> Every currency is valuable only because other people consider it to have value.
Two counterarguments:
- the idea of `legal tender' [1]. Usually the physical manifestation (coins and banknotes) of official currency in a given country/region/whatever is also codified by law as legal tender. Which means, when used for settling a debt, the creditor is obliged to accept it. Contrast that with gold, for example: it's considered valuable, but creditors are not required to accept it. Value of legal tender stems from both recognition and the legal framework of it being legal tender.
- taxes. Country's/region's law dictates the currency persons and organizations have to use for settling taxes and other dealings with administration. A currency that people don't trust or use for any other reasons could still have well-understood value in relation to settling taxes.
That having been said, I firmly believe Bitcoin has great potential. Even if this particular implementation fails at some point, other ones will follow.
This idea doesn't work in the country with hyperinflation :) As long as people don't consider that the currency is valuable, no legal force can convince them.
Two counterarguments:
- the idea of `legal tender' [1]. Usually the physical manifestation (coins and banknotes) of official currency in a given country/region/whatever is also codified by law as legal tender. Which means, when used for settling a debt, the creditor is obliged to accept it. Contrast that with gold, for example: it's considered valuable, but creditors are not required to accept it. Value of legal tender stems from both recognition and the legal framework of it being legal tender.
- taxes. Country's/region's law dictates the currency persons and organizations have to use for settling taxes and other dealings with administration. A currency that people don't trust or use for any other reasons could still have well-understood value in relation to settling taxes.
That having been said, I firmly believe Bitcoin has great potential. Even if this particular implementation fails at some point, other ones will follow.
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[1] http://en.wikipedia.org/wiki/Legal_tender