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Originally Posted by wankawonk
If those are the only two reasons people would use bitcoin, then what's your argument for why people will buy more of it in the future? "Limited supply" only matters insofar as it relates to speculation. "Limited supply" would be great if I could think of a strong reason why people will need/want to buy bitcoin 10 years from now. But the only reasons I can think of are crime and tax evasion--or if your local economy is so fucked/corrupt/dangerous that you need to store value such that your risk is spread globally. But that's a small percentage of the world, and rich people (regardless of location) don't need crypto to store value securely. They can safely park their money anywhere from US real estate to Panamanian shell corps.
That's why I'm into utility tokens, like Videocoin and Ethereum, which carry an intrinsic value: You can exchange them for some form of distributed computing power. Blockchain is an amazing technology that enables decentralized, trustless contract settlement. However, by itself, there's not any inherent use for it. Even fiat has an inherent use/intrinsic value--it's legal tender for all debts private and public. If I owe you money and try to give you fiat to cancel the debt, you legally can't tell me no. If I owe you money, bitcoin is useless if you won't accept it. I have to convert it to fiat.
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Well you bring up several interesting factors. First off, the only people who care about whether something is 'useful" or "works" are the geeks. The average person knows and cares not about the technology. I have no idea how aeronautics works but I know Boeing is a good investment.
This is why Bitcoin is worth 20x or so what Ethereum is worth. That should tell you something. In other words, no one ever went broke underestimating the intelligence of the average person.
Having said all that, 'value" is what we place on it. What you said in the beginning could be applied to gold as well. Gold is just a metal, after all. But it is its' scarcity, difficulty to mine/acquire and shiny brilliance that makes us humans attach value TO IT. It has no inherent value except for certain scientific uses etc.
My point? Once enough people/institutions/governments adopt block chain technology Bitcoin - and perhaps a handful of others - will become "legitimate". In the next decade or so everything will be digital anyway. Crypto will be just another option to pay or investment to buy on an exchange.