[thegjp210]

how much counterparty risk does the rapid price fluctuation result in? Can't imagine pricing a contract in bitcoin, as someone's getting screwed at payment if the BTC/fiat rate has changed during the lifetime of the contract

[Andrew_nenakhov]

We just accepted the price of bitcoin in USD at the time the client bought BTC, and I accepted the risks of fluctuating price to myself. I actually gained somewhat, though, way less than if I'd just hold those coins till today. :)

[cambalache]

You can peg the contract in USD (or better put, the original price was in USD) and just accept the bitcoins within a very small window, say 30 min/1h.

[TheCoelacanth]

Don't you have a similar problem with Russian currency? From Jun 2014 to Jan 2015, it lost more than half of it's value relative to USD.

[Andrew_nenakhov]

In the past 110 years Russian currency depreciated against USD at a something like trillion times.

It's a safe bet that it'll continue the trend (with some occasional and not too long lapses of stae slowish decline), and actually bitcoin is a rather safe bet against rouble. After all, it's not backed by Putin's government!

[arcticbull]

This is an utterly ridiculous statement. Not only is the trillion fold devaluation not at all a reasonable assessment of the situation, the exchange rate only matters at the time of the exchange, not after. That's the point.

[Andrew_nenakhov]

I was answering to a person who said that RUB lost half of its value against USD in a span of a year. I just pointed that it is a part of a general trend, what do you find ridiculous about that?

Btw, 'a trillion times' is an understatement. Exact figure in 2014 was... 57 460 000 000 000 000 (fifty seven quadrillion four hundred and sixty trillion) times [1], and just add some more since that time. Still thinking that bitcoin is a risky currency, huh?

[1]: https://zhartun.me/2014/12/usd.html

[arcticbull]

Yes of course it's the risky investment. BTC has seen 3 drawdowns of -86% in the last couple of years, and also, what happened to XRP shows that the football can be deflated in seconds with the right SEC memo.

Currency isn't an investment. Currency has never been an investment. You're not supposed to hold currency. You're supposed to use currency to buy assets. A spot exchange rate means absolutely nothing. This is ECON-101.

[Andrew_nenakhov]

Is gold an asset or a currency? Now it is definitely the former, but throughout history it was mostly an asset and a currency, with rather vague lines between them.

Bitcoin is not a USD replacement. It's more of a gold replacement: finite supply, great malleability, but with modern benefits regarding storage and transfer.

[candiodari]

every currency transaction creates this risk. Nothing to do with Bitcoin. I suppose you could say that this is a problem Bitcoin doesn't fix ... but judging by the Bitcoin market cap, it's not as much as a problem as normal banks.

[rualca]

> every currency transaction creates this risk.

This is a disingenuous straw man and a desperate attempt to brush away Bitcoin's failure as currency. The OP explicitly referred to cryptocurrencies' inherent high volatility, and volatility is not a mere transaction risk. Seeing your debt explode, because you either borrowed or deferred payments, due to cryotocurrency volatility is not a transaction risk. It's simply the fact that cryptocurrency fails as being money.