Why do people assign value to Bitcoins?

[johnniewalker]

Its economics. Its based on unlimited demand and limited supply. When there is a huge discrepancy between the two of these, the item (like gold) is very expensive.

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[Rudd-O]

(my employer and government work together to take money out [...]

To be fair, it's not that they "work together" -- it's that the government threatens your employer with punishment (caging, bankruptcy, aggressive violence if necessary).  I wouldn't qualify that as "working together" any more than I would qualify a rapist and his victim as "making love".

As one of my favorite philosopher says: the institution named "State" survives, only because people willfully pretend that the gun in the room isn't there.

[Kuusou]

I can't pay taxes with it. I can't fund my credit card with it. Why do people value Bitcoins at $11 a piece?

I'm sure people have already said this in the comments but you can pay off your credit card with it. All you would do is trade it to someone who thinks it's worth $11 and give that to your credit card company or bank.

It's like saying you can't pay off your credit card with Japanese Yen and asking why people value 79.5 Yen as 1USD. It's a currency used by people somewhere else and it's value fluctuates based on the two markets. It's as simple as that.