Quote from: trebronics on August 24, 2010, 03:31:45 AM

Quote from: Red on August 24, 2010, 02:53:19 AM

Quote from: creighto on August 24, 2010, 01:04:24 AM

As a medium of exchange, yes. As a storage of value, well, that's debatable.

Hear hear!

There appear to be some people who think that bitcoins represent a store of value ABSENT the acceptance of bitcoin as a commonly accepted medium of exchange. Nothing could be more preposterous. What value would it be storing?

The demand by others for bitcoins. That is exactly why gold is over $1200/ounce. Bitcoins are very similar to gold. If you understand why people pay so much for a yellow metal that sits in a safe and does nothing, then you will have your answer.

People demand gold for it's 'store of wealth' quality.

Gold has this quality (moreso than silver) because of it's long history as money.

Gold became this defacto money because of it's wide demand as a commodity.

It became a widely demanded commodity due to it's usefulness and beauty in jewelry, and it's relative scarcity.

Gold is no longer scarce relative to other elements nearby on the periodic table such as uranium, thorsium, etc.; nor as compared to silver, the other historic money. Yet gold continues to maintain it's position as a store of value, perhaps by shear historic inertia. Anyone can say that this is not a sustainable position, and that the value of silver should overtake that of gold, but no one can say *when*. If bitcoin is the first cryptocurrency to be accepted by the market, then bitcoin will continue to dominate that market even if some technically superior solution comes along. How many people here have seen a betamax vcr?