Bitcoin is an extremely interesting concept. A good friend has been preaching them to me for about 4 months now. I LOVE the idea of a currency that is not controlled by a government or even a group of people, but rather is very predictable in its new issuance - something around a total 17 million by the time the algorithm completes its cycle in a couple years. I like the idea that it is completely untraceable. I do not like the idea that it is totally electronic, and therefore totally fiat and dependent on the grid to retain any value.
But the really interesting thing I find about Bitcoin is why people care about it in the first place. At its peak today, its total market cap was still only around $2 billion U.S. In concept it is really no different than the game tokens we buy for our kids and grandkids at the kiddy pizza parlor. So why is this even news?
I contend Bitcoin even matters because it is NOT the Dollar, Yen, or Euro. It is something new and, at least on its face, something completely "free market". I do not expect Bitcoin to survive long term. But I do expect that its recent attention will usher in something else that has a higher market cap, is uncontrollable by governments, and provides a means for the free-market to continue, even if it is an "underground" capacity.
Even with today's wipe-out, I am very thankful for Bitcoin (even though I would not touch it with a 10 foot pole as an investment or even a trading mechanism). I think this is one of the failures that will lead to the ultimate success of the free-market without government intervention.