Reply to post: Re: In short, Bitcoin is structurally incapable of operating as a mainstream currency.

Don't panic, but your Bitcoins may just vanish into the ether next month

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Re: In short, Bitcoin is structurally incapable of operating as a mainstream currency.

There's only so much Gold/Silver/Diamonds/Oil/Whatever on planet Earth.

Yes, you can disconnect a currency from such shibboleths. But then everybody has to have faith in it's worth, which is a bit too close to religion for my liking.

The thing is, rarity does not make something inherently valuable, and it certainly doesn't make it inherently stable in value. There has to be a market for it. And none of the things you mention are inherently stable in value.

The price of oil varies over a wide range based on supply and demand.

Diamonds are controlled by a cartel; if it were ever broken up, the price would crash overnight. There aren't even a lot of uses for natural diamond. It's only valuable because we've been trained to believe it is by TV ads.

And there's nothing magic about gold. People sometimes act like it's a fixed, inflation-proof store of value, but it isn't really; it's subject to supply and demand like anything else. Basing your currency on gold just means that instead of having technocrats in government set the value, you're allowing the value to be set by guys with shovels.

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