I think there will be a time that all the governments around the world trying to ban bitcoin when their paper notes crashes in value exponentially, similar to John Law did to gold during his fiat money Mississippi bubble: Preventing people from using alternative transaction medium to raise the value of fiat money. But eventually everyone will try their best to get bitcoin through private otc trading/localbitcoins/openbazaar, while they quietly watch the collapsing of fiat money

However, currently most of the fiat money are locked inside the bank vault, so there should be some kind of large financial activity to activate those liquidity, most possibly the mass sell of government debt from large bond holders

The fundamental problem with those fiat coin or fed coin: It does not cost anything to create those coins, just numbers typed in a computer, so they should worth nothing when used in exchange

A common misconception is that fiat money is backed by state, it is not, it is only backed by domestic users' acceptance, similar to bitcoin: Bring your domestic currency to another country then immediately only exchange can back its value, without exchange it will worth nothing

The chart is not good, use logarithmic chart will be more practical. And so will bitcoin's price rise at the same pace due to exponentially rising fiat money supply to support that debt

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It's a natural result. It states clearly in swedish law that capital goods are exempt from value added tax

Value added tax is very different from capital gain tax, it is impossible to apply value added tax to any kind of financial transactions due to that most of the financial transactions are making just a couple of percent profit/loss at maximum

The purpose of VAT is to tax the end consumer who benefited from the consumption of products/services, while not touch the manufacturer and retailer. But for financial products there is no end consumer, because financial products will never be consumed, they just change hands again and again

Unlike fiat money, bitcoin seldom needs to be used, it is a value certificate similar to your bank long term saving account, you might only touch it several years later. Or, you can use it to do international trade with much faster payment time (given that you and your business partner in another country have already established a stable business relationship), but the required skill set is too high for average Joe

I'm sure one of the cashes in your wallet has been used for drug dealing or they are stolen, but to reclaim that cash from you, police must be able to provide enough evidence that you have some direct relation with those criminals, so eventually no one cares, simply because it takes too much resource to trace those criminal actions that the police department will simply go bankrupt because of that

Similarly, you can trace the bitcoin that is from criminal source, but you have to provide enough evidence that the receiver has anything to do with those criminals, which is also extremely resource consuming from law enforcement point of view. So unless it is a really large amount of coin involved, no one cares. Of course if it is 100K bitcoins then police might get some incentive to trace it, since their expense will be covered by the auction of those forfeited coins

In today's fiat money system, as you receive money from your customer, unless you are a finance institution which must follow AML/KYC rules, you have no obligation to know the identity of the buyer if it is less than 10K dollar/euro. Then even if you get criminal money flow into your account, law enforcement can not charge you, nor can they forfeit your money because of the transaction. The traceability of fiat money is even higher than bitcoin in today's banking system, but still it does not change the fungibility of fiat money (digital)

All the resources on this planet have already been divided after WWII. To redistribute the resources you either fire another war or take resources from existing owners little by little, which is extremely difficult since the existing owners of resources will most likely make the game rules, and in the end you would still end up with nothing due to that you don't have enough resources from the beginning

It has been known centuries ago that the land lords carefully watch the profitability of their tenants, once those tenants made large amount of profit, they rose the rent so that the profit from those tenants always fell back near interest rate. Only when these land lords were wiped out by a large revolution or war, the wealth could be redistributed

From this perspective, bitcoin is much better, since anyone can be a miner and take resources from exiting owners by charging a fee for transactions. Of course existing coin holders will try to establish large mining farms to make their transaction free, but their cost is always the same as a home miner with cheap/free electricity, so they don't hold large degree of privilege over anyone else

Another very practical benefit for enterprises: If they use bitcoin, the capital flow will not go through banks, this can greatly protect their trade secrets. Nothing is more powerful than invisible

Mining also has another advantage: The coins you get from mining are clean without earlier transaction history

Stopped watching after he laid out the so called 4 properties of money. Those people who learn knowledge of money from books will never understand how money works

