I posted this in my page in Quora.com
It is Quora who introduced me to the world of Bitcoin and even now I am not fully familiarised with it. Mr. Faisal, I observe from his posts, is a great fan of Bitcoin and other digital currencies.
I have been reading lot of posts for and against bit coins. Some States of US, I understand are on the verge of providing legality. My thoughts on the Bitcoin Ecosystem are :
From time immemorial, money was something that had some intrinsic value. It gave birth on the necessity of standardisation, but was always based on tangible assets. The necessity of economic opportunities, led to the fall of gold standard, but still money is based on some tangible ( or intangible?) promises by a central and accepted authority. Value of such money centres around demand and supply with additional factors logged in. But still it has or had a basis. Does not the bit coin, if to be called as money, should be based on something tangible. Does it have a base. There can be an argument that the intellectual property which creates the digital currency can form as a basis, then how to value that intellectual property. Is it prudent to create a standard out of nothing?
The international trade is progressing, besides the other factors, mainly on the incentive of different valuation for different currencies. By adopting a uniform currency, will it hamper the international trade ?
Assuming a scenario, that different countries recognise different digital currencies, is it not a replacement of the existing printed notes, without any central authority, by a different name?
Having understood that generation of bit coins is more a mathematical and technical algorithm, will it stand the test of availability of digital currencies as and when needed? ( remember the logic of abolishing the gold standard)
Is Bit coin or digital currency is another hype of the silicon valley?
