Quote from: mechanikalk on April 18, 2013, 03:32:44 AM

One of the things that I think was overlooked was that every currency that has been successful in the passed that is fiat has done so by having some mechanism by which to initially peg a value to that currency. In the case of the dollar it was gold and silver and in the case of post WWII europe it was the dollar. Only in the seventies did the currencies begin to float with nothing backing them at all. I am wondering how price stability will be achieved for bitcoin overtime.

Oh, this is very important to know. This means, although U.S. allows autonomy government to issue their own currency, that money need to peg its value to gold or USD, and if it succeeds competing with USD, it eventually would begin to float.

A few other posters explained gold is not easy to carry. At the moment, Gold is not any harder to carry than bitcoin. A gold certificate is just paper. few are stupid enough to take the gold out of the bank and carry with him - think about the anti-fraud validating process to go through when you store the gold back to the bank. It is not harder to trade neither, because it is easier to find someone who would accept a piece of gold certificate than someone to accept bitcoin. You may say in the future this may change, but it as well can be changed by having a bank issuing gold certificate as a currency - the condition for this to happen has been met long before.

Guess I have to put a bold statement to inspire some really meaningful argument. So here is one:

Bitcoin is invented to replace fiat money, but if people don't trust fiat money, they don't have to wait for the invention of bitcoin to start replacing it. Thus:

Not true: The popularity of bitcoin is because: People distrust fit money always, now they finally have a tool to fight fiat money.

Perhaps true: The popularity of bitcoin is because: people speculate without knowing fiat money is a bad thing. Some others think they are fighting fiat money and sing praise of them.

The difference is non-trivial. Whether or not people consider alternative to fiat money is good, is going to be tested when bitcoin value plummet. Only those who believes in its value would keep trading them, preventing a sudden death of bitcoin. Speculators don't believe in value of anything.