There is no such thing as "intrinsic value". All value is perception and subjective. Complicated arguments may enhance perceived value in others but keep in mind the subjective nature.
Once confidence collapses, "intrinsic value" flees out the door.
This is true. The easiest way to make this clear to someone is to ask them to define 'value', and note that they can't do so without either a) talking in terms of people and their subjective beliefs or b) relying on words that are just synonyms for 'value'.
You can avoid talking about people's subjective beliefs about good or services, and instead talk about their subjective beliefs about their lives. You can then measure the curve of subjective satisfaction with their lives and value can be defined as "the impact of a good or service on the satisfaction curve of a recipient's life".
Tying value to the subjective experience of the outcomes is qualitatively different than tying value to subjective beliefs about the goods or services.
For example, someone might buy a million dollar McMansion because they subjectively believe it's valuable to them, and then discover that they're miserable in it because it's horribly designed, poorly constructed, and expensive to maintain. That's fundamentally different from someone who buys a house that is cheap to heat and cool, makes their everyday tasks easier, and causes the release of pleasure chemicals in a sustainable and helpful way.
The latter has intrinsic value in a way the former doesn't.
Edit: You can also define value as the ability for a good to increase your overall wealth. So, some goods have a cost, and do nothing to my net worth (lottery ticket). But some, if you look at the longer term, have a cost, but also add to my net worth (buying a soy milk maker). If you put a dollar value on your experiences, this can cover everything.
Gold does have value: as an industrial commodity for coating electrical contacts and for IC wire bonding, among other uses. Its elemental characteristics are unique. This value is probably much lower than its present market value though.
Consider marginal utility. 100th glass of water is probably useless for you. Also, in some situations a person may value something higher than a glass of water, even if he's thirsty.
The next period of history could be defined as the post nation-state era, and of all the supranational technologies and institutions that will make this so, bitcoin could be the most important.
I'm talking about the ability of governments to restrict the activity of citizens and also to fund themselves from said activity.
This is exactly the reason Bitcoin will see very stiff resistance -- it threatens the powers that be in quite possibly the most effective way, removing control from them.
Bankers hate BTC because it removes them as intermediaries between people and their money, statists hate it because it ruins their socialist dreams of generating funds on demand (printing money) and makes inflation virtually impossible to them.
Fiat currency would fall by the wayside in the most real sense, and that scares the hell out of them (or it will).
There will always be nation-states. Always. Put ten strangers on an island and they will organically form a hierarchy and political alliances will happen. There will never be a government-less world as long as we're human.
There's a big difference between a government-less world and one without nation-states. Also, for the majority of human existence nation states didnt exist.
A "Lord of the flies" scenario has some costs, and the island scenario set a rules : any of these 10 humans can not move to another island.
As snikto and enki discussed below (great explain guys!) : "using up resources is not valuable by itself. forcing someone to spend on anything, anything at all, does not lead to a good allocation of resources. it might increase GDP, but it does not create value"
I would even say that such a misallocation of resources has a cost - the opportunity cost of the alternative, the proper allocation of resources.
Nation-states existed in Europe before WW2. They may or may not always exist in the future, but now we have something new: countries which borders do not match the ethnic boundaries- the advantage is that citizens are not so strongly bound to a national identity, and thus can start pitting countries against each others.
There is competition between countries for skills. If you are talented and not lucky to have been born in a rich country, you can decide whether to immigrate to Canada, Australia, Germany (etc.) - this is a market.
If you have a european passport, with Shengen rules you freely decided where you are doing to work. Just look at where the talented greeks and spaniards go.
The island scenarios is more like offering people the choice between a german-run island or a greek-run island, each voting with their feet. Sure there still is a cost of having a government, but it's going down, and will go down as fast as new choices are offered.
Identification to nation-states was a limiting factor in the past, but there also seemed seemed to be some kind of network effect where it was harder to be a small country, as it there was some kind of cost (the higher risk of being invaded?)
Now look at Luxembourg and Singapore - it seems than being smaller is no longer a disadvantage.
Certainly there will always be governing structures, of all scales, but the question is: which governence happens at what scale?
The federalism of the United States is a play to push power to a more state-sized scale (taxation, education) while still allowing for powers at a larger scale that need to be there (civil rights, defense, EPA).
Anarchism isn't really about abolishing power structures, it's about pushing more things down into even smaller structures (cults of personality, architectures, local cultural practices, etc).
