But bitcoins are more fungible than either USD or CNY, because it is cross-border and "offshore". That's why the Chinese seem willing to pay a premium, because BTC cannot restricted by capital controls.
The cross-border, "offshore", unseizable aspect was the biggest reason for my initial interest. Not the potential price gains (I always assumed price would top below $100 and remain a relatively tiny niche currency forever thereafter).
I cannot buy groceries, pay my mortgage, put gas in my car, etc as I do with the USD right now. Because I can't use BTC as easily as USD it is by definition less fungible.
It also seems seizable. Didn't Silk Road have their stuff taken?
It does seem more safe in BTC form but again to use it for most things requires an exchange back into a popular currency and state actors can easily control exchanges.
"USD" doesn't exist online, instead users are making payments online in paypal-USD, bankWire-USD, or visaDebit-USD. But what about the other side of the world, where payments are made in Alipay-CNY or Tenpay-CNY? If there's a chinese user of Alipay, how can you do business if you only have Paypal?
Paypal-USD is not fungible with Alipay-CNY, they are separate payment networks (if you don't believe me, try to find an exchanger). The situation is like the days before SMTP, when AOL and Compuserve had different e-mail networks and a user of one couldn't send an e-mail to a user of the other. But BTC is easily exchanged for either Alipay-CNY or for Paypal-USD, so it is more fungible than both.
The cross-border, "offshore", unseizable aspect was the biggest reason for my initial interest. Not the potential price gains (I always assumed price would top below $100 and remain a relatively tiny niche currency forever thereafter).