Same thing can be said for fiat money, you never know how much money is in circulation and how much money will suddenly enter the interbank market and crash the foreign currency exchange rate, only large banks have an idea. For example, Swiss central bank just crashed some foreign currency dealer and hedge funds by suddenly giving up the peg to Euro.  Bitcoin exchanges are similar to those large banks, they have some kind of first hand information about the money flow

There will be a tipping point

Take fiat money as example, although it is backed by government bonds, which is a promise of paying back with fiat money itself in future, thus have no real value, but as long as everyone believe the value of it, it will automatically maintain its value without any external help, people even desperately seek for it when they don't have it

Similar thing will happen on bitcoin, once a large group of people accept the value of it, it will automatically maintain its value without any help, and a stable value will get more people on board

Blue 

Mining is exactly this kind of reset: Miners have the ability to charge a fee that constantly collect coins from existing holders into their possession, and anyone can easily buy a miner to do that. But you will find out that the cost to redistribute the bitcoin through mining might be higher than just buying them from market, if you don't have free electricity

Supply and demand theory only works in economy books, in reality unless the money reach exchange, it will not have the ability to affect exchange rate. The exchange operator can clearly observe the different reserve level of different currencies, thus roughly make an estimation of the bear/bull market and take actions before every other trader, but even that is not always precise

Notice that when price goes even higher, for example one bitcoin reach 10 million, then I would only need to sell 0.5 bitcoin to get the required fiat money to spend. So, a higher price caused the supply to shrink. Supply demand theory usually applies to products/services, it does not apply to money, because money can be regarded as having unlimited demand. The demand to hold bitcoin can be larger than fiat money when bitcoin price is constantly rising

In a free entry system, the cost will always get close to the product value eventually. As long as there is profit to be made, the cost will keep rising until it get close to price. The important thing is that anyone can participate in the production, not money producer can make money out of nothing, that will be a scam like fiat money

You can do some calculation

Two exchanges A and B opening 1000 bitcoins account in each other, A's account at B will work as a mortgage, if A went down, his account at B will be forfeited, resulting zero loss for B, vice versa. So no trust is needed once a clearing agreement is made. And because the transaction volume between A and B is small relative to each exchange's total volume, the risk involved in each clearing channel is small. This practice has been tested for hundreds of years between financial institutions

Of course you can also go for a blockchain based solution like side chain, so that you don't need to have clearing agreement with each other. Then you will face some technical challenges which requires time and R&D investment, raised level of complexity typically cause the cost to rise, eventually make it more expensive than clearing based solutions

Anyway, in either solution, the key is to make B believe that those deposits to A's account at B is legitimate. However, only A knows if it is true because the original transaction is a customer at A sending coins to B. If A did not send this transaction to B, then the customer will not receive coins at B, regardless if A and B are using clearing based or side chain based solution. So the risk is really concentrated on A and B's business ethic, where side chain can not help at all

In fact, in a clearing based solution, exchange could just use bitcoin blockchain to do the transactions once every 10 minutes. Since each such transaction combines hundreds or thousands of transactions between institutions, they would still greatly reduce the amount of the total transactions in bitcoin network, why use side chain when you can use blockchain to reduce the transaction volume?

Coin holder decide how much money supply there will be in the market, not the bidder. FED has printed 5x more money since 2008, and you never notice anything's price going up by 5x, because banks hold majority of those money and never move them, so they are not entering circulation and will not cause inflation

The reserve holder typically have long term plan than simply profit from selling his reserve. If I have 100 bitcoin and someone offered me $100 million for 100 coins, I would maximum sell 5 bitcoin, since that is enough for me to spend for a while and does not affect the exchange rate too much. Similarly , if Satoshi have 1 million bitcoin and someone offered this price, he might still sell maximum 5 bitcoin, but his reserve's value will raise to 1 trillion

The most significant advantage is its free of entry: Anyone can just buy a miner and start to mine bitcoin, but you can't just buy a printer and start to print fiat money  

Similarly, those blockchains that are privately created by governments, banks or enterprises will not have the free of entry property, so they are far less attractive than bitcoin

Free of entry also means that bitcoin will be continuously redistributed in future (in form of fee paid to future miners) to reduce the effect of early adopter wealth concentration, this is another superior property