Falkvinge wants bitcoin to become what he thinks bitcoin was made for.
The most importan claim he makes is that more than 90 percent of the bitcoin-prize is made of speculation. Even if he's wrong and it are 80 or 70 or 60 percent - this is more unnatural and insustaineble than fiat has been in its worst days.
But BTC can be used as a store of value. To look at BTC as just a currency, is cutting it way short.
It is a:
currency
asset
protocol
payment system
store of value
etc.
I don't think we can evaluate that with traditional means. (Not saying it isn't over or under valued though.)
+1
(it is also a programmable asset -> possible bond, contract, share, and many more possibilities)
I am buying with bitcoin sometimes but I am using it like a store of value. I cannot say the same with fiat. Neither can cypriots or polish elders
In the same way. What is the money velocity of gold?. Of all the tons of gold around the world, how many are being used to buy stuff around?. Maybe gold should be also valued at 1$?. It is being used as a store of value. Not everything is buying stuff on walmart.
The determinants and consequent stability of the velocity of money are a subject of controversy across and within schools of economic thought. Those favoring a quantity theory of money have tended to believe that, in the absence of inflationary or deflationary expectations, velocity will be technologically determined and stable, and that such expectations will not generally arise without a signal that overall prices have changed or will change. This view has been discredited by the precipitous fall in velocity in the Japanese "Lost Decade" and the worldwide "Great Recession" and its aftermath of 200810
Not the case for bitcoin, gold or lately even fiat.
Some people have incorrectly interpreted velocity to mean the time between receipt of income and when it is spent. Note that how much income is spent helps determine GDP, but when during a pay period it is spent is immaterial. There could be a large volume of spending by people who waited a long time between receiving income and spending it. They could store their income in non-money forms, such as stocks and bonds, between receiving income and spending it. So that notion of "how fast income is spent" is a fallacy