The idea behind what your OP is saying isn't that nation-states will go away, it's that many of their current roles will be pushed off into larger, global structures whose "muscle" is not military, but cryptographic.
This is an excellent article explaining very well the Byzantine general's problem and how bitcoin provides a solution.
However, even if I agree with the answer, I don't agree with its "jump to the conclusion".
Here is my take on that:
Whether one's believes in decentralization or in centralization, another of bitcoin core assets is that it is not deflationary for prices.
All currencies have price deflation built it, for some macroeconomic reasons about motivating agents that I don't fully understand yet. It could be a good thing for economic growth, or it may not be. Let's leave that issue aside.
The important thing is that Bitcoin doesn't. Being convertible with other currencies means its value can only rise (following the definition of deflation!)
So the only question is whether the rise in relative value - bitcoin inflation - will be faster than the fall of the goods prices' in the other currencies.
And that's where the decentralization part plays its role and the article gives the right answer : if you believe in decentralization and in parties acting in their own best interests, it will be faster.
If you believe in centralization and people acting for the others best interest, it won't be faster.
Bitcoin is a fun experiment on human behaviour :-)
In the end, bitcoin value will still rise - if only because it provides a way to escape from the deflationary currencies. The only question is how fast.
There are negative interest government bonds being sold right now - IIRC, Germany and France do that.
Why one would make sure to take a fall when a conversion in bit coin means that the value can be preserved?
The question of whether it is a good thing for economic growth remains. It doesn't seems to be.
I don't have bitcoin wealth. I wish I did because it seems like a very good placement at the moment.
All currencies have price deflation built it, for some macroeconomic reasons about motivating agents that I don't fully understand yet. It could be a good thing for economic growth, or it may not be. Let's leave that issue aside.
Just to be clear, the reason that governments increase the currency supply is that citizens will do it with or without them. The most fundamental currency is a promissory note, an I.O.U. Every time you write someone an IOU you inflate the supply of currency, because the holder of that IOU can pass that around to others in the form of payment. Instead of sending your bushel of apples to the shoemaker who made your shoes, you now have to send half to the bread baker, and half to the candle maker as that IOU was spent.
A currency that doesn't grow will be naturally replaced by one that does. This is my biggest problem with bitcoin.
"A currency that doesn't grow will be naturally replaced by one that does." seems right, as long as the minimal discrete value of the currency that doesn't grow cause a problem for the economy.
But if you can move from discrete to continuous space (bitcoins can be cut up to 1E-8, and according to what I've read this is not a fixed limit), why bother moving to the other currency ?
(I hope I get it right - it's an area I don't fully understand)
yes, bitcoins in theory can be infinitely divided. classical observations about hoarding and "bad currency driving out the good" likely don't apply. if you want to spend, you just spend however little you want to spend.
Yes, it can fall at any point whenever demand goes down. But on a longer run, I believe demand won't go down but up, since it has this competitive advantage over other currencies.
If you believe that, I encourage you to start your own bitcoin clone, and take in at least half of all mined coins. (Or just put money in current standard bitcoins.)
I don't even gave a 2 digits amount of BTC IIRC, but I do accept donations.
And yeah, I'd like to have an alternative when bitcoin suffer the napster fate, because too many computing in the government hands could result in a bitcoin takeover
This is not uncommon when criticizing bitcoin. "It can only increase in value, therefore it is worthless" is clearly a contradictory statement -- it's essentially arguing that no one will want to buy bitcoins because too many people want to buy them.
I don't think you understand how currencies or economics work.
Currencies are by nature inflationary in a growing economy. This is a good thing, because inflation encourages spending and/or investment. Deflation is fatal to an economy: because the value of the currency will grow with non-use, deflation inhibits spending and investment.
Bitcoin's fatal flaw is that it is deflationary. At any given monent, you're better off not spending your bitcoins, because that same quantity of bitcoins will be worth more in the future.
Bitcoins other fatal flaw is that roughly half of all bitcoins mined thus far are held in the hands of the inventor of bitcoins and his closet buddies. They haven't been spending their bitcoins--but they're encouraging others to spend bitcoins as they are mined. This is close to (but not quite) the definition of a Ponzi scheme.
Inflation is not the only reason why I want to spend/invest money now rather than save them. In fact, it's not even a good reason, because it forces me to spend money.
