Post
Topic
Board Economics
Re: How we could "back" bitcoins with something of value
by
5grainsilver
on 19/06/2011, 01:56:47 UTC
Gold has unique physical properties.  It "backs" itself. 


True. And similarly, Bitcoin has unique properties. It shares some of these properties with gold (divisibility, homogeneity, scarcity, etc) and has unique ones additionally (instant transfer across thousands of miles, a billion dollars-worth can be put in your shoe, it's not subject to supply fluctuations, etc.).

Both gold and btc are valuable as money precisely because of their unique properties. Neither needs to be, or ought to be, or even can be, backed by another commodity.

I wish this was true.  But the bitcoin system can be duplicated.  In a week you could have namecoins, and a week later funcoins.  Gold can't be reproduced like that.