Quote from: Peter R on March 28, 2014, 03:41:18 PM

Quote from: Zapffe on March 28, 2014, 03:38:25 PM

Reserve demand can only hold up for so long.

This is true. Reserve demand for gold has only held up for several thousands of years. Our high-technology and globally-interconnected economy appears to now be shifting reserve demand to digital assets: https://bitcointalk.org/index.php?topic=68655.0

The special thing about money is that there is only reserve demand. Pure money like bitcoin, you can not use them for anything. You can not consume them, you can not squeeze out the energy used to create them. If you have bitcoin and want to consume something, like food, you have to sell your bitcoins for food. The reason why this reserve demand exist, and why everybody wants money, is the superior sellability of the stuff. This is the same for all money, you can always sell them. The reason why some things become money and other things not, is the 10 or so specific qualities people look for in a stuff they don't want to use, but just hold for a short or long time, then trade because it is immediately tradeable for anything. Reserve demand equals money value.