I don't know why it is required that it is used in legitimate purchases. No one questions the value of gold, yet not many people use it to make purchases. I suspect bitcoins value will follow the same pattern as gold, once it is stable. When the world is full of uncertainty, it's value will rise. When things are steady, it's value will fall.
> No one questions the value of gold, yet not many people
> use it to make purchases.
Gold is purchased and used to make art, jewelry, electronics, medical devices, and so on in addition to being hoarded as an investment / currency reserve. Those products have real tangible value. Very few people are interested in buying bitcoin just to use the bitcoin address as artwork, for example. Tulip bulbs had more actual value. At its peak, one tulip bulb cost around €25,000 and WAS being used for legitimate purchases: milk, cheese, cows, wine, etc. Even after the price of tulip bulbs crashed, you could still at least plant them and grow flowers. If bitcoin reaches that price and crashes to next to nothing, what could you use your bitcoin for?
A secure blockchain has a plethora of uses beyond money. Currently the Bitcoin blockchain is the only blockchain to offer the kind of security necessary for innovations such as Proof of Existence, http://www.proofofexistence.com/about
In the future the same blockchain could be used for automated arbitration, estate planning, "smart" property ownership/transference.
Less than 1% of the value of gold has anything to do with its industrial/artistic uses.
People question the value of gold all the time. That's why gold has a market price, and why people are commenting on it being way-overvalued and basically guaranteed to be in for a fall due to economic recovery - probably keyed to the Asian markets where a lot of money fled to gold.
The thing is, you don't follow commodity price news.
