The question is, can we build the ability to switch cryptographic building blocks into Bitcoin? Wouldn't that be the equivalent of switching from one currency

The question is, can we build the ability to switch cryptographic building blocks into Bitcoin? Wouldn't that be the equivalent of switching from one currency to another, like the manner in which the Eurozone nations switched from their national currencies (the franc, deutschmark, drachma, lira, etc.) to the euro? In order to ensure an orderly transition, you'd need to address the issue that bitcoins' perceived "value" (for want of a better word) is derived from the fact that it is (increasingly) difficult to mine bitcoins. If the new currency is easier to mine, how would you bring the old and new currencies into synch? Trying to synch with a new crypto-currency which has a different coin creation rate (and a different rate of change in the difficulty of creating coins) seems like a recipe for wild fluctuations in value. To my mind, Bitcoin is more like a virtual commodity than a currency, except for the fact that it has no intrinsic value. Even gold has intrinsic value for electronics and aerospace applications. One can argue that a bitcoin has even less intrinsic value than a fiat currency because it's not legal tender, so it can't even be used to settle debts or pay taxes. Some might say that it has negative intrinsic value because, in order to create a bitcoin, you have to expend many CPU hours doing the mining. Ultimately, that's incredibly inefficient - see http://goo.gl/I34VL http://goo.gl/I34VL The obvious intrinsic value for a virtual commodity is CPU hours - i.e. the expenditure of resources to some useful end (or, at least, an end that someone is willing to pay in order to achieve), that can not only be delivered internationally and anonymously, but can be distributed across multiple CPUs provided by, for example, the members of a p2p network. You could then build a "CPU-backed" currency, where the issuers promise to pay the bearer X CPU hours on demand. Of course, you then have the question of whether the issuer of a "CPU note" can be relied upon to actually deliver said CPU hours when presented with a note. Notes could end up being valued in a manner similar to bonds, where less credit-worthy issuers' (e.g. fly-by-night operations based in China or Eastern Europe) notes would be discounted relative to those issued by blue chips (e.g. IBM, Amazon). Ultimately, though, the value of a currency whose value is based on a commodity will be determined by the fiat currency cost of the resources required to generate that commodity. The only way you could escape would be if the virtual currency were to become more liquid than the fiat currencies. In that scenario, the virtual currency would become a benchmark, in the same way that, for example, the price of US or German government bonds are actually derived from the price of the bond futures because the futures markets are more liquid and actively traded. Given that the global foreign exchange market is the deepest and most liquid market in the world, that objective would seem to be a long way away.