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Old 03-30-2013, 05:48 PM   #12
Prodigal19
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Join Date: Aug 2005
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Quote:
Originally Posted by Fedaykin View Post
There is a difference between a fiat currency, which at least represents a nominal value within a national economy, and a completely unbacked virtual currency.

The USD can plummet if the U.S. economy gets screwed up badly. The Bitcoin value will plummet simply when the fad is over -- or if the Bitcoin system is compromised enough (which has already happened several times).
You can just as easily say that gold and silver are unbacked currencies. Neither have much of an intrinsic value. It doesn't stop people from investing in them. At least bitcoins can easily be traded.

The bitcoin system itself has not been compromised, exchanges and websites that deal with bitcoins have. This is why it is dumb to have an online wallet. This problem alone will not cause the downfall of the bitcoin.

There is no reason to believe that this "fad" will end any time soon. As long as people think the bitcoin has a reasonable chance to be an alternative currency it will have value and as long as it has value it will be an investment opportunity. Even if its value were to drop drastically tomorrow, it would recover most if not all of that value extremely quickly as people jump in to buy cheap bitcoins.

The thing that probably will result in the death of the bitcoin is some governments decisions to make them illegal. I believe we still have a ways to go before that happens though.
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