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Take a look at the price change of the 10 largest crypto currencies in the last 24 hours. Some decrease, some grow, but the movements are moderate enough.
Bitcoin’s volatility is the main obstacle to universal recognition
There are several serious obstacles that prevent Bitcoin from turning into a universal currency. However, some of them are already beginning to disappear. For example, transaction fees in the Bitcoin network reached an unreasonably high level of $ 25 in December. Since then, they have declined significantly and currently correspond to commissions in other payment systems. There are also several promising solutions to the problem of scalability and transaction time-for example, the wider deployment of Segregated Witness (SegWit). Of course, these are steps in the right direction. But before Bitcoin turns into a world currency for payment of goods and services or becomes a universal carrier of value, like gold, its volatility should subside.
The problem of volatility concerns both sides
Consider it from the point of view of a consumer. Let's say you traveled around Asia last summer. Instead of exchanging currency on the spot or choosing credit cards (they are not accepted everywhere), you decide to convert the whole budget for a trip (say $ 5000) into Bitcoins. With the current volatility at the time of travel, the initial $ 5,000 can turn into both $ 20,000 and $ 1,000. Both scenarios are probable, but the second case literally deprives you of money. Now think about the sellers. Continuous transactions, coupled with high volatility, create uncertainty, which few people like. According to blockchain.info, confirmation of a transaction in the Bitcoin network takes about an hour on average. During periods of increased activity, delays increase to a day or more. By the time bitcoins arrive at the seller's account, their cost can change a lot.
Permissible level of volatility
What is the maximum level of volatility acceptable to most people? Over the past 24 hours, the euro, yen and pound exchange rates against the dollar have changed by 0.07%, 0.29% and 0.93%, respectively. Daytime traffic of 1-2% is a common occurrence, but daily fluctuations typical for Bitcoin of 10% or more are extremely rare on the traditional currency market. The bottom line is that Bitcoin can gradually become more expensive or cheaper with time, and this in no way hinders its widespread use. Now the main obstacle is wild fluctuations in prices for short periods of time. The same can be said about other crypto-currencies. If there is more quiet days, such as past Tuesday and Wednesday, formation of a crypto currency as a universal means of payment will go faster. On the other hand, the days when Bitcoin is growing or falling by 10% or more (and recently there have been a lot of them) will only deter potential users of digital currencies.
source: fool.com
Bitcoin’s volatility is the main obstacle to universal recognition
There are several serious obstacles that prevent Bitcoin from turning into a universal currency. However, some of them are already beginning to disappear. For example, transaction fees in the Bitcoin network reached an unreasonably high level of $ 25 in December. Since then, they have declined significantly and currently correspond to commissions in other payment systems. There are also several promising solutions to the problem of scalability and transaction time-for example, the wider deployment of Segregated Witness (SegWit). Of course, these are steps in the right direction. But before Bitcoin turns into a world currency for payment of goods and services or becomes a universal carrier of value, like gold, its volatility should subside.
The problem of volatility concerns both sides
Consider it from the point of view of a consumer. Let's say you traveled around Asia last summer. Instead of exchanging currency on the spot or choosing credit cards (they are not accepted everywhere), you decide to convert the whole budget for a trip (say $ 5000) into Bitcoins. With the current volatility at the time of travel, the initial $ 5,000 can turn into both $ 20,000 and $ 1,000. Both scenarios are probable, but the second case literally deprives you of money. Now think about the sellers. Continuous transactions, coupled with high volatility, create uncertainty, which few people like. According to blockchain.info, confirmation of a transaction in the Bitcoin network takes about an hour on average. During periods of increased activity, delays increase to a day or more. By the time bitcoins arrive at the seller's account, their cost can change a lot.
Permissible level of volatility
What is the maximum level of volatility acceptable to most people? Over the past 24 hours, the euro, yen and pound exchange rates against the dollar have changed by 0.07%, 0.29% and 0.93%, respectively. Daytime traffic of 1-2% is a common occurrence, but daily fluctuations typical for Bitcoin of 10% or more are extremely rare on the traditional currency market. The bottom line is that Bitcoin can gradually become more expensive or cheaper with time, and this in no way hinders its widespread use. Now the main obstacle is wild fluctuations in prices for short periods of time. The same can be said about other crypto-currencies. If there is more quiet days, such as past Tuesday and Wednesday, formation of a crypto currency as a universal means of payment will go faster. On the other hand, the days when Bitcoin is growing or falling by 10% or more (and recently there have been a lot of them) will only deter potential users of digital currencies.
source: fool.com
