[newaccountfool]

'A bitcoin itself has no value except that you can sell it to a sucker for more than you paid for it.'

What value does money have? If you say that money has value because some one accepts it as payment then Bitcoin has value because there are companies that accept it as payment. If the world goes to shit, what can I do with Bitcoin?, Nothing. What can I do with Money?, Nothing.

Does this mean that a 'Tin of Beans' or a 'Tracker Bar' is valuable because we will always be able to use it? No matter what happens to the economy?

[berns]

Fiat money has value because you need it to pay taxes. Bitcoins are only valuable as long as you can convince someone else that they are valuable.

[kylebrown]

> Fiat money has value because you need it to pay taxes.

One needs to pay taxes only because the government enforces tax law. Fiat (in latin) means "by decree", as in "this money has value by government decree." Its value is backed by the government's ability to enforce legal code. (or on a meta-level, by people's belief/faith that law enforcement officers & public employees will succeed in working as agents & beneficiaries of their government). Money by government decree should be called government-fiat.

But the fiat definition of money actually works well for bitcoin too. Except instead of being decreed by government's legal code, bitcoin is decreed by cryptographers' computer code (Lawrence Lessig's slogan that "code is law" was prescient indeed). Its value is backed by the ability of computer code to enforce the information-theoretic laws of cryptography. (or on a meta-level, by people's belief/faith that financiers & tech users will succeed in working to further their interest & investment in a p2p crypto network). Bitcoin is crypto-fiat.

IMNSHO there are two types of fiat money: gov-fiat and crypto-fiat (bitcoin an instance of the latter).

> Bitcoins are only valuable as long as you can convince someone else that they are valuable.

Well it turns out that this is surprisingly easy: you just put your money where your mouth is. Its a simple strategy which has worked exceedingly well for bitcoin, in quite a short time.

[joeclark77]

I didn't say we had already run out of suckers. Just that it's coming and everyone (who can do math) knows that it is so.