Quote from: User_513 on January 06, 2014, 05:03:08 PM

Ooh, a post by a Keynesian telling us all why Bitcoin isn't money. I'll make sure to pay lots of attention to this one.

I LOLed. Well, I'm an Austrian and I actually agree that bitcoin isn't money...yet. Bitcoin is a virtual commodity with the potential to become money. It has to be more than a store of value and a medium of exchange. It has to be the MOST liquid commodity, the one thing people accept in trade more than any other. it needs to become more valuable and less volatile to actually become money. I think this has a reasonable chance of happening because of speculators.

Good speculators buy low, sell high, decrease volatility of the market, make profits and continue speculating. Poor speculators buy high, sell low, increase volatility, loose money and quit the game. Over time, the incentives cause the market to become less volatile and that has actually occurred so far. This last "bubble" was proportionally about half the size of the one before it in April 2013, which was in turn less than half the size of the 2011 bubble. Bitcoin will replace gold before it will replace fiat.