Originally Posted by Zorba
Why would anyone bother with putting real money into pretend money, who will you go to if whoever decides to not honour it.
Who will go to use US dollars if people decide to not honour it ?
When a commodity (like salt, furs, diamonds, gold, etc.) becomes "money" ?
What are the main functions of money ? What are the main properties of money ?
BitCoin became a currency, because a lot of people TRUST in it. TRUST is the basic factor that decides what is money and what is not.
A commodity becomes money, when: 1. it is relatively scarce and thus expensive, 2. it is difficult to counterfeit, 3. it does not spoil over long enough period of time.
The main properties of money: it is used as a means of exchange, it is used to store value in time, and it is used to accumulate wealth.
BitCoin is even better than US dollar, because its supply is fixed !!! /governments or central banks may decide to print more money, which triggers inflation and big crises.
BitCoin supply is fixed. BitCoins cannot increase to more than the encoded total number.
BitCoins are expensive, impossible to counterfeit, they do not spoil over time, and they have the trust of the users.
BitCoins can be used as means of exchange, they can store value in time and they can serve to accumulate wealth.
So, they have all traits and functions of a normal currency.