You can't have a small stable currency (at least not without a central bank*).
Is there anything that could be done about this? I know what I'm about to say is impossible, but... if we could make a currency in which one denomination was worth some set amount of value, and no matter what the currency's market cap was, that denomination always had the exact same value or slightly more over time, it would imho be the ideal currency. I know that can't happen exaclty but is there any way an approximation of this could be possible during a rapidly changing market cap? Could Bitcoin's mining difficulty be used somehow to intelligently control the supply to reduce volatility?
Also, jdbtracker, I don't really understand what you're saying. Could you please re-explain your last post, because I can't understand what you're trying to say.
Bitcoins price was supposed to be set to scale according to transaction volume, the banks would have set a specific price to accomodate all denominations of currencies world wide. It would have been stable.
but now... to stabilize it people need to begin using it as a service to move funds from point A to B on the earth or from one Currency to another and get that money into a stable bank account ASAP! this has to be done on the short term, until someone figures the problem out with a less work intensive solution or the market cap gets large enough to be stable.
that stability will create the conditions necessary to have Bitcoin as a stable currency, but we are a long way away, ... it will be a rough road, there is no going around that, just not enough miners to carry out the volume of transactions, not enough interest to allow it to become what it was intended to be by the people.
What the Bitcoin community has built is light years ahead of what it originally was meant to be, now we just wait to see if all the improvements that allow it to function in the free markets are solid, the speculator problem was quite a doozy, it seriously hurt the Bitcoin community.