Quote from: evoorhees on June 19, 2011, 02:42:15 AM

Quote from: vector76 on June 19, 2011, 02:14:23 AM

Bitcoins do have cool features, but the features serve no purpose other than in the role of a medium of exchange.

False. You're forgetting that Bitcoin is also a software system that allows ledger transactions to be sent and validated with no central authority. THAT in itself is a huge achievement, and provides a great deal of that "purpose" you seek. It's easy to confuse these things, of course, because Bitcoin is the name for both the software system and the currency used in that software system. The two should be understood separately, and the latter derives its original value from the former, and it's long-term value from the supply and demand of that original value. Make sense? =)

Gold and silver have use as jewlery and in industrial purposes. Bitcoin has use as a recording and validation mechanism for transactions. Gold, silver, and Bitcoin all additionally have value as monetary instruments due to their properties.

To me this seems to reaffirm what I said, yet draw the opposite conclusion. With regard to the distinction between software vs currency, I could envision the software having utility outside of the bitcoin universe, but the software is not what is being exchanged or priced. I think the key thing is what you called original value of the currency, which I am interpreting as utility in some role other than as a medium of exchange, like jewelry or industrial purposes. But I'm not seeing how the units of currency have any such utility.

I will grant that the software does have value and does add utility to the currency. And I will grant that the currency derives all its value from the software, but I maintain that the software only adds utility to the currency in its role as a medium of exchange.

A security strip in a Federal Reserve Note improves its usefulness as an exchange medium but it does not give the currency any industrial value.