Both of you are the epitome of the kind of blinkering that I was referring to in my post above.
If bitcoin is to be a currency in and of itself, it's value should not be pegged to ANOTHER CURRENCY!! And an inferior one at that. It
has to be valued based on the hard assets, goods and services that people are willing to exchange for it, just like the USD is today. I am in no way saying that bitcoin is a hard asset. Read my post again, as both of you glaringly failed to understand it.
Like you said cluster2k, gold is priced in USD (and other fiat currencies, but primarily USD because of the global economic hegemony of the United States). We need it to also be priced in bitcoin independently of the bitcoin:usd exchange rate, and the same goes for other hard assets. That can only happen when people trust it as a medium of exchange and have a rough idea of it's purchasing power in their minds i.e. I can buy X loaves of bread with 1btc, or Y gallons of gas, or Z oz's of gold etc. Wide adoption is first necessary for this.
Even the best commodity with a proven track record over thousands of years (gold) is priced in US dollars. Without that metric, how would one buy a piece of gold? What is its value? The exact same is true for bitcoins.
I had to quote this for fear you would go back and edit it out of shame. How would we value gold if it were not priced in USD? Are you
actually serious cluster2k? This illustrates a conspicuous lack of fundamental economic knowledge on your part. Gold used to be the
medium through which other things were bought and sold. Gold has purchasing power and intrinsic value not
because of the fact it is priced in usd, but actually
in spite of it! It used to be the other way round you silly person, the USD itself only had value in the first instance
because it was pegged to the value of gold. And the value of gold comes from the reliable forces of supply and demand. The supply is very low, while the demand is extremely high. That is why it has purchasing power.
Yes bitcoin will inevitably be compared to other currencies by speculators, but without any hard assets in the bitcoin economy i.e. people willing to exchange these assets for bitcoin, it is a pointless comparison. YES there are 'real' costs associated with any bitcoin business that needs to be currently paid for in fiat, but they don't
have to be paid for in fiat. Once people are willing for these costs to be paid for in bitcoin, then the exchange of bitcoin for fiat will not be necessary. This is why it is so crucial that we begin to offer goods and services in exchange for bitcoin, independently of a manipulated exchange rate.
Then, and
only then, will bitcoin be a currency proper. As it stands now, the bitcoin economy is FAR too heavily reliant on fiat exchange services. It is almost akin to getting paid in USD for your goods or services, but having to pay all of your costs in cheese wheels that must be purchased by trading your USD for cheese on an usd:cheese exchange. Until businesses can pay other businesses in bitcoin for the majority of their expenses, it can only be a speculative trading vehicle with some very limited utility as a currency.
