i am very bullish on bitcoin, i am not saying it has to be backed by silver, just pointing out that they have similar characteristics. both seem a good place to store value, and if your investment is split beetween these two options you are hedging your bets whatever the outcome.
If bitcoin is a roaring success and the dollar dives silver will still be worth loads in bit coin as it is consumed in all those electronics in a good economy.
if bitcoin fails and we do have a massive depression silver will have more use and purchasing power than gold.
Gold has no use and it is horded, therefore there is lots of it now above ground.
there is less silver above ground than there is gold, as it has mostly been consumed.
therefore silver would be worth more than gold if the price was not artificially manipulated down by the market makers dumping silver paper.
when these guys are exposed, silver will return to its true value as expressed in food, land, or homes to live in ....not usd.
I don't think it is too far out of the box to say bitcoin will meet parity with 1 oz of silver.
and a usd will be equal to some micro of a bitcoin or something very similar like www.witcoin.com
imagine what this system would be like if facebook rewarded everyone a micro payment for the valuable information they enter and started facecoin.
that would be the end of bitcoin, but i would still have my silver to buy facecoin with.
they are and they aren't similar. both are good stores of value. but silver can only be spent locally in a face to face transaction. btc can be transmitted around the world in a flash. the closest real world example to btc that i could find is m-pesa in Kenya. its smartphone money controlled by the mobile operators to the exclusion of banks and cc operators. the adoption rate has been exponential b/c the father of a Kenyan family working on one side of the country can SMS his earnings to his family on the other side of the country. he used to have to ride a donkey across the country to hand deliver the money or pay a trusted courier which often resulted in his money being stolen. the ability to transact across long distances is crucial to the success of future money. Huwala is another example of moving money long distances and depends on trust. where the trust factor of transporting btc to a merchant in exchange for goods can potentially result in fraud, i don't think it will be as big an issue as everyone thinks. with services as WOT i think most txs will be honored w/o problems b/c any self respecting business wants to be successful and grow. most ppl realize that fraud is a dead end. an interesting phenomenon that i am noticing in these days of hard times is that merchants are bending over backwards to be helpful to me. i have numerous times taken back merchandise to Best Buy, Apple, or Home Depot w/o a receipt and they have honored the return or cash back w/o any hassle. my business vendors have been cooperative in reducing rates on my request. once businesses like these realize they can dump the 4% cc fees on every tx, they will embrace btc IMHO. another advantage of btc is its divisibility and scalability. how are you going to pay for a loaf of bread with a silver eagle?