^Again, if Bitcoin is officially supposed to be a currency alternative and not an investment, why does it's constantly spiraling value keep being touted as a proof of concept?
-40hz
Its increasing value is an illustration of confidence in it.
Please name another currency that has confidence within an order of magnitude like bitcoin.
Currency needs to maintain a fairly stable and predictable value in order to be a usable medium of exchange.
-40hz
That doesn't follow.
If by "fairly stable" you mean its purchasing power doesn't change, then no currency is "fairly stable". If you mean that the rate of change is slow, then no - bitcoin is not stable compared to other currencies.
Perhaps that would be better phrased as "volatility".
However, it predictably goes up.
The USD predictably goes down. As does the CAD, AUD, GBP, EUR, CNY, JPY, KRW, etc. etc. etc.
This is relevant:
https://en.wikipedia...wiki/Gresham%27s_lawBut none of that matters in the least. You're wrong about "in order to be a usable medium of exchange". The problem has been solved by BitPay. (** This is about frames of reference, but that gets icky.)
https://bitpay.com/So you can accept bitcoins, and have them instantly turned into fiat.
Here's a fun example with you and me as the main characters!
Say you are selling nice, super-sexy CentOS servers that you've tweaked out yourself for the paultry price of only USD $2,000.
Now, I on the other hand am but a mere customer. I drool over those wonderful machines you've built, and start saving up.
However, being a smart saver, and knowing that it will take me some time (say 4 months), I buy bitcoins.
Let's also assume that by the time I have the $2,000, your prices will likely go up about 5% or so ($2,100).
However, being somewhat forgetful and not very good with numbers, I spend $2,000 worth of fiat on bitcoins over that 4 months, and when I check the current value, my bitcoins are worth $3,200.
Now, I can either cash them out and purchase your server, or if you accept Bitpay, I can pay you the $2,100 for the server in bitcoins.
Bitpay processes the transaction and delivers either BTC or USD to you, the merchant. You choose what you want to "get out" of the transaction.
I then take the other $1,100 in bitcoins and throw a sexy-server party. (That means at a joint with topless waitresses!)
Otherwise it gets dumped whenever it drops and hoarded when it's rising.
-40hz
That doesn't follow. Bitpay has solved that problem.
Here's the quick summary of the above:
1) I take my fiat and dump it into BTC.
2) When I need to buy something, I use a merchant that uses Bitpay.
I end up ahead because by doing that (1) I have increased my purchasing power in the future.
It is then ALWAYS in my best interest to dump fiat into bitcoins in so far as I have access to merchants that use Bitpay (or a similar solution) and sell the products/services that I will need.
When the products/services I need/want aren't offered by a merchant that accepts bitcoins, then I need to balance the liquidity of immediate fiat cash on hand vs. the inconvenience of exchanging BTC for fiat.
There's also balancing for volatility, but it's not that hard.
e.g. If you put in $10 today, and next week it's worth $12, but when you get to the store to pay, it's only worth $11, what do you really have to complain about? You had X amount of purchasing power last week, and when you bought some product, you had 10% more purchasing power.
Think of it as putting food in the freezer. The food is preserved there for when you need it. Leave it out on the counter, and it will rot. Inflation is destructive like rot. It destroys your ability to save wealth for the future. I've just outlined how to preserve purchasing power similar to how you'd freeze food.
So, have I convinced you any yet?
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(kidding!)
-40hz (October 22, 2013, 09:03 PM)
