There is an integral connection between fiat currencies and shop prices.
Can crypto's achieve the same shop use?
If a crypto has a giant user base, It can be less physical than Fiat. It needs to have some physical coin, institutional and material equivalence, how can that be achieved?
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 transaction fee was HK$97, we had to decline,” said Paul Li, manager of the Crescent Moon in Kowloon, one of 30 establishments in Hong Kong that accept the digital currency in lieu of cash. “The transaction fee was only about HK$5 to HK$6 in August. Now there is no incentive for people to actually use bitcoin.”
If a crypto has a giant user base
I guess Bitcoin still has by far the largest user base of all the cryptocurrencies.
Apart from uptake, a second area for consideration is the utility value. When the utility value is high, the cryptocurrency is free to become commonplace. Factors like, can you use it to buy a cup of coffee, how expensive a transaction is, how long confirmations take all affect the utility value.
At the moment, there seems to be a high percentage of buy and sell trading transfers from speculators compared to general transaction purchase transfers. This makes the price especially volatile. Also, the volume is low and the price is relatively low so with a little financial backing and a little effort it is still possible to drive the price up or down relatively easily compared to traditional fiat currencies. People or organisations do this for profit.
There are also, it seems, many uneducated investors who will buy on the rise and sell on the drop, and those same who are moved by news articles without having any real understanding of the product or technology. Bitcoin is "Hot" right now. These things tend to make price fluctuations wilder.
I expect that given time Bitcoin will 'find its level' so to speak, remembering that it is still especially new and it must find its level against all major global currencies and commodities. As the consumer market makes more use of Bitcoin on a daily basis the price is also more likely to stabilise.
