On the Potential Adoption and Price Appreciation of Bitcoin in the Long Run « cs702

interesting perspective on btc

I’ve copied the following from the article that appeared at SmartMoney.com, which mentions the sock merchant: “Forster began charging 75 Bitcoins for each pair in February and has since had to lower the price to 5 due to extreme appreciation in the currency’s value. ‘I wish I had kept all of them’ says Forster, who traded his Bitcoins on the way up for cash and web services.” This short excerpt illustrates two problems with bitcoins that present what I think are serious headwinds to their possible adoption as a legitimate currency. These problems have nothing to do with the fundamental design or implementation of bitcoins, rather the lack of any sense of stability that exists in the exchange markets. The sock vendor runs the business in dollars, which forces bitcoin transactions through a currency converter. This conversion is in such a dynamic state that the bitcoin price...

Full article: http://cs702.wordpress.com/2011/05/29/on-the-potential-ad...