Quote from: JorgeStolfi on December 16, 2013, 03:17:34 AM

Quote from: johnyj on December 16, 2013, 01:57:04 AM

One extreme example:

Suppose that one guy have 31 million dollars, he bought all the 21 million coins at $1, and sold 10 coins to others. Then, he still have $10 million at hand. Then he refuse to sell any coins below a market price of $1 million and are willing to buy any coin at a price of $1 million. Then bitcoin's market price will be $1 million, and his total net worth will be $21 trillion (By using only 31 million dollars, he raised his net worth to 21 trillion dollars)

So the guy did no productive work, but just by sitting on his Bitcoins he got so fabulously wealthy that he can buy the US Gross National Product wth only half his wallet.

Don't you feel that there must be something wrong with this scenario?

Being rich means that you own a disproportionate slice of the world's real wealth. You cannot increase your slice without reducing that of someone else.

The Bitcoin cabal cannot force people to use Bitcoin to buy things or services. If doing so means giving their slice of the world to the Bitcoin cabal, people will use some other currency.

This is wrong. This assumes that wealth is finite and that it's a zero sum game to determine marketshare of that wealth. This doesn't take into account how new value springs into existence.

Take the computer for example and assume that an economy only has 1000 dollars of coins circulating. In the past, we had no computers. The first time someone invented a computer, it was still $0 dollars, because new products always have a market value of 0 when they first enter the scene. It's only when people assess the utility of the product that they assign value to it. Assume for a moment that the computer is eventually valued as being worth $500. What is the worth of the entire economy? That would be $1500. Why? Because wealth is not only the coins that circulate. ASSETS are wealth as well. This is how economies grow and it's the reason why people advocate steady monetary inflation in order to match this growth of the economy (which is through the creation of new assets). If the money supply grows evenly with the growth of all the assets, you will have no inflation and no deflation.

Bitcoin is a new product as well and it too started at 0. But it's being assigned value based on its utility. It CREATES new wealth, it doesn't take away money out of the economy.

Value is subjective and essentially exists all in the mind. It's PSYCHOLOGICAL. If humans believe something to be useful, they create wealth through that perception. It's not a zero sum game and even Kenynesian economics wouldn't claim that the economy works this way.