Why I’m Putting All My Savings Into Bitcoin - Falkvinge on Infopolicy

#Bitcoin is a new kind of currency that can’t be seized or frozen by governments. #tegenlicht

I have major disagreement on the value of bitcoin you infer in your post. The value of currency is not determined by how much is pumped into it. People are buying / exchanging bitcoin for 1 milion USD or so per day. But the value doesn’t rise with every exchange. The fundamental value of currency is determined by the size of economy which is transfered by means of it. Take monetary agregate M3 of any country and divide it by GDP, You should get a number between 1 and 2 or something like that. Now if you make an assumption about future size of bitcoin economy, you can say that the value of all bitcoin is of the same order. The resulting value of bitcoin is probably the same as you got, but the reason is different: it is the value of exchanged good that give fundamental value to currency not the fact that somebody speculatively buys for a lot of money. The force behind the f...

Full article: http://falkvinge.net/2011/05/29/why-im-putting-all-my-sav...