Wedge

It really is toy money innit... ;)

What charm and place in society?

The idea of a virtual currency based on CPU time is totally unworkable. (In a former life I studied economics. It has no viable economic basis.)

I think you're missing the point, though.

What is currency? How does currency work? Well, go back to ye olden times, you had goods exchanged between people, a butcher might trade his meat with a farmer for grain. In order for that to work on a larger scale, currency was invented as a form of IOU to enable transactions without having to cart around the physical goods.

The kicker, of course, is that the currency is worth what it's worth - and its worth is usually determined by governmental issue; governments printing more cash at a colossal scale causes hyperinflation and the currency stops being worth as much.

Now, with Bitcoins, the whole point is that it's decentralised. While that seems wonderful for the sorts of folks that need it, it really isn't. Even if we take the assumption that a Bitcoin is a tradeable commodity, it suffers from all the same supply and demand logistics that apply to any other commodity, namely that the price a given market will pay based on available supply and demand.

Money, or more specifically currency, is a commodity - the value of money is depending on the supply (from the government) and demand (people spending). Create more money in the economy, supply goes up, demand doesn't increase so fast, the money devalues.

Bitcoins have this exact problem: they're a toy currency. The amount of exchangeable currency available is a product of supply and demand, and the demand for Bitcoins is constrained, while supply is far less so, so over time the value will deflate. That aside, you still have to exchange it for currency, meaning that you're trying to convert a series of numbers into real currency - but I don't see much happening the other way.

Conceptually, what is the difference between buying Bitcoins and buying Facebook Credits, outside of the fact that FB credits are only spendable via FB?

$11k? That's my living costs for a number of months, really. But I couldn't in good conscience accept. Not just because I find the entire idea of Bitcoins so ridiculous but because they're arguing for changes that don't really benefit anyone except in the feel-good department.

Well... here's the thing, it's not $11k actual cash. It's $11k's worth of toy money. And for the amount of time it would require, I could easily earn $11k of actually usable money.

Toy money is only as valuable as anyone is willing to pay to convert it to real money.