| 1. No, it's not how the gold went out of hands of regular folks. It was threat of prison: http://twitpic.com/c0f5h5 Also, gold is expensive to transport and store, so paper receipts were used instead. But those were warehousing receipts (until the banks started issuing fake receipts), equivalent to gold. So you can't say that the gold lying in a vault does not have value: it has value because of its readiness to be taken out at any moment for a receipt. 2. You think of economic actors as static role players. They are not. When someone starts buying up gold, the price will go up because he would have to overbid everyone else who wants to buy it too. And the more gold you want to buy, the more expensive it will be until something else that you give up will become more precious for you than gold. 3. I'm not interested in Livermorium. If someone is, it's their choice. I'm also not interested much in gold at current prices and risks of storage and transportation. Some other people are. Also, some people are not interested in using Bitcoin while its market is limited and client app sucks. But I'm okay with both. 4. Bitcoin is more useful than just a currency: http://blog.oleganza.com/post/42262765318/direct-use-value-o... 5. Define utility. When people keep bitcoin/gold/usd/eur balance, it has utility for them (otherwise they would sell). The utility is in expectation that you can sell it later, when you know better what you want to buy. There is always uncertainty in the world and people keep some cash to be able to spend it when they know how. 6. The fact that "hoarder" sells his coins is not a logical fallacy. The logical fallacy is a notion of a "hoarder" as a special category. He is just a buyer. He bought some time ago, then circumstances did change and he is willing to sell. Maybe he's selling because he needs to eat. Or travel. Or he expects the price drop. Or whatever. People change their minds and adapt. 7. You suggest that the trade "stops" when people hoard all coins and cannot buy more, right? Then, obviously they are willing to buy more, they just waiting for someone to sell. So when someone for some reason decides to sell, he will find the buyers immediately. 8. "Trade" does not exist as a fluid continuum. It is just a collection of instant exchanges in time. Trade never "stops" or "freezes". The money does not "circulate", it is always-always located on someone's balance. It never "moves". Even if a truck with gold physically "moves", the money already belongs to someone, so it does not matter where exactly the truck is. Therefore, any theory derived from existence of "circulating money" is false from the start. Rothbard on circulation: http://blog.oleganza.com/post/43378777734/on-circulation-of-... |