If only there could be some kind of organization that could manage BitCoin to make it a more stable currency. I don't know, something where smart economists have sophisticated models and powerful tools like creating and destroying BitCoin currency on the fly. I wonder if that could ever work.
= Central Bank. Maybe a technologically advanced central bank, but a Central Bank. Not saying it's good or bad, but just observing.
It seems to me that both TigerJimmy and TonyC have both objectively good points.
Currency value is exactly the value you put on the things currency can buy. Calling it "intrinsic" or not is a debate on words, rather than concepts. And, you may print "$5" on a bill, but its value will be significantly different if with that same $5 you buy a hamburger or ten hamburgers. Value IS by definition subjective. If we're talking about "face value", that is the number you print on bills, that's nothing like the actual, real economic value. As long as we agree on words and definition, there's little to debate here, I think.
At the same time, indeed currency is more efficient and effective than barter in exchanging value among trading parties, and so in allowing a market to exist. That's the primary and possibly the only real reason why currency exist.
Yet, indeed currency >supply< and >value< (versus the goods or services it can buy) can be, and have been, manipulated by governments, and that requires, necessarily, caution and, as much as possible, surveillance and monitoring on behalf of citizens.
I find it absurd to assume Governments have always and will always be fair and honest in dealing with currency.
In the 80s Italian Governments have ALL altered exchange rate to gain international competitiveness without addressing internal efficiency issues, only to pay the bitter price for that choice two decades later when the Euro exchange rate was fixed, practically doubling internally the prices of most goods, and causing so much de facto inflation right at the beginning of the economic recession. Not to mention the huge, unjustified public debt we're still struggling to cope with. Just an example of very poor government decision making in terms of money supply.
Governments may and often will make mistakes, ("mistakes"?) and currency WILL be affected by such mistakes more than goods that do carry objective value. An apple will feed you whether it costs $1 or $100 in the market. This is undeniable and clearly I am with TigerJimmy on this. Gold may not be the answer, though, as it is not an Apple and, itself, it is a quasi-currency, and has a lot of the uncertainty of a currency, albeit probably not AS much, if you look at past data (but who knows). Still, the principle remains: currency by its own nature is will not necessarily preserve its value at desirable levels, and often because of poor economic policies or, even more often, of poor politics. It is wise to keep this in mind.
That does not mean we can address gov'ts misconduct in terms of monetary policy, or edge against fluctuation of money market or currency purchasing power, by just not using currency, or by mistrusting currency per se, as a system.