Heard about Bitcoin recently. Seems I missed the gravy train on this one. Looking over at mtgox it seems like speculators are driving the price of bitcoins up. Also it's hard to get in since they don't accept pay pal

Anyway the actual worth of bitcoin I think for now is over valued because how few places they can be spent and the speculators. However if this currency goes mainstream and it starts to be accepted everywhere on the internet, it's value will be huge. I came up with an equation that gives a rough estimate of value (a kind of absolute measure of value). It helps me see if a currency is over valued or under valued. Assuming we had the total supply of 21 million bitcoins today and the number of internet users was where it is now at about 2 billion, one bitcoin would be worth about $250,000 USD. The problem is the value is only going to go up from there.
Lets imagine 50 years from now bitcoin has become the universal currency and there are 8 billion users, but still only 21 million bitcoins (assuming all the bitcoins are still around). Each bitcoin would be worth about 1 million in USD today! This would make transactions with bit coins ridicules. A hambuger off the dollar menu would cost 0.000001 bitcoin. The solution may be presentation however. So a hamburger on the dollar menu would be 1 Millibitcoin, which could be shortened to 1mB. That may solve the problem, but the way the system is now seems like a scam to make billionaires out of the early adopters to me (if it works).
Just thinking out loud here, but a better system I think would automatically set set the bitcoin creation difficulty based on the current usage. That way the currency would always have a rock hard steady value. If someone horded a bunch only to release them all at once, the creation of coins would automatically become almost impossible until the market absorbed the extra currency. Just an idea, athlough it may be more hackable I don't know.
I'm doing a post about this on my blog tomorrow:
http://www.thefashionablephilosopher.com/