There is an effort mostly led by the Chinese to establish a new global currency that is really less than a wet dream at the moment. They hope to use Special Drawing Rights with the International Monetary Fund. It will be interesting to see what the long run future of nongovernmental currency is. The nice thing about governmental currencies is that there is an incentive for governments to maintain the value of their currency so that they can maintain their credit ratings, it has never been made clear to me what enforces the discipline of nongovernmental issues of currency. A funny thing about this digital currency is that the creators seem to think that it should guard against inflation because there is no central bank involved. It's true that central banks can create inflation, but not that inflation is only a phenomenon caused by central banks. Central banks tend to make inflation and deflation more predictable, predictability is usually considered a positive quality in a currency. This currency could change value rapidly if it became more popular, and would probably fluctuate a lot in sync with the financial cycles.
As it is a finite resource, wouldn't bitcoin's value behave in a way similar to a precious metal? I just did a little bit of looking into digital gold. According to Wikipedia, all issuers of DG keep actual bullion on hand that is equal to the amount of DG they 'print'. However, the big difference I see between BTC and DG, is that DG could be issued without the gold to back it if the providers decided to change their scheme. New BTCs (aside from the ~21M) can't be issued by their very nature. For that reason alone, I'm not sure which I trust more. -Which is pretty funny, considering how arbitrary BTCs creation was.
;) I bought $5 worth. We just had a lottery around here last week that reached $300M. My wife and I bought 5 tickets, just so we could dream about our minuscule chances for astronomic wealth for a couple of days. My guess is that $5 in BTC is a safer bet, and at least it won't be dispelled as quickly.
It has been an exciting year for bitcoin. Do you still have your $5 stake? It should be worth over a grand by now.
That $5 was lost when the exchange I was using was "hacked". I forgot the name of it, but I think the owner just stole it. At any rate, I bought more when they were ~$13. That's done well. But geez, I wish I could go back to when I first posted this. I could retire if I wanted to. :)