Quote from: JoelKatz on September 05, 2012, 12:04:45 PM

Quote from: ChupacabraHunter on September 04, 2012, 06:32:38 PM

Please help me understand/explain to an economist friend of mine...

He argues that Bitcoins have no chance in global success because a this system be used to create credit.

Bitcoins cannot be used to leverage. --> You cannot use Bitcoins to create credit. ---> It can't replace existing credit already created by the current system.

For Bitcoins to be successful, it has to be able to replace the existing debt!

Please help me:

Where is he right/wrong?

He's wrong because I can owe you 100 bitcoins without having 100 bitcoins. Heck, I can owe you 25 million bitcoins even though 25 million bitcoins will never be in existence at the same time.

Unfortunately, no. Just like the gold standard, a paper money system was created with gold as backing, and as gold backing was made redundant at a point. It's equally plausible to create a paper system with 25 million bitcoins and get rid of Bitcoin backing at some point. But the question here is whether Bitcoin can get to that stage. (?)