Quote from: P4man on October 22, 2011, 02:44:13 PM

Quote from: cypherdoc on October 22, 2011, 02:38:43 PM

i submit that any merchant who believes in Bitcoin, especially if he has speculative juices in him, accept Bitcoin in payment hand over fist to accumulate as many as possible now w/o expending USD's before the true equilibrium value of Bitcoin is achieved, which IMO is WAY higher than what it is today. thats my opinion.

Spoken like a true gambler. A merchant has to pay for his stuff in $/EURO/Yen whatever. Gambling on the rise of "foreign" currencies is not what a merchant does, its what a speculator does. A merchant will want to protect himself from currency swings through hedging, even for swings as minor as what have between dollar and euro's etc. The volatility of bitcoin makes that a complete joke.

Agreed. One cannot expect all merchants to also be speculators/gamblers. This is very much like expecting all miners to mine solo. Some merchants will only use Bitcoin if they are able to enjoy its benefits without taking on the risks.

However, speculators and traders colluding to create an artifical stable Bitcoin price is not a solution; this would be akin to building a house upon sand. Instead, Bitcoin has to go through this phase of wild speculation where some win big and others lose big. This will kill off the day traders who don't know what they are doing and leave those that profit and create drag on the price. This process will take a long time but it is an essential step toward a healthy kind of stability. I believe it is unlikely that a level of stability that is acceptable to most merchants can be reached in the next 10 years and so I expect a series of competing companies offering options to merchants (basically taking the sting of market volatility out of the equation for a fee) will arise.

Of course, this all assumes that Bitcoin manages to dodge various devastating scenarios such as being hacked past the point of recovery or being declared illegal to trade in most countries.