Re: High volatility and sudden crashes will kill bitcoin, unless...
I agree that the profit margins of these merchants are pretty high on their own but I still see no logic in that. If they wanted to multiply their sales, they could just go for a sell-out and get done with that. Why all the fuss with Bitcoin?
Because they have the additional advantage to promote themselves as "Bitcoin backers". They expand their public into the Bitcoin community. I am pretty sure that every merchant who participates in this mechanism would get much love in the Bitcoin community, above all from newbies that get burnt in crashes
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Anyway, if you think that it might work out, why no one has done that already?
Well, somebody must be the first. Maybe now someone tries it
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Further, I don't see a lot of sense in buying 20 copies of the same record just to escape being "caught by volatility"
The mechanism only can show its full potential when there is a diversity of goods available (many merchants participating). A single merchant/producer would not change much in Bitcoin's volatility. But even if there are only a few goods available, individual users will be able to benefit from it, as they could buy something they like and so cut a part of their losses in the case of a crash.