Source: http://www.juandemariana.org/comentario/6464/analisis/economico/basico/bitcoin/ii/
In short, to provide value to BTCs are being forced to computers consume processing power on useless things , which perfectly recalls that old story that during the New Deal was hired workers to make and fill holes .
But then, as is well known to economists, the value of goods not depends on the cost of their production . As much as it costs me my bike up the Alpe d' Huez, nobody is going to sponsor the trip: the value of this effort of mine is unfortunately zero for most of the world's population , and no one will pay one Euro for seeing me climb the Alpe d' Huez.
So , however much it costs in terms of useless BTCs production processes , it does not give you one iota more value . Indeed, from the social point of view , the production of a BTC represents a loss of only manageable resources at a time like the present, in the aggregate processing computers capacity far exceeds demand , which makes a people do not mind having a program on your computer mining BTCs constantly running .
It is thus clear that this costly mechanism implemented for BTCs can be neither the cause of the value it may have, and therefore their hypothetical quality as money.
Consider now the other factor that seems relevant in this characterization : the absolute limit on the number of BTCs . Indeed , the number of BTCs that will circulate in the system is limited to 21 million units or more . Therefore , once reached that number may not post new BTCs (contrary to what happens with fiat money) , ensuring that its value is not diluted.
However, believe this is a fundamental feature of the coins represents a new conceptual error . In economics, resources are scarce , but not in absolute terms but in relative terms to the needs . The amount of gold is finite : maybe it is on Earth , but it sure is not in the universe. However, not all the gold has the same cost of production , so certain techniques (including a hypothetical operating on other planets ) are feasible only when gold takes a certain value.
This is essential in the economic game : the value of goods is reflected in the price, which is an indicator of the relative scarcity of good, and this price information to entrepreneurs on how many resources can be devoted to the acquisition of such well , thus making the supply (number of units) of well grow to accommodate demand . And so on.
It will not happen the same with BTCs , thanks to the design described . As much as rise in value , it will not have the possibility to increase the number of units . So , basically , this numerical limitation could become the Achilles heel of the invention.
Clearly if the BTCs up in value , and not being able to increase the supply , shortages occur, other entrepreneurs and provide alternatives appear in the form of another denomination of electronic money. In fact, today there are a number of electronic currency that can be alternative . (NXT COINS)
The point is that , as seen earlier in this article , the production of new electronic money is virtually no cost (remember , to generate BTCs computers spend ten minutes doing useless operations, an alternative money could logically deleted) . Thus, in a relatively short time the BTCs could become worthless , the flooded market of substitute products, whose production has very low costs. (NXT COINS)
Note that this does not apply to gold : with increasing its value, viable methods of producing more expensive are made, not less expensive methods. Not that gold is limited in quantity, is that it is for the value given to it at all times.
In short, neither the alleged requirement of processing capacity for Bitcoin system or absolute limit on the number of units , suppose from my point of view "good" characteristics of a BTC as money. Instead, possibly derived implementation of conceptual errors in the interpretation of money, stay in form and not in the background , and it is here where you can be your weakness ... like money.
Anyway, as I said at the end of the previous analysis, Bitcoin or come to be regarded as money is not a matter of economic theory, but the preferences of individuals at all times. Maybe some of the other features of Bitcoin ( anonymity , globalization, or some other facility that can not even imagine ) are sufficiently valued by individuals and that deficiencies are compensated targeted .
Only time will get us out of doubt.
