8

The only way to fix an exchange rate is to constantly trade at this rate. This requires unlimited funds. So assume you want to peg BTC against CHF as in your example. For simplicity, we aim at 1 BTC == 1 CHF. Here's a simple recipe. Have unlimited Bitcoin and unlimited CHF. Find a Bitcoin exchange. Offer to buy an unlimited amount of Bitcoin for 1 CHF/BTC....


7

That would be absolutely possible. In fact, there is a cryptocurrency out there called "Hashdollar" which is trying just that. I didn't look into it yet but if you tie the value of the Hashdollar to the US Dollar, you could use the p2p network to make "real" dollar transaction. The problem here is though, who will guarantee for the value of the Hashdollar? ...


7

You could fix the minimal value of Bitcoin if you had some money and you wouldstate: "I have X$, I will buy each and every Bitcoin you offer me at the rate of X/2100000$". The only problem is that people need to trust you and you have to have enough money. So, if you get en established company (for example, Google) to secure the funds you can fix the minimum ...


6

It`s a geometric series with the base 1/2. After half of the remaining coins are mined, rate is decreased until half of remaining coins since the drop are mined. The rate is convergent, that is, it approaches a finite number and doesn't go on until infinity (like say, 1, 1/2, 1/3... 1/n would). This makes it so that there will never be more than certain ...


5

Adding to my answer on What are some of the proposed ideas to why the Bitcoin dropped to sub $400 in the end of summer 2014?, which I think is still mostly accurate: Bitstamp loot There are about 19k bitcoins held by the hacker that raided Bitstamp. While, as far as I know, they haven't found their way back into the market, it is an amount that would ...


4

Eventually, the difficulty will drop. This will cause the mining to increase. This will cause an increase in the price because the verification problem holding the price down is gone. There's another factor too -- once you've bought mining hardware, the cost of the hardware is a sunk cost. So long as it can pay for its electricity, you'll keep it running. A ...


4

A fixed value, relative to what? To a fiat currency? In which case, should it be US dollars, euros, yens, yuans...? Relative to a commodity such as oil or gasoline of some quality? Relative to gold, silver, platinum, diamonds? A basket of all the above? All of these have very variable values and both the reasons of their intrinsic volatility and the possible ...


4

The most notable cases were: In 2011, the price reached a peak of $32 in June, and went down all the way to $2 in November. A decrease by a x16 factor, or 93.75%. In 2013, the price reached a peak of $266 in April, and quickly afterwards went down to the $65 range. A 75% drop. This can be seen graphically here and here. As for media coverage, this list of ...


4

If I could buy a bitcoin on Exchange A for $2,000, turn around and immediately sell it on Exchange B for $2,500, and make an immediate profit of $500, I would do that all day long, and get rich! But if even a small price discrepancy exists between two exchanges, many people will find it, and start buying on one/selling on the other. All that one-sided ...


3

1) I don't know anyone actively uses Bitcoin, or other altcoin, that is not mining it and/or trying to profit from it. 2) Bit coin price fluctuates, so as a business I would only use it to process a transaction and then convert it to cash ASAP. 3) Why is everyone losing Bitcoin in the news? True cash gets lost or stolen, but this make me fearful that my ...


3

Bitcoin is a decentralized currency and there is nobody with "supervisory power" over it. Anyone is welcome to suggest improvements to the protocol (changing hashing rules or anything else) at any time, and can create a source code patch to any of the several pieces of Bitcoin client software to implement them. (The maintainers of Bitcoin Core or another ...


3

You would need an institution that guarantees 1:1 the interchange. The reliability of that institution, in always being able to perform the exchange, would determine the trust and value-stability in the cryptocurrency. The US Treasury could credibly create a coin that's 1:1 with the US Dollar. Or, hypothetically, another institution that was widely ...


3

I think that trying to tie the value to some arbitrary standard is artificial - for one thing, the value may depart substantially from that other standard and needs to be allowed to vary in order to stablize at an authentic (ie reflecting supply/demand etc) rate. However, reducing extreme volatility would indeed make BTC more appealing as a medium of ...


