mean volatile with regard to the exchange rate with fiat currencies. Because that says more about the currencies than it does about gold and silver.

dragontamer 13y ago

The volatility of Gold and Silver is approximately 20% / year. There was a MASSIVE Gold sell off earlier this year, which caused a temporary spike of Gold Volatility to 60%. In comparison, the volatility of BTC is approximately 6000% / year. The magnitude of volatility is straight up ridiculous. The behavior of BTC is more like a penny-stock than any commodity on the market

jquery 13y ago

> Gold and silver have been around a long time, but both are still relatively volatile. Are gold and silver not less volatile than government-issued currencies, the long-term value of which has traditionally ended at $0?

dragonwriter 13y ago
> Are gold and silver not less volatile than government-issued currencies Which government issued currencies? Government issued currencies are not all alike. > the long-term value of which has traditionally ended at $0? Fiat currencies only end if the issuing entity ceases to exist or abandons them, and even so the market value of currency issued may not become zero, so the claim about ending value is suspect. More importantly, though, volatility isn't even related to ending value, so this claim would be a complete non-sequitur even if it was true.
- brownbat 13y ago
  >> the long-term value of which has traditionally ended at $0 > More importantly, though, volatility isn't even related to ending value Yeah, come heat death of the universe, ending value of all currencies will look pretty similar.
- jwallaceparker 13y ago
  > Fiat currencies only end if the issuing entity ceases to exist or abandons them I'm curious - can you point to one example of this happening? To my knowledge they've all gone to zero in a hyperinflation but I'd love to know of a counterexample.
  - dragonwriter 13y ago
    > > Fiat currencies only end if the issuing entity ceases to exist or abandons them > I'm curious - can you point to one example of this happening? Obvious, clear, and fairly recent examples include all of the European currencies that were retired in favor of the Euro. > To my knowledge they've all gone to zero in a hyperinflation but I'd love to know of a counterexample. A number have been abandoned (and often replaced by a new currency with the same name) by the issuing state in the face of inflation (often not even at the level typically labelled "hyperinflation"), but the nature of the "fiat" in "fiat currency" essentially assures some minimal residual value as log as the issuing state remains functional as a state and does not abandon the currency. E.g., the pre-1993 Mexican Peso was withdrawn and replaced by the New Peso after a long period of double-digit annual inflation, but it neither "went to zero" (prior to being withdrawn) nor suffered hyperinflation (monthly inflation >50%.)

marcell 13y ago

Bitcoin volatility is the result of thin order books. Look at http://bitcoinity.org/markets/bitstamp/USD http://bitcoinity.org/markets/bitstamp/USD: you can move the market by 10%+ with "just" a few million dollars. You can't move the market for Euros or Yen with that much money. In a bitcoin success scenario, this will change once bitcoin is no longer the sole domain of currency speculators, but starts seeing actual commerce. Some places where this could start: 1) International remittance. Wire transfers are slow and expensive. Bitcoin could make moving money internationall much easier. See, for example, YC-backed "Buttercoin": http://techcrunch.com/2013/08/20/buttercoin/ http://techcrunch.com/2013/08/20/buttercoin/ 2) Merchant adoption. Credit card fees for online commerce are in the 2-3% + $.35 range. Bitpay currently offers 0% fees, instead charging a flat $30/month: https://bitpay.com/pricing https://bitpay.com/pricing 3) Micropayments: The "+ $.35" part of credit card fees precludes micropayments. Bitcoin could be used for things like pay-per-minute streaming. Once these types of things start adding volume and depth to the exchanges, it will be harder to move the market, and that will add stability. Obviously, this will take a few years.

nardi 13y ago

Volatile by what measurement? Hopefully you don't mean volatile with regard to the exchange rate with fiat currencies. Because that says more about the currencies than it does about gold and silver.