I read this little article and I'm curious how much truth there is to it's claims, specifically:
How can Bitcoin become a real currency if it's not used in transactions? And why would anyone use it in transactions if becoming a real currency offers so much more price appreciation? This contradiction is a core problem, and it's a reason why it's probably doomed to fail (real currencies don't have this issue, since central banks prevent rapid price appreciation, and they mandate that the currency be used).
Read more:
http://www.businessinsider.com/if-you-believe-in-bitcoin-you-should-never-buy-anything-in-bitcoin-2013-11#ixzz2kM39YlIJWe'll here's the thing.
Bitcoins are used in transactions. The author's theoretical problem has been discussed from the very beginning. People were raising the exact same issue in 2010 when bitcoins were trading at a nickel...and people went on and bought them and spent them.
I don't know that there's a real academically satisfying response to the complaint. On the one hand, the author raises a serious economic concern (though, he's quite late to the party in raising it): That the deflationary nature of bitcoin will contributes to the system's failure. And on the other hand, there is the following fact: People spend bitcoins.