Indeed. So long as there is sufficient demand for gold it has value. If that demand reduced (for example because of a loss of confidence), the value would reduce, which was kind of my point. Perhaps the demand for gold will continue, or will even grow strongly; perhaps it will decline, or collapse. We can each form our own opinions about that. Just as we form our opinions about the future values of currencies, or property, or commodities. It is the notion that the value of gold is magically fixed and immutable which is the illusion here.
So how do those that control BitCoins convert it to hard cash (or whatever commodity is in great demand and has "value") and make millions?
It floats against other currencies / assets. What does it matter if you and I chose to use it because we believe in it ?
Go ahead. Feel free to hold all your assets in the form of bitcoins, if you so choose. Or lottery tickets. Or Zimbabwean dollars. Or shares in the South Seas Company. If you lose your shirt, just don't bother complaining about it, or claiming compensation.
They find suckers prepared to give them real money in exchange for bitcoins. And there's never been a shortage of suckers.
I'd like to believe my 9 year old 999 is worth £20k Unfortunately, to make a market, you need a lot of other people to believe the same thing. The bitcoin believers are still a bit thin on the ground. And most of them are probably drugs dealers and arms smugglers.
