[edblarney]

"Competing cryptocurrencies won't be spendable on the Bitcoin block chain and vice versa, so Bitcoin's scarcity isn't compromised."

Because bitcoin is not backed by any assets, anyone could come along an invent something like bitcoin, claim it has value, and disrupt it.

So it's maybe the wrong wording for the argument, but the underlying premise - the actual underlying weakness of bitcoin as an asset, is the argument.

USD's are backed by TBills, Euros are backed by pretty good quality assets. I understand it's not like you can go and exchange your Euros for landholdings or gold, but there is integrity in that system.

Bitcoin is just an idea, worth whatever a group of random people decide it's worth, which makes it highly volatile and risky.

The USD will not go do 0 tommorow - its's needed for many things. Bitcoin could go to 0 tommorow.

[baddox]

Bitcoin isn't backed by any assets. Bitcoins ARE assets. They don't have value because someone just came along and claimed they do (try to start your own Bitcoin clone and see how much people will buy them for). They have value because people are willing to trade for them, and there are many potential reasons for that (some less reassuring than others).

[edblarney]

Bitcoin is really not an asset by any stretch.

"They don't have value because someone just came along and claimed they do" - that's exactly why they have value - because a bunch of people arbitrarily believe they have value.

There are zero currencies which survive on this basis.

All major currencies exist because they are the medium of exchange in some economy - and/or they are backed by something tangible: in the US it's government debt, in Europe by other assets.

In China it's a little more fantastic, but the currency has about as much trust as one can have in their government - meaning, it's sketchy, but it's not going to 0 overnight.

Bitcoin could be worth 0 tommorow if people lose interest, vendors stop caring - which could happen - after all, what is the underlying impetus to keep pricing momentum? Is there demand on Bitcoin for people to pay taxes? Nope. To buy other products and services? Nope. As a 'store of value'. Nope.

Really - the only value might be to 'hide from paying taxes' or to 'hide from authorities' - which admittedly has value to some people, but I'm not sure if it's enough to keep it afloat.