Quote from: creighto on November 22, 2010, 02:53:43 AM

Quote from: Lexington on November 22, 2010, 01:05:56 AM

I think that bitcoins will work beautifully as a transactional currency. I do not see people using them for savings.

Bitcoin is a better store of value than any fiat currency in the world, but everything is relative. Good money is chased out of the market by not-so-good money, so your Bitcoin/gold duality theorem might be correct.

Gold is no longer money and it should remain that way. People just need to realize that money exists only in the mind, to make transactions fair. Money is the human concept of value as it relates to the real world. Gold is payment in full by virtue of it's existance in the real material world (any physical object can be payment in full but gold is best if you want to store value for the future). Gold should never be linked to the imaginary in any way. Bitcoins are the best representation of the imaginary money system because they are only a small step away from being imaginary. They have just enough structure to ensure a constant supply (stability).

No money supply can ever be permanently stable. All systems can be gamed. But, if you save in gold then the failue of money can never hurt you. If bitcoins fail someday then the bitcoin savers will be burned just as bad as the dollar savers will be. The gold savers will just shrug and convert some of their saving gold into whatever comes along next as money.