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There's this received wisdom among sociologists that three prerequisites for a stable country are laws, someone to enforce them and a judiciary. I mention this

There's this received wisdom among sociologists that three prerequisites for a stable country are laws, someone to enforce them and a judiciary. I mention this since Bitcoin is creating it's own economy which is analogous to a virtual country. The major benefit of Bitcoin, it's lack of jurisdiction, may also be a disadvantage. As the first disputes arise, hopefully a body of precedent will be developed that strengthens the currency rather than destroys it.

cgerard 16y ago
An economy is based more on the trust between the actors within it than on its medium of exchange or the goods and services being exchanged. Bitcoin doesn't address this aspect. Because fraud and collusion are still possible in a Bitcoin economy there exists the possibility of both currency instability and the creation and enforcement of monetary policy. An irrational public can be just as damaging to a currency's value as an unwise central bank or government. Regardless, I find Bitcoin to be a very interesting system and I'll keep tabs on its development.