Coinapult eliminates Bitcoin volatility with ‘Locks’
MELLISA TOLENTINO | JULY 31ST READ MORE
One of the biggest hindrances in the wide adoption of Bitcoin is its price volatility. No one wants to invest, say $1,000, today and have that value drop by tomorrow. But neither has anyone attempted to address this issue and save investors a pretty penny – until now.
Coinapult, a company that offers services such as Bitcoin wallets, delivery and payments processing, has announced a new service called Locks which aims to address Bitcoin’s price volatility. The service allows users to peg the value of their Bitcoin to the price of gold, silver, British pounds, US dollars and euros. What this means is that if a person locks $1,000 of Bitcoin, they will always have $1,000 worth of Bitcoin, even if it’s value fluctuates.
But why would you lock your Bitcoin to a certain currency when its value could triple in a matter of days? The answer is simple, if its value can triple, there’s also a possibility that its value will plummet at any given time. If more people are going to use Bitcoin to travel, pay for their daily needs, send remittances, or pay for monthly bills, they need some reassurance that its value won’t suddenly plummet.
“People can’t really afford to hold bitcoin for very long. You’ve got to pay rent at the end of the month in euros or dollars, you may even at this time convince your landlord to pay rent using the bitcoin network, but at at the same time, you may have market action that happens during those 15 days that means you can’t cover that anymore,” Ira Miller, CEO of Coinapult explained in an interview with CoinDesk.
In Coinapult’s Lock page, the company gave scenarios as to how the service can help people, One example includes ensuring that a Bitcoin-dependent vineyard owner has the means to pay his employees even when the value of Bitcoin drops within a month.
Miller added that Locks has the potential to get more people to use Bitcoin as it removes the risk of losing a lot of money while still trying to understand how it works.
Let’s say you have $1,500 that you would like to convert to Bitcoin. In today’s value, 1 BTC is equal to $563.56, so your dollars are worth 2.66 Bitcoins. You can use Locks to secure half of your Bitcoins and peg their value to the US dollars. So 1.33 Bitcoins is $749.53. The other half can just be left in your Bitcoin wallet and cashed out when the value increases, so you’ll have more money than when you started. But if things don’t go in your favor, and Bitcoin’s value suddenly drops to $1 = 1 BTC, you would still have $749.53.
Though Locks may seem like one of the best Bitcoin services available today, we here at SiliconANGLE encourage you to scrutinize and investigate these types of services or offerings before you go jumping on the Bitcoin bandwagon.