Quote:
Originally Posted by srockhard
(Post 19947308)
The rarity of Bitcoin is a strong point because there are only 21,000,000 bitcoins. That is about 1 btc for every 300 people on the earth...compared to gold which there is about 377 million pounds of above ground (and still more below ground) which actually could provide every person on the earth with just under an ounce (about .88 ounce) if my calculations are correct. Combine all that with the fact that it grows everday as an accepted form of payment online and if I'm not mistaken the number of people buying goods online is still growing everyday aswell ;)
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The limited number of them helps in the value, but the value is still determined by the ability to turn the bitcoin into cash.
If there was no way turn bitcoins into cash (of any kind worldwide) than a bitcoin is only worth a bitcoin. The limited amount of them might cause them to still go up in value, but they would only be usable by people who were willing to take them as currency.
The reason you were able to buy a bed from Overstock with bitcoins is because Overstock is likely going to turn those bitcoins into cash. If their only option was to then use those bitcoins elsewhere to buy other products they may not be so willing to take it.
Think of it like a token system. If you ran a store and one day a guy came in and said, "I want to buy these items, but I will pay using these tokens." You might ask him what good the tokens are. "If he said, "You can cash the tokens in at any bank for cash and they go up in value." You may be willing to take the tokens. If he said, "The tokens can be used at other stores to buy stuff, but they have no real cash value." They may not be as appealing to you.
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