Several days ago I was thinking about what people mean when they say 'intrinsic value'; and I realized it is exactly because bitcoin doesn't have intrinsic value in the traditional sense (meaning that people could use bitcoin for other functions — e.g. gold can be used in electronics and jewelry, or that water can be used for drinking) that makes people want to circulate coins in the economy. Otherwise people would treat bitcoins like gold and horde it. The speculative nature of digital currencies is what will keep coins moving when we mint the last 21 millionth bitcoin. I think it is this very feature that might prevent a deflationary spiral.

There is something about the idea of virtual currencies as a vehicle for value, not a final representative form of it, that strikes me as interesting. I would love to hear peoples thoughts about this.