Bitcoins, gold and pyrite

Bitcoins and gold may have some speculative value but as a solution to economic problems or as a form of money they are on a par with pyrite

As I understand bitcoins their main feature is that the supply of them is intended to be finite.  This will make them great for speculators but as a form of money they come with the same problem as gold and that is that the amount of money in an economy needs to be flexible.  Through history there have been a number of situations where authorities have tried to limit the money, sometimes by trying to force a gold standard, and the result has been serious depression.  I wonder if bitcoins were invented in part because gold is in limited supply.

circleBitcoinProbably the increasing interest in  bitcoins is a psychological reaction to economic uncertainty and fears of hyperinflation which would wipe out the savings and pensions of a lot of people.  Given that the economic crisis is based on problems in the resource base gold and bitcoins may not be useful.  A better hedge would be a market garden.

Another feature of bitcoins is that they can be used online anonymously .  This makes them great for illegal transactions.   No wonder some regulators are saying bitcoins should come under their jurisdiction.

So far as I can see the main use of bitcoins is for speculation.

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