Comment Growing Pains (Score 1) 692
It's disappointing to see articles like this, because it doesn't separate out two completely disjoint concepts: where Bitcoin is, versus where Bitcoin going. Bitcoin has the potential to behave very much like a stable currency system, and at a certain threshold it will. But that threshold is very high. Probably at the $2,000/BTC range (which corresponds to about $25 billion market cap). Once it reaches that level through legitimate growth, then the depth of market exists to absorb all this insanity. Right now, any gambler with a million dollars can swing the market around (and manipulate it) because even the biggest exchange (Mt. Gox) doesn't have enough volume to swallow those gamblers into the noise.
So what Forbes should've said was "it's too volatile, right now, to be used as a stable currency/barter system." For individuals and businesses to actually hold BTC for more than a few days, the volatility has to come down. But he missed the point that depth of market solves that problem. So there is a bit of a chicken&egg problem here, but it's one I think Bitcoin will overcome -- it's virtues are still highly-valued, and lots of people still take on that volatility risk to help grow the system and benefit themselves (such as merchants enjoying the absence of chargeback possibility).
So what Forbes should've said was "it's too volatile, right now, to be used as a stable currency/barter system." For individuals and businesses to actually hold BTC for more than a few days, the volatility has to come down. But he missed the point that depth of market solves that problem. So there is a bit of a chicken&egg problem here, but it's one I think Bitcoin will overcome -- it's virtues are still highly-valued, and lots of people still take on that volatility risk to help grow the system and benefit themselves (such as merchants enjoying the absence of chargeback possibility).