Will Bitcoin become an Official Currency?

The reason the US among other countries went off the gold standard is because one has to match the supply of money to the demand for money in order to maintain stability in the currency’s value.

You can’t just manufacture new gold. So, whenever the rate of change in demand for gold differs significantly from the rate of change in the supply of gold, prices become unstable.

Bitcoin is similarly difficult to create and destroy. When the rate of bitcoin discovery well outpaced demand, prices were depressed and stable relative to national currencies. Now that demand is large and changing quickly, and bitcoin has become relatively hard to discover–prices are driven by demand, which is massive and volatile. So, price is massive and volatile.

This is precisely why I feel that Bitcoin will never be an Global currency. Its rules ignore far too many invariants of how human society, power, and value work to be a good choice of national currency. Just like gold.

It’s great for speculation, though–if you know how shorting and risk management work.

Your thoughts?

EDIT: I meant Global instead of official!