Right, so please tell me if im missing something blatantly obvious. But with the volatility of BTC being such that it changes on the hour, for vendors to start to accept it as a legitimate currency wouldnt their prices have to be dependent on current the exchange rate?
For example.
I want to buy a pair of trainers that typically cost $80 USD, back in July I could have purchased this with 1BTC. So lets say today that same vendor has them marked at 1BTC or $80 USD, if I paid by BTC my trainers now cost over $800!
So with people wanting to accept BTC how do you envisage pricing so that it is realistic based on fiat (via a conversation based on current price)?
Unless im missing something, without a rate determined straight away I cant see how mass adoption can be viable?
Or what am I missing?
The problem with this analysis is that ignores that fiat currencies, in particular USD, are inflationary. What $1000.00 was worth in 1920 is not what it is today. The advantage of Bitcoin is that it is capped @ 21 million bitcoins. The Fed, on the other hand, keeps flooding the economy with more dollars, which dilutes the purchasing power of your dollar everyday.
Think of it this way.
If there are only $1000.00 USD in circulation, and you had $100.00 all to yourself, you would be a very rich man. If you only had $100.00, but there are 1 trillion dollars in circulation, your $100.00 is worth a lot less. It has been diluted.
Bitcoin is the opposite.