> we should be secure against irrational attackers too
Right, of course it would be better to have something indestructible. But so far it's "good enough" (passes the reviews of its individual components, has resisted for years as a system, but wouldn't resist an irrational attacker). And I much rather have this than the previous system, which is insecure by design (ie: your funds can and are systematically stolen through inflation and other means). Maybe you live in a very good country, where you don't have to worry about such issues (or you live in a regular country but are just not conscious about it?). But most of the world (including myself) doesn't, so Bitcoin is welcome as is.
Perhaps so, but what I was originally replying to was a claim that Bitcoin was rock solid. There is an enormous difference between "good enough" and "rock solid."
"I much rather have this than the previous system, which is insecure by design (ie: your funds can and are systematically stolen through inflation and other means)."
Perhaps so, but as I have noted elsewhere, Bitcoin is not a fiat currency killer. Most businesses that claim to accept Bitcoin payments are actually accepting fiat currency payments. Most adults still need to pay their taxes. There are strong incentives to issue loans in the currency that the courts deal in i.e. fiat currency.
Basically, think of it this way: if Bitcoin exchanges were to disappear right now, what would happen to Bitcoin? What reason is there to think that Bitcoin will ever reach a point where it is not utterly dependent on the existence of exchanges? When even people who want to adopt Bitcoin are only doing so with the help of services that automatically exchange Bitcoin payments for fiat currency, why should we believe that we can ever live in a world where Bitcoin stands on its own two feet?
Finally, let's assume that there is an economic theory that supports a system like Bitcoin i.e. a currency that has no central authority and no intrinsic value. That theory should motivate a security definition. As a point of reference, consider Chartalism (a key part of modern monetary theory), which basically explains why fiat currency works (in a nutshell: the government issues the money and requires you to return some amount later on via taxes), and a key security definition used in the academic work on digital cash (in a nutshell: you have security if it is infeasible to deposit more money with the bank than was withdrawn [this can be stated more formally]). Note the very clear connection: the central authority issues the currency and decides its validity when it is "deposited."
So, to bring things full circle, I give you this challenge: present an economic theory to explain systems like Bitcoin, and use that theory to motivate a security definition that Bitcoin can be tested against (or better yet, proved to meet).
> Basically, think of it this way: if Bitcoin exchanges were to disappear right now, what would happen to Bitcoin?
If Bitcoin doesn't replace all currencies (I don't expect it to do that anyway), it can be used as digital gold (in fact I think you can expect higher price increases from this use case, than from every day transactions). Currently I would love to be able to save in gold, but I can't for many reasons. My government banned it, so I can no longer buy it in a trusted bank (if such thing exists). I can't buy it from other individuals like me, because it's difficult to divide, so you can never get the amount you wanted. You can't import it from other countries because you can't hide it from customs. You can't buy it in the black market either, because they will sell you golden bars filled with tungsten. And all this is for buying. When you want to sell it you will have similar problems. Bitcoin fixes all this, and you don't really need exchanges for this. In fact I never used one (international wires are banned).
Let me think about the security definition. I don't promise you anything, but I'll give it a try when my mind is clear.
Right, of course it would be better to have something indestructible. But so far it's "good enough" (passes the reviews of its individual components, has resisted for years as a system, but wouldn't resist an irrational attacker). And I much rather have this than the previous system, which is insecure by design (ie: your funds can and are systematically stolen through inflation and other means). Maybe you live in a very good country, where you don't have to worry about such issues (or you live in a regular country but are just not conscious about it?). But most of the world (including myself) doesn't, so Bitcoin is welcome as is.