Bitcoin ?

[Pat Mustard]

I have no info about this currency; the "Bitcoin".
All I know that it's:
1-A Virtual Currency
2-It went viral nowadays and its value exceeded all expected.

So what do you think?

Google the Dutch tulip craze and that'll tell you all you need to know.

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

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When you understand that money in a regular bank is just a number on a database, bitcoin becomes just another currency... just another number.

There used to be an age when the money available to banks was related to the amount of actual valuable metal (or other commodities) that the bank possessed. The money we used, coins and bank notes, were backed by something that was actually worth something.
Nowadays, our bank notes are backed by promises of future profits... and last 2008 we saw just how feeble that system is. And it's heading there again.

What makes something valuable?
What makes money valuable? The fact that everyone agrees to exchange it for goods? That some goods are valued a particular amount, others are valued at another amount, and so on and so forth.

Bitcoins are being valuable because some people are interested in them... they attributing value to them. As long as someone is willing to exchange regular currency for bitcoins, they will be valuable. As soon as people stop that, bitcoins will become like credits on an online game.

The thing you're neglecting here is tha all currency is fiat, even those "backed" by "valuable"* metals. And the currencies tied to metal standards had many problems that todays currencies don't have as well as facing the same problems todays currencies do face. The biggest was its utter inflexibility, in that governments couldn't readjust their currency to suit the needs of their economy (a problem which has resurfaced to some extent with independent central banks pushing monaterist economic policy) And even under the gold standard most of the currency was backed by nothing, any run on a bank would only see the first few people able to exchange their paper for metal.

*What value does gold have any way? It is shiny it has very limited applications in electronics, and that is it. Just because it is rare doesn't automatically confer it with value.