My original problem with the regression theorem was that it didn’t hold up in all cases and I provided some example scenarios where that was true. However, after some discussion on these forums it was determined that these scenarios actually do match the regression theorem as long as you don’t define “value” too narrowly.
A commodity, as far as the regression theorem goes, does not necessarily need to have consumable value and it does not need to have value to everyone. A commodity only needs to be valuable to someone and for any reason (consumable or not). Traditionally we look at gold as a commodity of value through it’s use as a consumable luxury good (jewelry). The key here isn’t that it’s valuable for a specific reason but just rather that someone values it. Even people who aren’t interested in gold for it’s jewelry value can use it as a medium of exchange because someone else values it for a reason besides a medium of exchange.
BitCoins meet this requirement as well, just in a different way than gold. BitCoins have value to some individuals and the reason it is valuable to them is of no consequence. If you take the praexeology position on this matter what we can see is that some humans value gold and some humans value BitCoins. Trying to analyze why they value it goes against praexeology. Humans value them both and that’s all that matters.
When it comes to building a currency the regression theorem asserts that someone has to value it at some point in history for non-exchange reasons. The regression theorem does not specify why they value it, only that they do. Since we can see that some people value BitCoins currently we can draw the conclusion that BitCoins meet the requirements of the regression theorem and can follow the path as described by Mises to becoming a popular medium of exchange.
Obviously, not everything with value will become a popular medium of exchange because it is the nature of a medium of exchange to gravitate toward a single most useful medium rather than spreading out across several mediums. There are situations of course where one medium of exchange has a desired property yet lacks a different desired property while another medium of exchange has the inverse state which is why we sometimes see multiple mediums of exchange in use.
I believe that BitCoins provide a number of attributes that make it a competitive medium of exchange. It does lack a consumable use like traditional commodity backed currencies provide and this may result in it’s inability to become a prominent medium of exchange. However, that is a decision for the market to make whether lack of traditional commodity backing is enough to stop the growth of the BitCoin market or not and not something you or I can accurately predict.