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The meaning of the word "stabilize" isn't clear from the article, despite being used 12 times in the body and once in the title.

It would have been easy to make the article more clear. Simply explain what aspect of Bitcoin is supposed to stabilize.

Given the unending fascination with the USD/BTC exchange rate, it can be assumed that the author is referring to this metric. The inclusion of the heading "Does the price of Bitcoin have a Nash equilibrium?" also supports this idea.

However, if this is the case, why does the author include the following quote the middle of the article:

Why has Amazon stabilized, and will bitcoin do the same? When Amazon shares debuted back in 1997, earnings were non-existent. […]

The USD price of AMZN has in no way stabilized:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?s...

As you can see, it's a concave-upward curve, punctuated by various declines, all the way back to 2003.

This may sound like hair-splitting, but I think there's a real possibility the author is actually talking about USD/BTC exchange rate volatility. This is an animal of a completely different stripe.




I would say that stability refers to purchasing power, and doesn't need to be a flat line. It can also be a simple math function (liner, logarithmic, exponential) which means that it is somewhat predictable. (Edit: I think a better word than "stable" may be "dependable", which is probably what the article meant).

For example, the US Dollar loses purchasing power over time, but that is OK, since it is mostly at a predictable rate. But when something has wild swings up and down, and random times, then it is less suitable to either use as a currency (the stock person with the price gun will be working overtime correcting prices on everything several times a day), and it isn't that good of a store of value if there isn't any reason for it to not lose all of its value over a given period of time.

The Amazon graph you linked to does look fairly stable, a nice exponential function that has very good reasons to remain so for a good period of time (not saying this or anything else is guaranteed, but at least there is something tangible behind that price).




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