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Comment by dcist | Hacker News Reader

I fail to see how something with wildly fluctuating value like bitcoin can ever serve as a stable currency or medium of exchange.

Maybe it's a "less terrible" solution in poor countries with inflation challenges, but I don't see that as a strong proposition for the utility of bitcoin. Cigarettes are used as a medium of exchange in prison. That doesn't serve as a strong argument for using cigarettes as currency.

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Volatility is only problematic to the downside, not the upside. Bitcoin's volatility is skewed to the upside. Yes if you were not advised properly, and buy the top, you may be down, but only temporarily.

There are long phases in BTC's history where 100% of holders are in very handsome profits. And that's the problem?

No, it's also problematic to the upside if you're trying to use it as currency or medium of exchange rather than a speculative investment. How do sellers of assets price things? If I'm trying to sell a home in bitcoin and btc surges in value one day, do I lower my price accordingly? Or do I wait to see if btc goes back down a bit and settles? Volatility - both up and down - is destructive to price discovery.

If you're just making long speculative investments in btc and volatility is skewed to the upside, well sure that's fine but you're not using bitcoin as a medium of exchange, you're investing in it as a security.

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