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Thread: WHY ARE STABLE COINS IMPORTANT TO BITCOIN?

  1. #1

    WHY ARE STABLE COINS IMPORTANT TO BITCOIN?

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    I would make the counter- argument. That Bitcoin needs instability. Why? If bitcoin was stable relative to the dollar, the speculators trying to make money off buying bitcoin would disappear. That is currently the vast majority of bitcoin holders. If it is constantly say $1000 to a bitcoin, they can't make any money trading dollars for bitcoin and back again. The profit margin is zero. And that is before considering transaction costs. Then there are the users- those who use bitcoin to make actual purchases. If bitcoin and the dollar keep the same relative purchasing power, why would I go through trading dollars for bitcoin to make a purchase when I can use the currency I already have and avoid the extra step? Since their relative value is the same, there is no benefit.

    It is true that more stable bitcoin price could make people start using it more in transactions but again, it would have to offer the user a benefit to be worth changing from dollars to bitcoin to make any purchases. People like what is easiest. Why buy a foreign currency to make purchases in the US with that foreign currency simply because you can? Same applies to a stable bitcoin.
    Last edited by Zippyjuan; 09-17-2018 at 11:58 AM.
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  4. #3
    "It is true that more stable bitcoin price could make people start using it more in transactions but again, it would have to offer the user a benefit to be worth changing from dollars to bitcoin to make any purchases"

    Yes depends on your vision of bitcoin.
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