Bitcoin, and other cryptocurrencies, need havê their own economy.

[Mr Khan]

Eddie_Raja said:

Mr Khan said:
Bitcoin needs to have a central bank or monetary authority behind it. Until then it is merely a speculative asset which is more fungible than other speculative assets.

Why would Bitcoin need a bank to ruin it?

An issuing authority is how money becomes money rather than merely an asset. The problems that bitcoin has faced so far has been the problem of insufficient liquidity for the major exchanges. Even aside from all of the fraud going on, Mt. Gox did not have hard currency sufficient to meet demand for all of the bitcoins in circulation. Meanwhile, sovereign central banks have the ability to purchase government securities to balance liquidity demand. When you do not have an issuing authority to settle accounts, or even, god forbid, to convert it into precious metals, then you don't have money, because it is not a perfectly liquid asset.

Granted, money itself can lose these qualities given state failure, but it's much less likely. I'd give more trust to the Greek Central Bank than to Mt. Gox. At least Greece will be there in 20 years.