Quote from: Gerken on October 08, 2011, 12:47:08 PM

So you think bitcoin will be saved by people buying them all up and hoarding them?

In part, yes. One of the main functions of Bitcoin from an economic perspective is as a store of value, it's an inflation protection of sort. This is great for anyone wanting to find a place for very long term savings that will be safe and will hold their value. It's difficult to think about this when the price is so dominated by speculation right now but for the long term this is a big thing for Bitcoin. And if the price is close to $1, there really isn't that much risk in simply buying everything (as long as the fundamentals are still solid).

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If price drops much lower most people are gonna forget about bitcoins and keep an eye out for the next big thing.

No, most speculators would forget about Bitcoins. And for the very long term this might even be good. As long as Bitcoin is functional it'll have a growing support base especially in the radical liberal camp.

What is interesting and I do think this is a bit of a problem, is security. Reliability and functionality are the most important fundamentals besides legality (these are related though) and if the amount of miners decline to low numbers it'll make the network much easier to attack.

So from this perspective I don't really want to see the price go super low even temporarily, because it could be a risk for the whole network. Right now we're still at high hash numbers so it's very safe, but this could change if the price goes super low. But I really doubt it, for example at a price of $1 the whole Bitcoin economy would be worth a maximum of 7 million dollars which is so low of a number that we need a fundamental decline far greater than we've seen so far to justify that number.