Bitcoins may have value for the anonymization, the lack of fees, and the ease of micropayments. It's not essential that a fiat currency is backed by a government, it's just the easiest way to create a fiat currency. Bitcoin right now is essentially backed by those merchants who accept it in exchange for goods and conventional currency. Bitcoins have value RIGHT NOW due to this backing, at least partially. Their long-term value is less clear, of course.
Efficient transactions schemes are not necessarily good stores of value, as Cowen points out; more importantly, if that's primarily where Bitcoin's value is derived from, Bitcoin will be worth zero when a better transaction scheme arrives.
Efficient transactions schemes are not necessarily good stores of value
Yes, but universally accepted scarce tokens are good stores of values. And currently dollars and euro, and almost every other currency are just that. Universally accepted scarce tokens.
And bitcoins are both an efficient transaction scheme and a scarce tokens. And, by design, a lot more scarce. Of course, it has not yet bootstrapped itself, but I see that as a possibility. And damn convenient possibility, too.
Dollars are backed by the full faith and credit of the United States Government, which is why they are universally accepted, and which is why US Treasuries establish the risk-free rate.
Bitcoins are accepted by online gamblers in much the same fashion as casino chips, by ideologues offering marginal services as political statements, and (allegedly) by criminal enterprises.
If bitcoins are mostly interesting to you as a way of reasoning through how economies would work in a world without established governments and economies, that's fine, but could you just say that? Because it's hard to pick out which of your arguments are pie-eyed what-if's.
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Bitcoins may have value for the anonymization, the lack of fees, and the ease of micropayments. It's not essential that a fiat currency is backed by a government, it's just the easiest way to create a fiat currency. Bitcoin right now is essentially backed by those merchants who accept it in exchange for goods and conventional currency. Bitcoins have value RIGHT NOW due to this backing, at least partially. Their long-term value is less clear, of course.
Efficient transactions schemes are not necessarily good stores of value, as Cowen points out; more importantly, if that's primarily where Bitcoin's value is derived from, Bitcoin will be worth zero when a better transaction scheme arrives.
Efficient transactions schemes are not necessarily good stores of value
Yes, but universally accepted scarce tokens are good stores of values. And currently dollars and euro, and almost every other currency are just that. Universally accepted scarce tokens.
And bitcoins are both an efficient transaction scheme and a scarce tokens. And, by design, a lot more scarce. Of course, it has not yet bootstrapped itself, but I see that as a possibility. And damn convenient possibility, too.
Dollars are backed by the full faith and credit of the United States Government, which is why they are universally accepted, and which is why US Treasuries establish the risk-free rate.
Bitcoins are accepted by online gamblers in much the same fashion as casino chips, by ideologues offering marginal services as political statements, and (allegedly) by criminal enterprises.
If bitcoins are mostly interesting to you as a way of reasoning through how economies would work in a world without established governments and economies, that's fine, but could you just say that? Because it's hard to pick out which of your arguments are pie-eyed what-if's.