Quote from: zby on October 10, 2011, 09:11:45 PM

Quote from: log0s on October 10, 2011, 08:35:14 PM

Money can only emerge in an economy if it is first a directly serviceable good. If something provides no direct service to anyone (meaning it does not provide a direct means to anyone's desired ends, and is therefore not valued by anyone), why would anyone buy it?

Because they think someone else will in turn exchange it for something valuable. This is based on speculation just like with all other kinds of money and it is really the essence of money. The use value of all gold in the world is much less then it's current exchange value - the difference is what makes gold money. Bitcoin does not have use value at all and this is what makes it 'pure money'.

How money emerged naturally is not that important, believing that it can do it only in one way is like people believed that only nature can produce organic matter (http://en.wikipedia.org/wiki/Vitalism) until Friedrich Wöhler synthesised urea.

It's obvious to me that you do not have an adequate understanding of how money emerges.

This book, especially Chapters 1-3, will be a good start: http://mises.org/rothbard/mes.asp

If you really want dig deeper, you can read this book: http://mises.org/resources.aspx?Id=3250&html=1

It is an emergent social phenomenon that arises out of the subjective values of individuals in the economy. To create an "artifical money" would require somehow manipulating the subjective valuations of a huge number of individuals in an economy so that they now value the worthless object enough for it to gain widespread adoption. The only potentially practical way (as the impractical way is to physically alter the brains of people directly) is by communicating false information to them about this object (whether it be convincing them it has some direct serviceableness, or just directly asserting it is a money, or hyping it, or whatever), yet this will almost certainly work for only a short time since more and more people will learn the true nature of this object and realize it's worthlessness, and from then on be less willing to accept it in exchange for something of actual value. Once you cannot convince anyone that a worthless object is valuable to anyone at all, no one will give up something they value for it.

I have found no reason to believe a currency can emerge when it's valuation is based on false information.

I believe this to be what has been happening with Bitcoin (false beliefs of what it is, unfounded assertions that it is a money, hype, communicating the expectation of future high prices, etc). Whether or not Satoshi was intentionally communicating false information about Bitcoin (asserting that it is money) is anyone's guess at this point (I think he, like most people in this day of fiat money, had some misunderstandings of money). Regardless of his intention, his assertion that Bitcoin was a currency back then was incorrect and remains so. As more and more people begin to understand the nature of what bitcoins really are (or aren't) and how that will prevent it from becoming widely adopted and highly marketable, as people become aware of the realities of bitcoin rather than believing the metaphors to be the reality, their valuations of bitcoin will change, and with that change will be a shift in bitcoin prices, and the bubble will go away as bitcoin prices begin to reflect reality for the first time ever.