The virtual currency
Thinking about virtual currencies in general and bitcoin in particular I believe the concept offers something new and useful. We can totally expect that bitcoin or some other virtual currency to gain significant market share from other currencies in the future. I totally expect that bitcoin minining will become a mass work only, and single users will disappear because of mass mining using bitcoin mining hardware.
The motivation for owning bitcoins is no different than the desire for other commodities like gold. An exchange fund is very probably to appear, and investors will get exposure to the changing value of the commodity without having to actually buy and possess the value.
The problem with such a fund could be that neither the fund nor the bitcoins are tangible, living open issue of exactly what is being bought or sold and who will hold the underlying asset in trust.
There is no doubt that a bitcoin exchange fund would be an effective mean of channeling demand for actual bitcoins. Because investor's money paid into the found in turn require the accumulation of bitcoins to satisfy the terms of the fund, this will reduce the number of bitcoins in the wild, driving the price of bitcoin even higher.
Bitcoin depends on the same cryptography that secures websites to ensure the validity of the currency and payments. It uses peer to peer technology to operate without a central authority. Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world.
