Is BitCoin the currency of the future?

[filc]

@bill_h

Here is an idea about how a gold backed “Bitcoin” might work.

1. A well known/respected vault may publish the quantity of their reserves in a public manner and have a well respected audit company(s) confirm the claim.
2. Once it’s clear to the market how much gold the company has it could sell their own brand of “bitcoins” redeamable for it’s gold reserves.
3. Assuming the companies bitcoin share the same public trading feature of the current bitcoin anyone can verify that the company has not issued more bitcoins than it has in actual gold.
4. To make money the issuing company would specific a decay rate for the “bitcoins” at their time of purchase. i.e. every month the amount of gold the “bitcoins” could be redeemed for would decrease. The company would use the the gains from this decay to fund its operations.
5. Multiple companies could compete by having the best audit companies, placing their reserves in locations most defensible from government/other pilage, and having the lowest decay rate.

What do you guys think?

I’m still not convinced that bitcoins will not be viable. I’ll happily let the market decide their future, though. While baseball cards and bitcoins may both have collectors value bitcoins have many features that baseball cards don’t have which make it more interesting than baseball cards as a medium of exchange such as those listed by Micah. Baseball cards are simply not divisible or uniform, and they cannot be exchanged electronically which make them a unsuitable for use as money. Imagine if gold was originally marketable but neither divisible nor uniform would we still use it as a currency today?

This is a great start Bill. Check out a similar response I had here.