Quote from: fimp on June 20, 2012, 09:33:12 PM

Quote from: michaelsuede on June 20, 2012, 09:26:37 PM

Similarly, gold's "backing" stems from its scarcity, and other physical properties, that make it suitable to act as a money.

That's true for most of the value of gold, but a small amount of the value of gold stems from its use in industry and jewelry. This "instrinsic" value is what economists and gold bugs point to as the reason gold can be trusted. Bitcoin can emulate this by creating such an organization as proposed.

Bitcoin has "intrinsic" value as well (actually, there is no such thing as intrinsic value because all value is subjective to each person engaging in any given trade). Bitcoin's "intrinsic" value stems from the properties it possesses which allow it to act as a money. If Bitcoin did not have the properties it does, no one would voluntarily trade real goods for it. Similarly, if paper currencies were not violently imposed or if paper currencies were not backed by some physical commodity, no one would accept them in exchange for real goods.

While gold can be used for jewelry, its use as a money has nothing to do with this at all. Gold would still be a good money even if it was horribly ugly to look at. The key properties that make up a good money are:

-scarcity
-divisibility
-recognizability (easy to identify, hard to counterfeit, easy to verify)
-ease of transport/storage

How pretty something is doesn't make the list.