Why do people go crazy for Bitcoin?

Issue #4

Harry Glynn

I'm sure you've noticed it. An almost cult-like following for cryptocurrencies that I'm sure is perplexing.

An e-currency that isn't backed by anything? Weird

It largely has to do with the properties of money. We think of dollars as money and that's it, but history is littered with many different kinds of money, some better than others.

Gold is a typical example and throughout history, the world has largely agreed it's valuable.

That's because it has properties we typically associate with good money. 

These properties are: durability, divisibility, portability, limited supply, fungibility, and acceptability. 

Gold is metal so it's durable, it can be melted down so it's divisible, you can carry it with you so it's portable, it's hard to make more so it's limited, 1 bar of gold is the same as any other so it's fungible, and you can find someone to accept gold in any country in the world. 

For these reasons you can say gold makes good money. 

Paper money has largely replaced gold because it improves on all these metrics except for limited supply. 

People love Bitcoin because they think it's a further improvement, particularly transferability and limited supply.

It's digital so it's easy to divide, you send Bitcoin using a passcode so ownership = information which is infinitely durable, it moves over the internet so it's easily transferred, the supply is controlled by software so it's limited and fixed, and 1 BTC is as good as any other so it's fungible.

The thing that BTC is worst at is acceptability. Proponents think that's temporary and to be fair is probably the easiest parameter to overcome.

Since it has all these great qualities people think its takeover of the world monetary system is inevitable. I'm not so optimistic but that's why people love it so much.