[vellum]

It's more a testament to high demand than long term viability. In addition to the other things mentioned in this thread, Bitcoin lets you evade oppressive currency controls.

For example, Argentina's real inflation rate is around 18-25%. Because of that, they've taken drastic measures to prevent their citizens from transferring money out of the country.

Here's one guy’s story of using a Bitcoin mailing list to buy pesos at a 25% better exchange rate, due to number of Argentines who wanted to offload their pesos: http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollar...

As the Euro crisis deepens, and the chances of one or more countries leaving the Euro gets higher, we should see a spike in Bitcoin prices. For example, if Greece was about to leave the Euro, they'd have to impose draconian currency controls, because everyone's bank deposits would be devalued overnight.

[derringer]

You speak of this as though it is a inherently bad thing to have centralized control. I'm as techno-libertarian as the next HN user, but I know that when the market riegns completely free there is a non-trivial chance that boons can swiftly turn into depressions.

There is a reason the Greek government will impose draconian currency controls. It is for the benefit of the Greek people, so their savings accounts will only drop 50% rather than 80-90%.

A purely decentralized currency may be the way of the future, but it will be replacing old problems with new ones. Whether it is ultimately better is anyones' guess.

[wslh]

For sure, the Argentinian Government measures are not for the benefit of the Argentinian people.

[derringer]

Please enlighten me. I know the story of how Argentina wound up in the situation of needing to prop up their currency. It's an old story, the same as Greece's except for the ending which is uncertain. The government went into massive debt mostly for public works projects (yes, for the people of Argentina), but when the debt came due, the people of Argentina voted to default. Now all future governments have to try to clean up this mess. Is there corruption? Absolutely. But that is only tangential to the real problem.

1) http://www.npr.org/blogs/money/2011/10/14/141365144/friday-p...

2) http://www.economist.com/blogs/americasview/2011/11/argentin...