Deflation doesn't discourage spending by itself. The price of holding to the money is the lost opportunity of investing those money into something else. I'd say, generally saving money is a good thing rather than bad because it allows me to only invest them when I consider the opportunity good enough. Presently, inflation punishes me if I save money. So, if we talk about particular individuals saving money, inflation is not a good thing for them. It might be good for specific groups of people who receive the money I spend, but then one might say it is good for them at my expense. Which brings us to the idea that inflation is simply a tax.
using up resources is not valuable by itself. forcing someone to spend on anything, anything at all, does not lead to a good allocation of resources. it might increase GDP, but it does not create value.
under inflationary interpretations of value creation, building a road circling back onto itself - not connected to anything - in the middle of a desert that no one ever visits - increases GDP and thus helps the economy. the better if you afterwards tear it up and rebuild it a second time.
on the other hand, in a stable currency system, if someone holds on to their capital, they actually free up resources for those who do spend. this means the purchasing power of those who do spend goes up.
in such a system money flows away from those who spend on things that have no return (consumption), and towards those who create (value creation by seizing and creating opportunities).
> it's not even a good reason, because it forces me to spend money.
It doesn't force you to spend money, it does however attach a cost to you hoarding your currency. This makes sense, because you're harming the system as a whole by hoarding. If you were allowed to hoard currency without paying some sort of price that would be an externality.
No, I'm awaiting a good opportunity to invest. If in my judgement there's currently nothing good on the market that I can invest into, why should I be paying the price? I don't quite understand. If you want my money, make something I want to buy/invest into. Inflation forces me to spend money on things I otherwise would not buy. Thus, it promotes goods and services that are not quite as good.
Also, I don't understand why do you consider hoarding a bad thing? If you agree that I honestly earned the money, than you should also agree that I am free to do with them whatever the hell I want. Currencies controlled by governments tax me with inflation, bitcoin doesn't (or at least, it's predictable, open and not controlled by one organization).
Upd: attaching additional costs (because there are other costs that are inherent to hoarding, like lost opportunity costs) is, in my view, forcing. It makes me it more likely that I spend the money. Let's not debate semantics.
This is a very interesting discussion. I now take away that hoarding money is like paying for storage costs, i.e paying someone so that you can keep your money.
Before he started writing more political stuff, Paul Krugman wrote a great article in Slate about a baby-sitting co-op that had a "recession" because everyone was saving too much and not spending enough. It's a nice example of the liquidity trap that he talks about a lot: http://www.slate.com/articles/business/the_dismal_science/19...
When I spend, someone else has a job. We measure the health/strength of economies based on the amount of economic activity, and this does seem to correlate (though not perfectly, obviously) with human flourishing and other things we care about.
I don't know a lot about economics, so I don't see why spending is always the best thing to do.
Maybe spending doesn't lead to the best allocation of resources, as I could be blocking someone from using resources I bought, but cannot utilise as well as the other person could.
Not always. Saving means I'm foregoing some consumption today in favor of undetermined consumption tomorrow. If everyone saves too much, we aren't taking full advantage of our production capacity today (because we don't know yet what they will want, and it may be perishable anyway). It's like traffic, rush hour is bad because everyone waited rather than using the highway when it was idle mid-day.
Bitcoins other fatal flaw is that roughly half of all bitcoins mined thus far are held in the hands of the inventor of bitcoins and his closet buddies. They haven't been spending their bitcoins--but they're encouraging others to spend bitcoins as they are mined.
True, that claim was FUD. The problem bitcoin has is that there is no better refutation of the claim than yours. As politicians well know fud-slinging can be effective. When deciding whether to use bitcoin, people will either have to hold their nose and hope it is not true, or turn around and go elsewhere. The bigger bitcoin becomes, the greater the miasma.
Uh, we can know exactly how many early mined bitcoins are being kept and how many aren't; it's a matter of downloading the public transaction block and following them. You don't need to "hope" it's not true.
And in either case, I don't see what's the problem with that. People don't refuse to invest in Google just because the founders control the majority of stock votes. As long as one benefits from using Bitcoin, why should we care?
It is not possible that we can know to whom they once belonged nor to whom they currently belong.
"And in either case ..." We are now several levels deep in this thread. Even if I agree with your point - and I do - the point is almost entirely lost already. Most would have stopped reading at the grandparent of my first post. Notwithstanding the special case of the hackernews domain. In the wider world, just a little shit that sticks - smells. So how do we manage the perception - not just the fact - of this problem? Because it WILL be necessary if bitcoin is to flourish.
