Asks Tim Cohen in The Bottom Line today. He is referring to bitcoin and finds that quite a lot of people would invest in or buy a currency “unbacked by any government.” I would argue people are flocking to it, because it is neither backed nor controlled by any government.
Gold and silver are also currencies unbacked by any government. In fact, central banks (i.e. governments) buys gold to back up their own paper monies.
Perhaps bitcoin will one day do the same thing. But it still has a long way to go to before it gets there. For a start, because bitcoin doesn’t fit Mises regression theorem, meaning bitcoins do not have a historical objective exchange value before it started to function as a medium of exchange, it needs to find an objective exchange value first before it can settle as a reservable asset, or even serve as a reliable measure of value in exchange.