[kwis]

> but that is to be expected with any new currency.

I think the problem is somewhat unique to unbacked currencies. BTC has value solely because some people agree that BTC has value. It can go to zero (and stay there) for any reason.

The value has no minimum that can be defined by looking at the industrial value of a commodity (as with commodity monies). Nor is there a minimum that can be determined by comparing the money supply to the underlying productivity of a nation whose residents are required, by law, to use the money (as with fiat monies).

As an aside, if I wanted to setup competing currencies, I'd create a brokerage that allows the cheap, easy, instant transfer of ownership of fractional securities from one member to another. Then we'd have tens of thousands of competing currencies, all of which are backed by a combination of assets and productive capacity. Entrepreneurs could even setup companies designed solely to work as currencies.

I know that wouldn't appeal to those who care primarily about traceability, but frankly, I don't foresee any government allowing the widespread adoption of any mechanism that allows for untraceable transfers of large sums of money.