My stance on this topic is: We should seek ways to reduce volatility, but we won't completely erradicate it because of Bitcoin's inherent inflexibility to demand fluctuations.

I partly disagree. Bitcoin holders have many possibilities to intervene in Bitcoin's price (see below). However, the deterministic supply scheme that governs Bitcoin since Satoshi installed it makes impossible a real "peg" to a currency or commodity, because it would never work to totally equilibrate the (real) demand fluctuations.

But what can be done is to try to limit "irrational" volatility. That is, basically, panic selling and FOMO buying. Here I have often proposed a system where merchants that sell goods and services for Bitcoin could opt to back the Bitcoin price for a day or a couple of days. This would be a win-win system because if their clients can get a discount, the merchants' sales would increase - in a crash, their losses would be outweighed very probably by a drastic sales increase so they benefit especially if they sell goods with low marginal costs.

But as long as most of the Bitcoin users are in as "investors" and want to ride a bullish wave, then "use as a currency" will be marginal and such ideas will have low support (I agree with @pooya87 here).


Here you're contradicting yourself a bit: If Bitcoin is only useful for "instant transactions" and volatility should be "normal", why should merchants then accept it without fiat gateways? Who would hold the bag? That only makes sense for merchants if there is a kind of "volatility-reducing" plan behind it, like I outlined one above.