Quote from: johnyj on July 04, 2013, 08:18:30 PM

This is a very interesting quesion since when people sell bitcoin for USD, it means they trust USD more than bitcoin

So why do people trust in fiat money, which is created out of nothing by the central banks?

Is it because they have no knowledge about money creation, or because their ignorance about the financial, or their respect/fear about the government enforcement?

One accept fiat money is because all the other merchant also accept fiat money as a payment medium, once this tradition established, it seldom changes

But this is only one reason, another reason might be that they regard fiat money as a safenet, backed by the government. Look at the FDIC rules, it just want to calm people from withdrawing their savings from banks and it worked very well

I think some kind of insurance should be built around bitcoin, to give people more confidence to handle the bitcoin. Saying this is backed by mathematics and network just scared most of them

I trust fiat because my entire life I have been able to spend it almost anywhere. That's all that matters for currency. Can you spend it today and in the future?

People have evolutionary reasons to not just randomly try new things with no track record. That's why gradual changes are so prevalent and it's tough to introduce revolutionary ideas. Society and people through trial and error find a lot of things that work, and it doesn't matter if they understand why it works or not. People tend to get angrier around red things, for example. They don't need to understand it. It just served us well for a while. There are societal customs that don't make sense, but people aren't about to change them or even question them.

Now there are times when superior ideas do come about and take a while to catch on. Usually it takes some set of early adopters to test it out and prove it works, then more get on board. This is the case with almost any new idea that ever happens. And a lot of the time, the better ideas win out.

So trusting fiat will work until it doesn't. No one needs to know why Bitcoin is superior. Only the early adopters do. The rest will follow along once they see it works and see some tangible ways. They don't need to know how it works any different than knowing how an internal combustion engine works when they drive their car or how structural engineering works when they drive across bridges. They see lots of cars driving down the street and across bridges and figure that's good enough.