> Currencies are by nature inflationary in a growing economy.
That depends on the supply of the currency though, no? If it's not expanding, but the economy is growing, it will cause deflation, which is indeed viewed as 'bad'. Right? Or am I missing something?
It's never that simple. First of all, the currency supply is kind of a red herring. What really matters here is the relation:
Real GDP = Nominal GDP * Price level
So if you care about growth in Real GDP (ostensibly because you consider Real GDP to be a proxy for Living Standards, and that's what really should matter), then obviously the right hand side of the equation must somehow move accordingly. But: that's not the only constraint on what can happen.
Not all trajectories of the variables in this equation are equally plausible, even when they all satisfy the equation.
I read your statement as an implicit one-directional causality. Let me rephrase your statement with the goal of clarifying what we're talking about (and please correct me if I mis-interpreted): if the economy grows (Real GDP is growing), and then nominal GDP is somehow forced to remain constant, then that will cause prices to go down.
But why would it? The main direct driver of real growth is demand. Having more customers is what ultimately causes firms to produce more, build new factories, hire employees. Somewhat more indirectly, the belief of being able to get more customers in the future also causes firms to produce more, build new factories, hire employees.
Now if you force nominal GDP to remain constant, then the first signal that firms receive is that demand stops growing. Hence the first signal that firms receive will most likely cause them to stop increasing production.
Granted, it is conceivable that firms interpret the signal of flat demand differently, and that they react by reducing their prices. This is an empirical question, which seems to be answered mostly in the direction that prices are "sticky".
So in summary, if you force Nominal GDP to remain constant, you will most likely stop the economy from growing.
Note that the reverse of your implied causality is more plausible in a limited sense: if for some reason prices decrease, then this could well cause Real GDP to grow while Nominal GDP remains constant (this is true as long as wages do not decrease along with prices, because then nominal demand can remain the same, while more goods are moved for the same nominal demand). But then you somehow have to explain how that decrease in prices is caused.
That would be true in a strictly hard currency world, as each dollar in circulation would become more valuable (because it would be increasingly more difficult to find another dollar to spend). However, when you take into account credit-based spending (i.e., loans, credit cards, etc.), the "limit" at which deflation kicks in gets pushed up significantly. I know there are papers/studies on this, but as I haven't had access to a university library subscription in a while, I couldn't provide sources.
There is an obvious inflation/deflation twist, as explained in another post. My mistake - I'm not familiar enough yet with economists vocabulary and perspective.
If the economy is not growing as fast as your currency supply is, I'd prefer calling that "purchasing power" deflation since I think on the purchaser side - and you will get less and less stuff for a given amount of your money (while of course the token price will inflate - sorry if this was not clear)
Besides that twist, I don't agree with your conclusions.
It's all about perspective, and IMHO you are too clear cut.
Currencies being inflationary in a growing economy - it's good if you are productive and don't have much capital. It's not good if you are not productive but already have acquired capital, because you must then do something - like invest or spend - or you will be less well-off.
There is a clear link between spending, investment and economical activity, but saying that this link is better to the alternative - the link between not spending, not investing and not trading is all about one's values.
(I mean, like many here I share your opinion, hence my initial remark about bitcoin not being good for economic growth, but many leftists and "deflating" folks would say that it would be better for the planet and so on if we stopped growing and even inverted the tendency)
Likewise, half of the bitcoin being held by the inventor is a good thing for this inventor, and is a statement of how good he think his product is. Just like an IPO - he hasn't cashed in yet, so I take this as a statement of trust.
It's not good for you and me because it might have bad effects on bitcoin if the cash-out is too fast.
Maybe I'm mistaken, but I think the specific value of 12 in this example is an error from using an original description at http://www.mail-archive.com/cryptography@metzdowd.com/msg099... — the original description uses the value of 2 hours (12 * 10 minutes), whereas Paul's does not.
author here: i've written 12x10 minutes, and the original description writes 12x10 minutes. is there something i've missed?
it takes 10 minutes to find a solution, but only after 12 solutions have been found (the chain has been extended 12 times total), can the authenticity of the first of those 12 be guaranteed.
The original description uses the value 12 because of the prior value of 2 hours, whereas you seem to just have N generals and no such hourly time from which to derive 12, plus this:
The existence of the 12-block chain is proof that a majority of them has participated in its creation.