3

Unlike any other fiat currency, bitcoin money supply could not be manipulated, therefore it's not possible to fix its value in any way but good old buy and sell orders which would require a very heavy investments.


3

As the public develops more confidence in the currency and as the currency is used in wider volume (people start buying more and more things with the currency and it starts to change hands a lot) it will start to stabilize. The current instability seems to be driven by speculation. A lot of people are not using bitcoin as a currency right now but just as ...


3

No currencies are stable unless they have a central bank making it artificially stabile. When that is said, the stability will largely be depending on the size of the economy. I do not, however know exactly how to measure the size of the Bitcoin economy, but I assume it should be measured in terms of the total amount sent between people or companies over a ...


3

NuBits is really interesting in how it pegs to the USD, which they explain in the white paper. I'm guessing you don't want to go hunting through there (white papers can be ... daunting), so the short version is.... If the demand for NuBits goes up (ie, lots of people want to buy Nubits, so the price for a NuBit should rise above $1 USD), the custodians of ...


3

This site can help you calculate the beta of Bitcoin: https://btcvol.info/ "What definition of volatility does btcvol.info use? The standard deviation of daily returns for the preceding 30- and 60-day windows. These are measures of historical volatility based on past Bitcoin prices. When the Bitcoin options market matures, it will be possible to calculate ...


2

Silk road's hedged escrow is a first step in this direction, and seems to work. But all the "trades" are bilateral (SR is always one of the parties) and you can't "buy" the "contract" unless its to hedge a sale made through the SR website.


2

The larger issues isn't can it be done it is why would anyone do it. Central banks buy and sell opposing currencies to keep the value pegged. Generally speaking they lose a ton of money doing this however it provides a public good and being a central bank they can simply create or destroy sufficient money to accomplish the goal. Any losses the central ...


2

The market prices bitcoins, just as anything else (on a free market) according to supply and demand. Supply and demand is prices (expressed in any other good) and amounts. Example 10 bitcoins for USD 140 and 20 bitcoins for USD 139. That is, the lower the price a buyer can get, the more he is willing to buy. This is a value scale. All the users' value scales ...


2

It would be pretty easy to implement this using the Bitcoin source: Have the central bank generate a private key K. Hardcode the corresponding public key into the source. Modify the transaction verification code so that any transaction signed by K is allowed to have outputs that exceed its inputs (or no inputs at all). Modify the verification code ...


2

This isn't an account, but it covers anything an account could. They update their prices based on how many USD they want for the item and the current BTC/USD ratio. There's even an electronic price tag that does this automatically: http://www.bbc.com/news/technology-26031331. Online, it's usually handled by some outside payment process company like ...


2

There is really no way to know why the price of BCH went up recently, but a few of the possible reasons are: People converted BTC to BCH after the planned 2x hard fork fell through source People are taking advantage of the HF call-off with a little pump and dump action source 1 source 2


2

I'm not sure if you're trolling or not, but 200 bitcoins is currently worth ~2,357,000$. ( Which seems to pretty aligned with the number you are giving.) There's no virus/scam or bug, the price simply increased. Congratulations. I'd advise you to make a backup of the private key of the adress you're currently storing the 200 bitcoins on, and either ...


2

Can crypto's achieve the same shop use? For Bitcoin, the trend is in the opposite direction. Bitcoin’s soaring transaction fees, following the digital currency’s 1,300 per cent surge in value in the past year, have made it practically useless as a token of exchange in Hong Kong. “A customer wanted to pay for a HK$56 cup of coffee, but since the ...


2

What you are probably missing is the fact that you can buy partial bitcoins, you don't have to purchase a whole bitcoin at once. You could buy a small bit of bitcoin for $20 if you wanted, it can be an affordable investment for anyone.


1

Bitcoin’s price has crashed. There is simply no other way to describe the -40% price decline that occurred in the first two weeks of 2015. It’s dismal, it’s disappointing and it’s a normal part of a free and open market. While Bitcoin is a transformative technology, it is not immune to the greed and fear that permeate every financial market. ...


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