cjrgreen: That's not quite so: the dollar does not have a value "imposed by law", it has a value that is determined by the buyers and sellers of dollars (and of goods, services, obligations, and securities denominated in dollars). One of those uses is the payment of debts and taxes in the United States.
I'm affraid you didn't understand what i said or i failed to express myself correctly. Of course the "value" itself, i mean, how much one dollar is worth depends on offer and demand. This is not what i'm saying. I'm saying that the dollar is accepted as a currency in the US because the law says so. If there wasn't the government there to say that the dollar is the official currency, it wouldn't have any value at all. It's enforced by law. For example, sellers in the US can't reject payments in dollars in any way, but they are not forced to accept payments in pounds. An official currency has "liberatory power", which is indeed enforced by law.
cjrgreen: The difference between a bitcoin and a currency is that a currency has a government and a banking system behind it: institutions that stand ready and make effort to maintain its value stable relative to other currencies and its supply sufficient to deal in the goods and services that make up the national (or, especially for dollars and euros, international) economy.
Exactly.
cjrgreen: And gold gained ascendancy as a metal of coinage not because it was scarce, but because it was sufficiently plentiful and durable. It has no intrinsic value, apart from its uses in arts and industry.
Yes, but i didn't say that gold was used because it was scarce.
Whether gold (or any other metal, for that matter) has intrisic value or not is debatable. There are economists sayind that it does, and others saying that it doesn't, so let's just agree to disagree here. I personally think it does exactly because of it's characteristics as a metal.
