I worship Spyderco, but I don't tow the party line anymore regarding serrations.
Serrations are good for cutting materials that are very hard or very soft. With hard things, like wood or PVC pipe, the serrations can be used like a saw. With soft things, like cheese and tomatoes, serrations work well because the edge can be totally submerged and pulled through the material. Serrations are fantastic for a material that is both hard and soft. For instance; bread is often hard on the outside and soft in the middle, which is why bread knives are often serrated.
The big, shocking revelation about serrated knives is: Serrations are not better at cutting rope! Actually, I guess that's not much of a revelation, since people here have already mentioned it, but I thought for a long time that everyone pretty much agreed serrations were better for rope.
Serrations do cut rope well, but why is this? Is the serration pattern of the edge actually helpful? I don't think so. Serrations are usually chisel ground and chisel ground edges are usually very thin. When knifemakers enter a knife into a rope cutting competetion, they put a very thin edge on the knife. For rope cutting, the thinner the better, and serrated knives have a thin edge.
Serrations on modern utility knives are a fad. It's a marketing gimmick that became popular in the mid '80s along with the tanto point. There are few historical examples of serrated utility knives or American tanto knives, probably because these features are not very useful. Additionally, there are a lot of magic tricks and slogans that accompany these gimmicks, but you've got to try to look at them objectively.
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Cerulean
"Just because some folks think you make great kydex sheaths doesn't make you into some sort of mind reading psychologist." -Paracelsus