Silk Road forums
Discussion => Newbie discussion => Topic started by: 95sc on May 16, 2013, 11:11 pm
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As the price of BTCs fluctuate do vendors adjust their prices to keep them in line with normal "street" prices or does a rapid increase in BTC to USD rate also increase the USD equivelent price of all items priced in BTC?
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The dollar value of btc fluctuates daily, according to supply and demand.
Most sellers will hedge their prices to the dollar, to combat btc's volatile fluctuations.
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As the price of BTCs fluctuate do vendors adjust their prices to keep them in line with normal "street" prices or does a rapid increase in BTC to USD rate also increase the USD equivelent price of all items priced in BTC?
Hi 95sc,
Yes, most vendors peg their products to the US Dollar, so the actual price in USD stays the same regardless of Bitcoin volatility, but it's value in Bitcoin will fluctuate.
e.g. An item costs $100.
If 1 BTC = $100, then the item will cost 1 BTC.
If 1 BTC = $200, then the item will cost 0.5 BTC and so on so forth. When vendors price their product in USD then it's value in Bitcoin changes with Bitcoin's value at the time.
Please note that Silk Road uses a '24 hour moving average' Bitcoin value rather than a 'last price' Bitcoin value. This enures that Bitcoin's volatility does not affect the market too much! :)
Libertas
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e.g. An item costs $100.
If 1 BTC = $100, then the item will cost 1 BTC.
If 1 BTC = $200, then the item will cost 2 BTC and so on so forth. When vendors price their product in USD then it's value in Bitcoin changes with Bitcoin's value at the time.
Libertas
Dont you mean if an item was $100 @ 100 dollars per 1 btc, @$200 per btc the same item would be .5btc?
I know im not quite as on point as you Libertas, but did i catch a mistake?? ;)
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e.g. An item costs $100.
If 1 BTC = $100, then the item will cost 1 BTC.
If 1 BTC = $200, then the item will cost 2 BTC and so on so forth. When vendors price their product in USD then it's value in Bitcoin changes with Bitcoin's value at the time.
Libertas
Dont you mean if an item was $100 @ 100 dollars per 1 btc, @$200 per btc the same item would be .5btc?
I know im not quite as on point as you Libertas, but did i catch a mistake?? ;)
A mistake, you say? I see no mistake here. Ahem. Nothing to see here.. Move along, move along... :-[ :-[
Well spotted. :P
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Thanks Libertas and Dirtybuiscuitzz718, good info.
and dirtybiscuitzz718, I can't post in the main areas yet but don't want to pass up the chance to thank you for starting the mega-epic LSD thread. Some of the reports are so familiar to me that it just warms my heart to know others feel the same as I do about LSD. Good work!!!
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Thanks Libertas and Dirtybuiscuitzz718, good info.
and dirtybiscuitzz718, I can't post in the main areas yet but don't want to pass up the chance to thank you for starting the mega-epic LSD thread. Some of the reports are so familiar to me that it just warms my heart to know others feel the same as I do about LSD. Good work!!!
Thank you my friend, i do it for you, the people. 8)
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e.g. An item costs $100.
If 1 BTC = $100, then the item will cost 1 BTC.
If 1 BTC = $200, then the item will cost 2 BTC and so on so forth. When vendors price their product in USD then it's value in Bitcoin changes with Bitcoin's value at the time.
Libertas
Dont you mean if an item was $100 @ 100 dollars per 1 btc, @$200 per btc the same item would be .5btc?
I know im not quite as on point as you Libertas, but did i catch a mistake?? ;)
A mistake, you say? I see no mistake here. Ahem. Nothing to see here.. Move along, move along... :-[ :-[
Well spotted. :P
hehe. Your the man Libertas..
We all make mistakes from time to time.
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Bitcoins aren't pegged to any currency. Vendors will adjust the price to match USD or EURO. Most currencies in the world are free floating. That is they adjust to supply and demand. It's all quite complicated. Until the 70's the USD was pegged to the price of gold until Bretton-Woods.