Why is the existence of 12 verifications proof that a majority of N have participated?
because an attacker controlling less than 50% of the computational resources can be lucky and find the first solution before anyone else.
he can even be lucky twice or thrice. but to be lucky 12 times against everyone else with less than 50% of the resources, is statistically improbable.
2 hours is the result of those two values (12 being statistically relevant, and 10 minutes a chosen parameter of problem difficulty), not an input variable.
Even from the comments and my own understanding is Bitcoin acts more like an asset. It be very tough to run an economic cycle using it. Imagine someone ordering a truckload of clothing and promising salaries to the workers but by the time it's ready, value of Bitcoin would go up, hence that person will receive less Bitcoins unless specified. The buyer i.e. holder of Bitcoin will always try to delay payment, so they will have to pay less amount.
Why would they receive less bitcoins? If you agreed to pay 30 bitcoins, that doesn't change just because the BTC has increased in value. Conversely, when I agree to pay $200 to a lender, he can't tell me after than I have to pay $203 to cover the inflation costs.
What happens in that people make those agreements with the inflation/deflation rates already in mind, and Bitcoin actually has an upper hand since its rate of growth follows a stable pattern, unlike currencies that can be printed at whim.
the dollar and euro are also assets in that way. you're usually just not aware of its fluctuations (against each other, against other currencies, and against commodities)
Not quite. My point is Bitcoin is more like gold rather than any fiat currency. Gold can still be inflationary by finding new mining rigs and asteroid mining in the future but Bitcoin has a upper limit. So it will always be an asset against all fiat currencies. Which will hinder trade as the way I have listed above.
I believe the term you're looking for is a commodity.
Keep in mind that commodity based currencies (like gold) have existed for thousands of years. Bitcoin acts more like a commodity than these because there's a specific upper limit on the maximum quantity and you can't discover new bitcoins (at least after they are all mined.
But yes, this could be considered a good thing (no one can control it) or a bad thing (no one can control it).
The problem with this article is that in the very second sentence, the author switches from discussing bitcoins themselves to discussing the bitcoin monetary system as a whole. Of course the whole system has intrinsic value, but that is a separate issue from whether or not the currency itself has intrinsic value. In fact, it is generally necessary for a non-commodity currency not to have significant intrinsic value.
How is bitcoin a non-commodity currency? If bitcoins have value because they allow you to do things you couldn't otherwise do (my point), it's a commodity.
why is it desirable for a currency to be a non-commodity currency?
Bitcoins do not have value anymore then a paper dollar has value. People are willing to accept it as payment knowing that others will also accept it as payment. You can (and I have) set up your own bitcoin system and get as many as you want. The only difference with that one and the main network is that the main network is bigger, and has a genesis block that people recognize as identifying it as the main bitcoin network.
If everyone changed their programs to recognize my genesis block as the correct one, then all of the main bitcoins will be worthless.
Well, if you don't make the bill unfit to be reissued (or don't intend to), you're in the clear in the US. The law with coins is more lenient; as long as you aren't defacing them fraudulently, it's not illegal.
I was trying to avoid the term "fiat money" to describe bitcoin, because the term has several meanings, and some argue that bitcoin is not a fiat currency because it is decentralized.
What I mean by "commodity currency" is a currency that is (or is backed by) a currency. Gold would be the obvious example.
>why is it desirable for a currency to be a non-commodity currency?
One of the most important tasks of a monetary system is to regulate the money supply. This can be done via various methods. This can be done with monetary policy as in the case of the US dollar. Or it can be done by leveraging a commodity with a (hopefully) predictable market, as with gold. Or it can be done, as with bitcoin, by creating an artificial process which is provably predictable.
Now, when you use a commodity, you have a problem which is that you are hoping that no new developments will come about that completely throw off your assumptions about the market. If you were using precious aluminum as a currency in 1850, your economy would have collapsed in 1886 when the Hall–Héroult process was invented, causing rapid inflation. That's a supply side problem.
But a demand side problem is also possible. Imagine if indium had been our currency, for example. Indium is a rare element and was rather useless until the latter half of the 20th century. The rapidly increasing demand for indium as a useful commodity would have caused severe deflation.
