Nice discussion @heiditravels.
The problem with stable coins, though, is that they can't compete with fiat currency on price stability, because central banks have complete centralised control of the fiat currency.
Eventually, however, once Bitcoin reaches a critical adoption rate, it will begin to stabilise in price. Instead of 3% inflation it may be 3% deflation and your saving will increase in purchasing power gradually each year. 👍
Hi @benadapt, so in your opinion how long to reach "some" price stability on BTC?...It will happens before stable coins reach more popularity? Cheers
Why do you expect price stability on BTC? That is impossible.
If the volatility is high, is gonna be difficult for the merchands to adopt BTC as a payment method
It will be a long time, unless you consider consolidation periods like what we are in now to be relatively stable.
I think the popularity of stable coins and the stability of bitcoin is mutually exclusive, the instability of bitcoin is the very motivation for the existence of stablecoins.
Yeah, I agree that it will take a very long time before Bitcoin becomes stable on a day to day basis, but we have already seen Bitcoin stable on a month to month basis with gradual increase in value over time (ignoring the crazy price action at the end of 2017). Of course, we will still see huge price movements up and down in the mean time. 👍
Here's a more in-depth discussion on Stable coins from Bitcoin-dev Jimmy Song, which explains my points.
Hope that helps. 👍
There is yet to be a fiat currency that is stable. Each and every one is inflationary, and increasingly so now that they’ve been moved from the gold standard to now an unbacked fiat currency system.
It will be a very long time until Bitcoin achieves a stable price, perhaps after all the bitcoins have been mined we will see a somewhat stable price. There’s no way to control its deflation rate however without being able to control the supply of bitcoins... since there’s a cap of only 21 million coins to exist, we’re set up to see some wild deflation over time.
Thanks for the reply @heiditravels.
Yeah, I agree that it will take a very long time before Bitcoin becomes stable on a day to day basis, but we have already seen Bitcoin stable on a month to month basis with gradual increase in value over time (ignoring the crazy price action at the end of 2017). Of course, we will still see huge price movements up and down.
With fiat currency, yes they are inflationary but it's on a level that most people don't notice year on year (unless you live in Venezuela). With stable coins, the supply is not large enough to reproduce this. Steem, for example, started out with an aim of being pegged to the US dollar, but it ended up pumping to $8 during the Bitcoin bull run.
That's just my 2 cents, though. 👍