[0x6763]

"Bitcoins are a creation by some who don't understand what a currency is."

How ironic that someone would say such a thing, and then immediately post a few paragraphs displaying their own misunderstandings of what a currency is.

Do you know what a "hard money" is? Bitcoin is a digital hard money.

You talk so much about backing...backing is nonsense. Gold isn't backed by anything. It's just matter, like everything else. The value of that specific form of matter is in the eye of the beholder. Lookup the Subjective Theory of Value. Then go to http://mises.org

[jerf]

Gold is backed by being gold. It also isn't a currency anymore; the properties necessary to be a currency are no longer true of it. Wire me some gold, please. Not some numbers that are actually disguised dollars, some actual gold.

I'm not a goldbug precisely because I don't think gold is worth anywhere near what people think it is. The "durable value" it had in the decoration field is gone. If it were ever actually put to the test it would collapse to a much lower value reflecting its actual industrial and decorative values which are nothing like what they used to be.

The subjectivity of value is why backing is so important if your currency isn't to collapse. Something's got to stop the subjective system from just deciding the value is 0, aka, hyperinflation. Or, more accurately, realizing the value is zero.

It's easy to wave some academic theories around and act intellectually superior, but call me when you've actually got a functional currency that corresponds to what you claim is possible and even remotely resembles the real world market size of even Microsoft Points or Eve Online's currency. BitCoin is not it, and it won't ever be it.

[0x6763]

It also isn't a currency anymore;

This isn't the result of free markets, but a result of the actions of violent institutions.

The "durable value" it had in the decoration field is gone. The durability isn't a matter of decoration. The durability matters most in that it's not going to rot/rust away, so that an ounce of gold remains and ounce of gold rather than turning into half an ounce of gold.

If it were ever actually put to the test it would collapse to a much lower value reflecting its actual industrial and decorative values which are nothing like what they used to be.

You're forgetting it's value for trading and as a good store of value, which are most like among the biggest reasons it is valued by most people.

The subjectivity of value is why backing is so important if your currency isn't to collapse. Something's got to stop the subjective system from just deciding the value is 0, aka, hyperinflation. Or, more accurately, realizing the value is zero.

The "backing" is also subjectively valued...everything that is valued is valued subjectively. The universe doesn't set some standard value for things that humans are supposed to agree with.

but call me when you've actually got a functional currency that corresponds to what you claim is possible and even remotely resembles the real world market size of even Microsoft Points or Eve Online's currency. BitCoin is not it, and it won't ever be it.

Bitcoin just started as a grassroots project that is growing and growing quickly. You'll be hearing more news about it's further successes, I'm sure. Maybe after a few years of watching it grow, you'll decide you're ready for it.

[icarus_drowning]

Another interesting look at the psychological theory of money on a recent This American Life:

http://www.thisamericanlife.org/radio-archives/episode/423/t...

In particular, the section from about 10:30 discusses how Brazil combatted inflation by essentially replacing their currency with something that everyone agreed was valuable.

[zohebv]

> Then go to http://mises.org

You lost me here. Thats the favorite website of Internet economists. It is unable to explain real economic/business cycles.