A fiat currency system works on the assumption that there is no market effect of demand for the money outside of its function as money. In the case of American currency, this assumption is mostly true, but there are small exceptions such as coin collection which have a negligible impact on the money supply (a collected quarter is effectively 25 cents taken out of circulation). If the assumption were rendered totally invalid, the Fed could completely lose control of the money supply.
author here: there's a cost with storing gold in the ground and securing it, and there's a cost with printing counterfeit-resistant paper and finding and jailing counterfeiters (and a cost with not doing so - unbounded inflation)
an interesting question then is: are the above costs greater than the cost of operating bitcoin? it might seem so at first, but don't be so sure and run the numbers on the back of an envelope.
also walk around downtown in SF and NYC and look at the amount of skyscrapers that are nothing but banks, scratch your head, and ask yourself what value they're actually adding.
>also walk around downtown in SF and NYC and look at the amount of skyscrapers that are nothing but banks, scratch your head, and ask yourself what value they're actually adding.
True. But I suppose one would need to define "what is a bank". From a pure "money warehouse" definition they don't deserve to be that big, however from a lending / investment perspective there is more value there.
I think in the end, a decentralized lending scheme (Mike Hearn has spoken and written on this subject) integrated to bitcoin as the possibility to radically change the social order.
It will very hard to fund wars without a printing press.
bitcoin's problem is that the financial sector is massively regulated - you're going to jail if you attempt to compete.
creating a website where you can store $10, send it to me, and then let me withdraw it, is a 5 year felony in california. that's even when the site is complying with all anti-money-laundering and know-your-customer regulation that could be argued for because of terrorism. it's purely a licensing issue.
bitcoin's influence probably won't significantly grow until people find legal workarounds/ways to comply (of which there are plenty, but likely implementing them takes someone committed at least a year), or something happens that makes enforcement of the law unlikely.
i personally know of a sizable number of bitcoin startups with working/finished software and a great marketing strategy, that gave up in the face of financial regulation and threatened jail time.
A legitimate question: is it possible for Bitcoin to still gain traction even if no one profits? I mean, is there a scenario, sort of like social media and the Arab Spring, where people will run the risk and break the law to gain access? Perhaps in a hyperinflation environment like Zimbabwe a few years back? Or for that matter like Iran right now?
could they not just run their services off Tor and thumb their nose at the financial authorities like certain other sites and services do, seemingly with impunity?
only if you're ok with never buying any physical goods with bitcoin. the weak point is the exchange between bitcoins and classical currencies or physical goods.
Running through TOR doesn't actually affect this. After the first node, the only data on who is giving money to who is the bitcoin public keys. The only way to attach those keys to a person is to have access to a node that is 1 degree removed, in which case you have the IP adress from TCP, or look through the. block chain to see who else the bitcoin ID you are looking into traded with. The first aproach is not common, and TOR will not help on the second.
When you are a business fearing regulation, this is all irrelevent, because you need to make public what customers get in return for sending you bitcoins, as well as your public key, so customers know who to pay.
It would be interesting to see a truly anonamaus bitcoin system. You would need invalidate a coin for which you do know a secret, and create a new coin for which someone else knows a secret, in such a way that when the other person proves they know the secret no one can figure out that the coin they know about is the one you gave them. Giving all of the things already possible, this seems like it is easy in theory. Doing it in a computationally efficient way is a different story.
What financial regulations don't apply to Bitcoin?
Just because you're using Dunning-Krugerrands instead of US Dollars doesn't mean what you're doing with them isn't transacting, banking, investing and so on.
It's the act that's regulated, not the currency used for it. (Though that could be regulated too.)
This to me is one of the most interesting aspects of bitcoin.
Some have speculated that if bitcoin is widely adopted in the global economy, then a certain percentage of all energy produced on the planet will have to be spent doing proof of work to secure the blockchain.
It's pretty easy for me to see a swing back to centralised currencies in that situation, it's only worth all the energy needed if you really don't trust the central authority.
There are a number of suggested solutions to this problem, one of which is proof-of-stake and there is already a client based on bitcoin called ppcoin which uses it. Currently ppcoin is a hybrid of proof-of-work and proof-of-stake but potentially could be a low energy version of bitcoin.
I have often thought that if bitcoin is really successful it will be worthless, because it will have forced the central authorities to be more fiscally responsible, removing the reason for bitcoins existence.
But I can't also help thinking that maybe we just need several competing global centrallly printed currencies, and you can pay or be paid in whichever you choose. As long as a cartel doesn't form competition should keep the central authorities honest.
Once confidence collapses, "intrinsic value" flees out the door.