Quote from: caveden on September 21, 2010, 08:55:43 AM

Quote from: em3rgentOrdr on September 20, 2010, 09:34:32 PM

FreeMoney is right. Unfortunately, hard-money Austrian-economic libertarians are immediately critical of bitcoin when they find out that it is backed by "nothing" Shocked

!

Exactly like gold and silver. Angry

Not exactly.

As a commodity; gold and silver are backed by the labour/energy that has been expelled to mine and refine it. They also have inherent value because these metals are rare. (Well, rare for now. There are some situations that *could* change that.)

As a currency; gold and silver are backed by what others are willing to trade you for it.

Bitcoins are similar. As a commodity; electricity/energy is required to "mine" them virtually. They have inherent value because they are rare. (Only 21,000,000 will ever be mined.)

As a currency; they are backed by what others are willing to trade you for it. (Bitcoin is seriously lacking here. Sell more stuff, guys! *hint* *hint*)

Now, if the power/internet went out for an extensive period of time, and I needed to buy something, I'd rather have gold/silver. (Food and other supplies would be even better actually, but I'm trying to limit the scope of my post to gold/silver/bitcoins.)

For conducting transactions over long distances, I'd rather use Bitcoins.

As it was said before, they are complimentary to each other. Cheesy