[dragonwriter]

> Bitcoin doesn't need credibility. It just needs to work.

What currencies need to work, more than anything else, is for people to believe they will work -- i.e., credibility.

That's what, ultimately, discussions of supposedly "intrinsic" value (which are somewhat dubious taken literally, value is, arguably, inherently extrinsic) of commodity currency and the reliability of the particular governments backing fiat currencies are about -- credibility. Because, ultimately, a currency like anything else is worth exactly what people are convinced that its worth.

[jwesley]

Fair enough, I see your point and completely agree that all currencies are based on belief. I guess that why I am all over the internet all day long trying to convince bitcoin is worth a shot.

[bmelton]

It's kind of naive to say that currencies are entirely based on belief, and I think you had it more right with your initial statement.

The only big distinction between the US Dollar and Bitcoin, from a practical perspective, is that Bitcoin doesn't have any armies willing to defend its status as legal tender. Even if everybody stopped 'believing' in the dollar, its buying power might tank, but it's still legally required to be accepted as payment for all debts, public and private. That legality is implemented through force of law, not good natured belief.