Post
Topic
Board Beginners & Help
Re: BTC Price Stability
by
faustianover
on 05/09/2011, 04:28:39 UTC
Bitcoins price relative to another currency cannot be disregarded that easily.
Let's say I create widgets. I have to buy the raw materials to make widgets. These materials are not sold by vendors who take BTC. I have to pay the local currency for my parts. Let's say they cost 440 Baht to make apiece.  at the time, 1 Bitcoin is worth 300 Baht. I factor in my time and overhead, and sell widgets for 2.5 BTC.  Then Bitcoin's value drops to 270  baht- Roughly a change of 1 USD, at the end of the week. I turn to exchange my BTC for Baht to pay bills, buy more parts- and my profits may have disappeared. How am I supposed to make money, or even guarantee that I can break even, with a volatile currency?

The buyers is just as at risk. If i buy a widget for 2.5 BTC, that means I value a finished widget at 750 Baht. Before my widget arrives, BTC increases to 330 baht. Great for the seller, but this means my widget effectively cost me 825 Baht- When if i had dealt with another widget seller, the price would have been 755 Baht.  Why would I want to spend BTC that may end up costing me more then I want to spend?