You bring up a good point, in how most dollars are "virtual". And indeed, we have seen the same kind of "virtual" bitcoins, where exchanges traded bitcoins that

You bring up a good point, in how most dollars are "virtual". And indeed, we have seen the same kind of "virtual" bitcoins, where exchanges traded bitcoins that didn't exist in the blockchain (Mt Gox did this for a while). Again, this sort of "virtual" currency (more technically, M2 currency), is something that you can build on top of bitcoin, and something I don't think that the bitcoin protocol itself needs to build, since we already have it. http://en.wikipedia.org/wiki/M2_%28economics%29#Empirical_measures http://en.wikipedia.org/wiki/M2_%28economics%29#Empirical_me...