Quote from: bittersweet on June 27, 2011, 02:52:37 AM

Quote from: bitcoinBull on June 27, 2011, 02:18:36 AM

Us dollars, Euros, etc. aren't something of value in return? They are. All that trading for USD is the real economy. It doesn't need to be trades for drugs, porn, or socks to be real economic activity.

No, it's not the same. If you have to exchange money every time you want to buy some real goods you can just as well get rid of Bitcoins completely and stay with USD and gold - it's less hassle and less risk. "Economy" based solely on generating numbers and selling them for USD is not sustainable in the long run.

You've already assumed that people buy BTC in order to buy real goods. They don't. We know that because the volume on the exchanges (who trade BTC for USD etc) is far greater than the volumes merchants see (who trade BTC for goods).

So we know that most people buy BTC to store and transfer value, not goods per se. They do so because bitcoin has many advantages over USD and gold (digital, decentralized, etc). I agree it carries more risk, but with that risk also comes reward

. Bitcoin is like any other speculative asset (which can include any investment: currencies, real estate, commodities, tulips, etc) and is certainly one of the riskier (since it is newer).

But the speculation is not that people will want bitcoins as collector items or to buy alpaca socks or virtual avatars or anything else. I speculate mainly that people will want bitcoins to store or transfer value not seizable by a central authority (which is to say that bitcoin is secure), and that others will continue speculating.

Ask the financial industry if speculation isn't a "real economy". Or ask a homeowner burnt buy the mortgage crisis. Bitcoin is a very real economy of a digital good and could be sustainable for as long as we live in a digital age.