Sorry, but I feel you folks are zig zagging all over the place.

Quote Originally Posted by kib View Post
The thing is, the number of dollars, euros etc. are not at all limited by the creation of actual wealth.
So have we moved on from the whole values based currency to a discussion of value based currency? The relationship between the money supply and economic growth is a known, if not fully understood issue. But I don't think bitcoin or barter certificates are the answer.



Quote Originally Posted by Xmac View Post
There is a misconception that money needs to be a store of tangible value. This country had a successful fiat system before the Revolutionary War for a long time because it was responsibly controlled in relationship to goods and services, no inflation and no boom busts (which do not occur naturally in healthy economies). Its value was usage level and trust in the issuer(s).

Kib is exactly right, Yossarian, about the currency being used today. We haven't had substance redeemable currency for many decades

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There is no such thing as "intrinsic" value. What is abundantly available and needed has no value, even if it is food. That which is limited/scarce and desired is what gives a thing value. Bitcoin has that feature also. It is deflationary.

What determines value is not a government or old ideas of value about things like gold. Value is determined by demand/scarcity and a currency is determined by the level of usage, no matter what any one says.
Yes, that is my point. So far most people are willing to hold dollars or euros because the convention is steady and supply and demand have been roughly equal. The real value of what I can exchange my dollars for when I defer my purchase and hold dollars over time is acceptable. The dollar stores the value of my labor generated at time A and lets me buy goods or services later at time B at acceptable levels. What's not to like? I don't see how you can promote a currency that doesn't store value.

There is a risk that could change in the future. None of this convinces me local exchange certificates or bitcoin will solve the worlds problems.