Bitcoins are cryptographically brilliant but economically illiterate.
Fiat "money" treats an "IOU nothing" as having real value, and Bitcoin does exactly the same. Bitcoin strictly limits the number of "nothings" that can be issued, but this does not give them value.
I tend to not agree as bitcoin is based on real physical processes to be issued.
That's the constraint on supply that I mentioned. Bitcoin is economically illiterate because of the demand side, not the supply side. There is no non-speculative demand for these ledger entries, because they are only ledger entries.
A thought experiment: if Satoshi promised to pay 1 troy ounce of gold for each Bitcoin, and people believed him, probably they would trade at about 1 troy ounce of gold. If it was suddenly discovered that Satoshi was bankrupt and could never pay, the price would plummet, probably to zero. But notice that we are in exactly that situation, where Bitcoins are ledger entries that can't be redeemed for anything.
