BitCoins volatility will be it’s Achilles’ heel

Looking at the price fluctuations of bitcoins and many other clones, it’s pretty hard to imagine how businesses price their goods & services in virtual currencies without safeguard against these fluctuations?

e.g. If the local supermarkets price their goods in bitcoins, % of bitcoins won’t it be very expensive to assume the value within 5 hours for that particular product?

Unless there’s electronic price tag with price changes automatically according to bitcoin exchanges…nobody will PAY bitcoins in supermarket not knowing if they OVER PAY or underpay for the product.

Imagine for example 2010, it’s possible that someone can sell a bag of rice for x bitcoins and remain the same price for a few days but in 2013 the same bag of rice may change in cost of x bitcoins every single minutes, the consumer & retailer will be super confused.

Maybe some shopper may look at the electronic price tags and wait for it to drop in price as bitcoins value goes up and never BUY anything.

Unless the retailers bears the cost of fluctuations by remaining the same price for a long period of time or for the shelf life of that product.

However, it will be so much different for online stores & services…how do you price your product online on ebay, amazon or even web hosting in bitcoins with so much fluctuations?

To be honest, once there are 1000 + bitcoin clones comes out with their crypto currency each promising the sky to the investors, people will be using these as another form of investments instead of real currencies.

So, as a form of investments like paper contracts on the price of beans, rice & coffee bitcoins is very similar in that sense but with non-physical crypto digital form…where you possibly cannot really hold in your hands but instead using a single wallet file.

Let’s assume some governmental or banking cartel decides to pump & dump, insider trading with no legal ramifications.

These groups can easily manipulates & control the price of bitcoins & their clones with coordinated pump & dump and run away with all the money.

Or the worst case scenario, China or some other countries loses BIG on the trading of bitcoins and decided to go the cyber war against the exchange(s) and digitally destroy the exchange.

What can be more worst is some crazy third party decide to fry your computers with EMP together with your digital bitcoin wallet and the power lines with high altitude nuclear explosion.

I think there is already multiple incidents of owners of these bitcoins accidentally format the hard drive and together with their bitcoins wallet file, that is possibly the worst I think.

Of course many people can have multiple back up of bitcoins but to consider it as real global currency and use it for daily life in the year 2040 I think still have a long way to go.