Could Art & Music Be the Key to Crypto’s Widespread Acceptance?
Cryptocurreny's volatility is based on speculative value and has caused many to steer clear of Bitcoin and all its relatives.
Nobel Prize-winning economist Professor Robert J. Shiller stated during a panel debate,
“What bothers me about bitcoin is that the enthusiasm you see is like a speculative bubble. It’s selfish.”
Cecilia Skingsley, the deputy governor of the Swedish Central Bank, also stated,
“It’s too volatile to be used as money. [Digital currencies] don’t store value, they fluctuate, and they’re not at a stable rate of exchange”.
It seems big money isn’t going to get involved until Bitcoin’s price stabilizes. But when will that be?
With what people are now calling the “Bitcoin crisis of 2018”, for some it looks like Bitcoin will never stabilize, thus never be a currency people can trust to use for everyday purchases.
This concern has merit. In the past people have been swept away by fads and crazes such as Tulip Mania, and Railway Mania only to be holding the “hot potato” when the speculative bubble crashed. Investors today are more cautious, bowing to the unfortunate losses of those in the past caught on the wrong side of the sell order, rather than to any promises the future in cryptocurrency might bring.
Art & Music Could be the Catalyst for Stability
The problem is actually very simple. Currently, nothing is sold for a stable Bitcoin price. In other words, even though some retailers have adopted the idea of accepting cryptocurrencies, they are doing so using “quick exchange” technology. By quickly exchanging the Bitcoin into USD at the time of purchase retailers can assure themselves that they will get their profits. Retail prices listed in bitcoin change according to the value of Bitcoin against the USD on an hourly or even minute by minute basis. Consumers have no idea how much a particular item will cost in BTC tomorrow. And how can it be any other way, for the same retailers must restock their inventory using USD? And so Bitcoin remains stuck in a void of speculation for no one will set a price and stick with it. The cost of bread and milk in Bitcoin changes every day.
However, art doesn’t rely on a supply chain. Art prices are mostly speculative in and of themselves with art investors speculating on which artist might possibly “make it big.”
And the exact price a particular piece sells at is completely subjective, and mostly at the whim of the gallery. What difference would it make to the art market at large if a piece sold for $150,000 as opposed to $160,000? Such a difference would not affect the prices of similar works.
It’s already well understood that what’s needed to stabilize cryptocurrency is retail acceptance. The more that consumers make purchases using Bitcoin, and thus the more transactions that take place, an averaging effect on the value of Bitcoin will cause the volatility to subside. The more the volatility subsides, the more consumers will see the actual cost to value ratio stabilize, and then it would be a short matter of time before a loaf of bread cost the same in BTC day after day.
But retailers aren’t accepting Bitcoin yet. Why not?
According to a report released by S&P Global Ratings:
"At this stage, we think that retail investors would be the first to bear the brunt in the event of a collapse in cryptocurrencies' market value."
It’s exactly because Bitcoin is volatile that retailers dare not take the risk, thus perpetuating it’s volatility.
It’s the snake eating itself. A self fulfilling prophecy. Is there no one brave enough to set a fixed Bitcoin price for what they are selling and stick with it?
Enter the Artist
More than any other player in this new economic paradigm, the artist and musician have at their disposal the freedom to set a fixed BTC price for their works. They can accept the fluctuation more than any other seller without disrupting the market. And with the prospect of more artists accepting Bitcoin, more artists will also be looking to buy other things with it, and this could lead to the same averaging affect and lessening of volatility. However, perhaps not as fast as with mass retail adoption. Never-the-less, it’s my opinion that artists may hold the key to bringing cryptocurrency to the masses.
I hear you and agree, @artopium. As one trying to sell their wares for Steem I can agree that the volatility is a problem. And it is hard to get the USD out of my head, in part, because my expenses are in USD. I have tried both valuing in USD that will be converted to a Steem price at the transaction and just valuing in Steem and honestly neither are as easy of comfortable as just selling in USD. Still experimenting . I recently tried valuing items strictly in Steem irregardless of a declining price but have not gotten any real interest in that idea yet.
I personally believe that within the steemit environment everything should be valued in Steem. I wish that post payout price on every post were not USD. That would go a ways to changing peoples brains from the thinking that Steem is just fiat for another fiat.
I say just set the price very high. In your mind, let's say you want $5000 USD for a work. What's the lowest Steem could go and you would still sell that work? $1 USD? So sell it for 5000 Steem. But you could average it too. How long does it usually take you to sell a work? What's the average price of Steem over the same period of time? Or, if you accept 1000 Steem for a $5000 painting do you believe Steem will go above $5.00... at any point in time? I think there are a lot of ways to do it.
Art not War <3