One of the most often heard comments about Bitcoin is how consumers and businesses want to protect themselves against the price volatility. While it is far easier for businesses to use a payment processor and convert funds to fiat currency on the fly, the story is quite different for regular consumers. Some companies offer Bitcoin “locks”, but the question is whether or not people should bother in the first place.

Also read: Avoiding Bank Account Suspension Due To Bitcoin Transactions

Preventing Volatility As A Consumer

When it comes to holding Bitcoin as a consumer, there is no direct need to protect against volatility. If the end user wants to protect their digital currency wealth from volatility, they would be better off converting the funds to fiat currency immediately. There are plenty of Bitcoin exchanges available. Furthermore, selling funds through a Bitcoin ATM is also possible.

Unfortunately for all Bitcoin consumers in the world, there is no proper service available that will protect funds from volatility. That is, unless the user wants to trust

The reason third-party services should not be relied upon is because they will hold the private key to the Bitcoin address used for locking funds during a certain period. The end user will not be in control of their funds at any given time, and has to hope the money will be released at the agreed upon time.

This is one of the most interesting aspects of Bitcoin, as there is an equal chance of the price going up, or down. To some people, this may seem like a scary thought, but it’s far better than realizing the fiat currency you hold is always declining in value. What makes Bitcoin different is how easy the charts are to read, compared to finding out more about the value of fiat currency.

One of the most obvious ways to circumvent this issue is either not worrying about the Bitcoin price in the near future, of exchanging coins to fiat as soon as possible. However, that would also lead to potentially missing out on a major increase in value over time, which is not an unlikely scenario.

In the end, it all comes down to the preference of the end consumer. If they truly want to lock away their coins and protect it against a price decline, they will have to give up control of the private key to a different company. The other option is to use an exchange or Bitcoin to convert, or simply hold on to the funds.

Source: Reddit

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