How volatile is the bitcoin right now? For example, what happens when the bitcoin raises 200% vs. the US dollar? Do you change your pricing? What happens if it then drops the next day?
Bitcoin is a relatively stable asset and currency as far as I can tell.
Bitcoin's value in relation to the dollar is a product of demand and supply, like any other currency. However, given that supply is "hard coded" in the algorithm, supply is more or less a constant variable. That leaves demand.
Demand is there as long as Bitcoin has transactional value (how many people accept it as a form of payment) and asset value (how attractive it is as a store of value). Bitcoin has price floors as long as it is useful in transactions (for example, as long as online black markets like Silk Road flourish) and as long as Bitcoin "enthusiasts" accept it as an asset.
Barring some way for the government to thwart the TOR + Bitcoin combo for making anonymous online transactions, I would think that any volatility in the BTC-USD exchange rate would come from volatility in the value of the dollar over that of BTC.
> History tells us that the US dollar is much
> more volatile than bitcoin can be.
There have been at least a couple of recent periods where there was a bitcoin 'bubble.' I'm questioning how he as a merchant, would deal with that (if bitcoin was his main transactional currency)? His customers likely are all using a different currency locally, and would have to exchange that currency for bitcoins.
For example:
Let's say a month of service costs 3 bitcoins, and currently a bitcoins cost 8 rupees (24 rupees/month for service). What happens when the price of the bitcoin rises to 20 rupees / bitcoin? Does the price (in bitcoins) drop? What happens if this significant rise only happens in one market, but not another? What if one 50% of his customer-base experience significant exchange increases, but the other 50% doesn't?
It's a curious thing, because almost no one is being paid (salary/wages) in bitcoins, so they all need to exchange the local currency to pay for service.
> Plus I do not think that Kim will want to
> have anything to do with that currency.
I was using the USD as an example. The same comments could apply to whatever the local currency is of his potential customers.
[ Also chances are that if the bitcoin is volatile against one currency it's not not necessary stable against all others. ]
