I can get along now without BitCoin currency by using other ones.
But if you will start selling love in BitCoins only - I bet exchange rate for it will skyrocket and the Beatles will need to change "Money can't buy me love"....
Until this happens - BitCoins will be just another e-currency.
I don't mean it would not be used - it will be if a lot of people would be eager to buy/sell it for services.
But I don't understand why it will grow in value?
OK, I've caught up! Thanks for bearing with me.
Broadly, you're quite right. A recurring theme here is that we need to build the economy by providing more and more services - either bitcoin-only or by convincing existing shops to accept bitcoins as well as whatever currency/ies they currently accept.
However, bitcoin does have some advantages that other e-currencies and traditional currencies lack. It's comparatively fast - it can take several days to send funds in a conventional currency from one bank to another in my country (the UK), whereas
international bitcoin transfers are nearly instant (I'd expect it to take an hour or so for any transfers of bitcoins).
A subtle but major advantage is that there is ultimately a fixed and limited supply of bitcoins. With a traditional currency (say, US dollars) the supply of currency can be expanded, devaluing existing holdings. With e-currencies that are pegged to a traditional currency this is true, too. With bitcoins there's a diminishing supply: every 10 minutes or so another 50 bitcoins enter the money supply, for the next few years. Then it's 25 bitcoins every 10 minutes, then... until, once 21 million bitcoins are circulating, the supply stops increasing. That's a large factor in why bitcoins grow in value (relative to other currencies) - because the number is limited, and the supply of other currencies is generally assumed to increase every so often (devaluing those currencies).
Finally: we all expect bitcoins to grow in value. But that's a long term bet. Recently we've seen a few months where bitcoin fell against the dollar fairly consistently. It's picked up now, but don't regard anything I say as investment advice!
