I will concede that electricity and internet access is a requirement for BitCoins. However, only the merchants need these things since the consumers can utilize mechanisms similar to credit cards and banks for the day to day transactions if they desire or don’t have the resources to manage their own digital wallet. I will admit that my current argument for BitCoins taking off is dependent on a first world infrastructure so let’s use that as the context for our discussion.
I think it was earlier in this thread that it was established that BitCoins follow the regression theorem. The proposed currency does not need to have uniform value to all of it’s potential users, it only needs to have value to some subset of it’s users, the seed population. As I mentioned in the example using apples as currency, not everyone has to value apples for their commodity value. Only someone has to value apples for their commodity value in order for the regression theorem to hold true. In the case of BitCoins, there are people who value BitCoins for whatever reason so it meets the requirements for the regression theorem.
As seen by fiat currencies and as addressed by Mises, once a currency is established as money it no longer needs to have commodity value to it’s users. It only needs to have a history of use that, as explained by the regression theorem, eventually leads back to the seed population’s initial valuation.
It sounds like you don’t agree with me on this point:
every person on the planet has a certain “collection size” (number of goods/services available in a given currency) required for them to be willing to participate in that currency
If everyone in the world except you used bottle caps as currency, would you begin to use them as currency as well? If the answer is yes then that means you have a collection size somewhere less than the world population. My guess is if two people in the world didn’t use bottle caps you still would use them. I don’t know where your personal line in the sand is drawn at, I am just suggesting that almost everyone has a threshold.
I believe that the number of people that will boycott a currency just for philosophical reasons is low. The reason for this belief is due to the current fiat money system. People use fiat money even though many of them understand it is terribly flawed. I use USD as a medium of exchange even though philosophically I disagree with the entire concept. Because it is accepted in enough places, I utilize it. The same can be seen with Visa/Mastercard. They are accepted in enough places that I will choose them over something like American Express or Discover even though American Express and Discover may offer lower rates, better rewards, etc. When it comes to currency, popularity matters.
Many people have American Express/Discover along side their Visa/MasterCards because they prefer the former when available but they will use the latter when necessary. The same can occur with BitCoin where you may have some BitCoins and some USD and you will use BitCoin where possible but USD when necessary.
Because gold, silver, stocks, etc. do not offer security, remote transactions, anonymity and distribution simultaneously. It is my belief that this is why those currencies have not beaten out fiat currencies to date, they do not offer those four attributes simultaneously.
80% of your wealth may be backed by gold and silver but my guess is that 80% of your daily transactions (grocery store, rent, utilities, movie tickets, luxury goods, airline travel, etc.) are not done in gold/silver. BitCoin can be your medium of exchange while you still use commodities as your store of value; this is not incompatible with BitCoins becoming a popular currency.
People would withdraw their holdings in commodities in exchange for BitCoins for the same reason I am guessing you do with USD, EUR or whatever currency your locality uses. To make day to day purchases like food, cloths, house, cars, etc.