Quote from: MatTheCat on April 21, 2013, 12:16:18 AM

Quote from: BTC Books on April 20, 2013, 10:35:01 PM

So you're saying that if a major, world-wide store of value (silver) crashes and burns; bitcoin - another, but appreciating, store of value - will plummet as well?
Interesting.

No smart arse.

I am saying that if there is another widespread deflationary event, that Bitcoin will crash and burn. Of course, so will everything else but Bitcoin will top the list by a long way.

What happens in just a single market isn't greatly relevant, especially not markets as controlled and manipulated (and therefore markets that defy all rules of logic) as the PM markets.

A lot of the points you've made ring true. My hunch is you will be proven right in the end. These are strange times. Any reasonable person knows a deflationary event is imminent, and the usual safe harbor (PMs) is being manipulated with naked shorts. When you're the Fed and can short using printable currency, there is little to lose in the short term. Will Bitcoins serve as a modern safe harbor from the bankers? In the long term, I do not think they will.

Bitcoins are an absolutely fascinating financial instrument. However, the fact that they are backed by nothing, not even a government, will play a leading role in its volatility. Being backed by no government, Bitcoins must be readily convertible to some useful form to ensure long-term survival. Faith will not suffice. Faith is fiat and fiat is faith. I believe this is where an alternate crypto currency will emerge. The act of mining will produce a useful product which can be redeemed at a later time. Redemption will destroy that particular unit of currency. What form this product will take is anyone's guess. I'd be surprised if someone wasn't working on this concept already. In the very, very long term, I believe stored energy will be the next currency, but that is for another topic.

I'm also troubled by the fact that all exchanges look to Mt. Gox for pricing information. This is problematic for many reasons. We've seen the effect that DDOS has had. What happens when the government of Japan seizes Mt. Gox's bank accounts over some trumped up charge, or worse yet, seizes the servers and never returns them? I believe something like this is bound to happen. What do you think will happen to the value of a Bitcoin?