You've got it. What I don't understand is why nuclear electricity is put in the same basket as coal and gas plants. The incidents that Nuclear has gone through in the past 60 years only reinforce my view that it's a safe solution. If given all the fsck-ups that gave us Chernobyl, Fukushima and 3 Mile Island that's all that happened I think that it's pretty much OK. I'm saying this because coal/thermal have their exhaust pipe problems which affect a much greater percent of the population and hydro is in general an ecological mess that also involves massive population relocation.

Aren't they starting at the wrong end of the food chain? Or have they already verified that all the organisms on which livestock depend will be able to survive?

They are more difficult to forge than physical commodities. My assumption (which I've adjusted due to other comments) is that this represents intrinsic value. My corrected assumption is that this represents a market value, and that intrinsic value is irrelevant for a currency.

You make a good point. I guess my question then is, why would anyone *want* to give something being used primarily as a currency some intrinsic value when the currency we've been using for decades (centuries?) has none, and probably works best that way? Isn't the whole point of a currency to represent a market value and nothing else?

Well, in the context of having something to "back the value" of a currency, that seems to be what's important because "the gold standard" is the gold standard of backing value, and I don't see how gold has any value that bitcoin doesn't in this regard. It's the limited quantity that gives it value (the ability to use something as a currency makes it valuable as a currency). The only thing that bitcoin is missing that gold has is the ability to melt it and wear it on your finger or neck. That might be the "value" of gold that bitcoin doesn't have. But when you look at all the gold sitting in Fort Knox, do you really think it (at one time) was functioning as a backing for currency because it was able to be turned into jewelry? I think it functions as a backing because of its scarcity, and its ability to be turned into coins (currency), not because of its intrinsic value as jewelry.

Bitcoin has more intrinsic value than stocks because because it's a limited resource whereas stocks can split and reverse split and are available at the whim of the company offering them. The Bitcoin supply is less volatile. The demand may be volatile, but the supply is quite predictable. Trying to back bitcoin with stocks and peg it to something sounds like nonsense to me. How do you peg something that's already pegged to a pre-determined supply. Bitcoin is every bit as "pegged" as gold as far as I can see.

That view is way oversimplified and completely ignores how our evolving society has changed the rules. If Internet and phones disappeared tomorrow, people would likely start dying in much greater numbers in the not-too-distant future. We now depend heavily on this sort of communication to know where food and water needs to be. People don't live near sources of food and water any more because they don't need to any more because other technologies have sprung up to make it possible to survive without doing so. If those go away, so do the people.

I can sure see the confusion. I can't see any difference between "hacker" and "hacker" myself. What am I missing?

That's kind of what I was going for -- the weakest analogy that was still applicable just to demonstrate how widely applicable the point is about one merchant not being representative of the whole industry.

It's not over yet. I had bought a total of about 20 bitcoins for a total of about $600. After the price went up, I sold 2 of them and got all my money back (in my own bank). Now I may have lost 13 of them on MtGox, but that still leaves me with enough in my cold storage wallet and on my mobile device to get 2 to 3 gaming desktops from bitcoinshop.us at no out-of-pocket cost to me.

And who knows, if by some miracle MtGox doesn't simply lose everything they were holding for everyone, I might even still have enough to buy about 10... at no out-of-pocket cost to me. Doesn't sound like such a bad idea either way.

I didn't say debeers group, I said the neighborhood jewelry store.

I can't quite tell if you're being ironic but I found your point confusing. I think we're both saying that bitcoins are worth more than monopoly money. But when you say that Monopoly money is worth more than diamonds I'm lost. You didn't spend Monopoly money, you spent bitcoins. I can't even tell if you're agreeing with me or not.

I could ask if you'd call dollars worthless when a US big bank fails. But we all know big US banks are too big to fail :). Seriously, though, I didn't want to use a bank analogy because it was too obvious with too many parallels to be drawn. Usually that's a mark of a good analogy, but in this case I'm trying to avoid dragging in a multitude of parallel analogies. The point was to focus on a very simple and broad aspect of the suggestion: that one merchant represents the industry without specifically talking about currency or banking or exchanges. Regardless of whether you're talking about currency or any goods, why would one *generally* suggest that the value of a merchant's goods go to nothing universally when only a single merchant is failing? Just to point out how widely applicable (or ridiculous) the notion is, I chose something as different as possible.

Good luck paying for a $6,000 - $10,000 diamond in Monopoly money, though :)

Still, they're worth more than Monopoly money.