Quote from: nobbynobbynoob on October 07, 2012, 11:41:46 AM

Quote from: sturle on October 07, 2012, 11:22:54 AM

And the value will of course drop to the bottom if Bitcoin is deemed illegal. Both I and most other people will get rid of all we have as soon as possible, and it is going to be hard to do it in a legal way.

I'm not convinced that's true. After all, prohibition has never made illicit drugs cheap, quite the opposite!

Prohibition has made illicit drugs more scarce. Supply goes down. The addicts aren't affected much, so demand stays up. When supply goes down and demand stays up, the price goes up. This is very basic economics.

Bitcoins however are produced in the same amounts no matter the legality. Making them illegal just means fewer people will want them, which makes demand go down when the supply stays exactly the same. If Bitcoin were made illegal tomorrow, all legal bitcoins will go on the market today. And you can see how this thread alone makes the market nervous. Wink