(Disclaimer: I have a "bitcoin net worth" of about 10 BTC.) The first thing I thought of when I discovered Bitcoin was micropayments. I can understand the comp

(Disclaimer: I have a "bitcoin net worth" of about 10 BTC.) The first thing I thought of when I discovered Bitcoin was micropayments. I can understand the comparisons of Bitcoin to a pyramid scheme, but I don't think they're valid. A better example would be the founders not of a company, but of a state. After Alexander swept through the middle east, his generals suddenly became extremely wealthy and powerful due to their positions as de facto rulers of successor states and their control of the silver mines of Macedonia. Note that both the precious metal and the authority of the generals were necessary components of a stable currency: the durability, divisibility, and malleability of silver made it a superior medium; but a silver coin not stamped as the general stamped his coins was considered counterfeit at worst and much less valuable at best (since the new government would not accept any but its own coins as payment). This was a necessary protection against the sudden inflation and arbitrary redistribution of wealth that could be caused by a gold or silver rush. Much later, King Henry I of England perfected the use of tally sticks as currency. Without going into detail, his tally sticks were designed to prevent counterfeit and to minimize the trust between parties necessary to use the sticks as currency. Just like the idea of using one's military supremacy and control of a source of precious metals to convert military power to wealth and financial power, the tally sticks were essentially an information technology. The paper currencies of today's governments are the current state of the art in financial information technology. This is why bitcoin is more like an upstart state than an upstart business. Businesses don't compete with state currencies. Throughout history, the power to mint one's own currency has been largely (but not totally) reserved to the rulers of states. What makes Bitcoin so interesting is that it's taken the historical requirements of a working currency and attempted to eliminate one requirement by doubling down on the other. Bitcoin has no political authority or military might to enforce its use in trade, but it does have a very innovative information technology foundation. The question is, can a currency survive on the latter alone?