"We need to think deeply about the economic function of money"

[The Sceptical Chymist]

I think bitcoin was the result of some people deeply thinking about the economic function of money.

I agree, and I've also always thought Satoshi Nakamoto is not one person.  Makes sense, since no one can find out who he is.

That’s why bitcoin has a cap of 21 million, as a way to prevent to prevent devaluation.

Yeah, but there can be an unlimited number of cryptocurrencies.  I have to wonder how that's going to affect the crypto market as a whole and their utility as actual currency.  If bitcoin was the only crypto in existence, I'm sure the price would be through the roof right now, but I'm curious as to what's going to happen when even more altcoins are brought to market--and whether something better than bitcoin will ever be created.

It doesn't need to function as a traditional currency because traditional currencies all go to zero and eventually are useless.

But currency as a concept has never been useless.  Sure, individual ones come and go, but every country in the world needs a currency.  I also think the above sentiment tends to get used as propaganda by people pushing precious metals and I tend to just tune it out.  It may very well be that the US dollar, for example, might not die within our lifetimes and perhaps not even the lifetime of our grandchildren.

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[paynercash]

This is an extremely important thing to understand about fiat currencies - none whatsoever has held their value through history. Not a single one. Fiat currency should not be considered to be money because of the fact that it does not store value efficiently.

This is why bitcoin is such an important thing.

It offers people an alternative way to store their wealth, in something decentralised that will hold its value in the long run. Call it a hedge against fiat currency, if you like. Fiat currency has no intrinsic value, and can be added to circulation whenever the central bank/gov wants to. Bitcoin on the other hand is completely decentralised in its supply.

Money naturally has its own functions that are completely different from each other. There are also common currency deals for the world such as dollars, euros, ... They are money that can be traded everywhere. However, in the electronic market we need to distinguish its own functions. It is also a metric to pay for the transaction but its display is just numbers. Cash conversion is the same. But electronic money is faster and more convenient in every transaction.