Most of the markets right now where actual trade takes place rather than speculation are simply taking this exact approach, whatever the exchange rate is for the currency at the time of the trade, the value will be decided based upon an underlying stable value. That's totally not possible with a traditional currency where you print price stickers and put them in shopping aisles, but it's par for the course for btc right now and probably will remain so until a stable value for the currency can be worked out, but this is no big deal.
Stable assets are more useful for writing long-term contracts. People who are trying to avoid risk (rather than pursue it) will want to write contract terms that have future payments in a stable currency rather than in some more volatile asset like gold or stock. For example, if you wrote a contract where one person does the work and the other one pays in gold in five years, how do you know whether it's fair or not? Would you be willing to take either side of the bet? It's all going to depend on where you think gold will be, and if opinions differ on that then it makes contracts that much harder to write.
Of course there is inflation risk with any currency, but usually it's at least possible to estimate it and make allowances for it when setting a future price. It's a matter of degree and Bitcoin isn't even close to being stable. Both upside and downside risk are a problem, for opposite sides of any deal.
There's also little reason to think that broader adoption will make it more stable. Supply is fixed, but demand could go either way, depending on greed and fear. For a stable currency, you need a stable demand that can withstand (at least to some extent) big swings in popular sentiment.
With regards to market cap, yes, that does need to grow in order that there be a stable value. This actually suggests that the price will pretty much have to go up though, as the expansion of the bitcoin supply is known and low while the expansion of the money cap through fiat currency buys is both unknown and unlimited.
- Disco Stu
This is not what BitCoin should or can do. It wants to join the pool of millions of different asset types and bring some new and unique characteristics to the party. It can not become a separate economy, because very, very powerful (and completely impersonal) forces drag everything into the global economy. If you try to separate the economies, all you actually do is create arbitrage opportunities, and the act of exploiting those returns the currency to the general market.
For BitCoin to remain fully separate basically requires them to be utterly useless as anything but tokens in a video game. The posted argument is complete gibberish.
