TLDR: Bitcoin will win in the end and volatility is not an issue.
It seems like the most common argument I see against bitcoin is the day to day volatility makes it a bad currency. Even though it still has all the features built in necessary to be used as a transactional currency I agree that at this point it is still too volatile. This talk does a good job of explaining the growth cycle of bitcoin and why this volatility is to be expected and will settle down over time. Bitcoin has to grow in market cap by several orders of magnitude before it can really be a stable store of value and that takes time but I believe it will happen because it has better characteristics of money than anything else that exists currently. That is all it needs, to be slightly better than current money and over time it will be adopted just like how gold took over for thousands of years as the most trusted form of money because it was the only thing that had the fundamental characteristics of money. Currently it would be better to think of bitcoin as a commodity, as it grows volatility is decreasing and eventually it will level off once it has reached market saturation and there are better exchanges for liquidity and arbitrage in place (Second Market, Fortress, ETF, etc.). Once it has reached market saturation it should be relatively stable as compared to other fiat currencies (USD, EUR, CNY, etc.). Some core features of bitcoin that make it different (and better) than any other currency on the planet; 1) Open source - The full bitcoin source code is posted on github and available to anyone for review. It is an open source protocol just like TCP/IP, HTTP, SMTP, etc. that anyone can contribute to and improve. This means bitcoin is highly adaptable and flexible and can be improved over time and have new features integrated into it. Eventually people will be using bitcoin without even realizing it, just how they use the protocols I just mentioned whenever they access a webpage or send an email. 2) Decentralized - I would invite you to watch this segment by Chris Odom on the relation between bitcoin and bittorrent. Basically bitcoin cant be shut down because there is no central point of failure. 3) Deflationary & Divisible - Bitcoin is hard coded at a limit of 21,000,000 bitcoins ever and each bitcoin can be divided into 100,000,000 units. That means that each unit has the ability to expand to hold a near endless amount of value and since there is a hard cap on the total supply the demand is what dictates the price of individual units. 21,000,000 may seem like a lot of but if bitcoin were to take over just 10% of the value of gold (not to mention remittances, wealth storage, tax havens, dark markets, etc.) it would have to swell to well above $10,000 or even $100,000 per unit. It really is a modern day gold rush because there is only so much that will ever exist. It really takes weeks of research to fully understand what makes bitcoin a better form of money. I have done my best to break it down and simplify it but there is really so much more to it (I haven't even discussed the fact that it opens up automated contracts, direct property transfer, zero trust voting, autonomous corporations, etc. etc. etc. there is a whole world of potential that was never before possible because people couldn't figure out zero trust systems. This problem has been solved and the world will never be the same, you cant uninvent bitcoin just like you cant uninvent the internet, the car or the nuclear bomb. It exists now and there is no going back). If it is something that interests you I would highly recommend digging deeper as I have only scratched the surface. If not, feel free to ignore it, it will keep doing its thing behind the scenes, slowly (or maybe very very quickly) chipping away at the current model.
Digital money that’s instant, private, and free from bank fees. Download our official wallet app and start using Bitcoin today. Read news, start mining, and buy BTC or BCH. If the euro is overvalued relative to the US dollar but undervalued when compared to the yen, the trader could use US dollar to buy JPY, use the JPY to buy EUR and later convert the euros to USD at a profit. Final Words. Arbitrage allows a trader to exploit price discrepancies in assets, but this requires speed and adequate algorithms. Simple arbitrage. Buying and selling the same coin immediately on separate exchanges. Triangular arbitrage. This process involves taking advantage of the price differences between three currencies. For example, buy BTC in USD, sell it to make EUR, and then exchange those EUR back to USD. Convergence arbitrage. Coingapp offers to find the best arbitrage opportunities between cryptocurrency exchanges. Features: - Catch best buy/sell opportunities. - List all exchanges on opportunity details. - Monitor available/disabled transactions. - Filter currency pairs (BTC, ETH, USDT, USD, EUR, LTC, TRY, JPY, KRW,… Arbitrage is the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset. Everyday there are thousands of markets, trading billions of dollars in the cryptocurrency sector.
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