I was initially not a Bitcoin fan. But I saw Fred Ehrsam (one of the founders of Coinbase) speak at SXSW, and it's clear that he gets it: he said one of the big

I was initially not a Bitcoin fan. But I saw Fred Ehrsam (one of the founders of Coinbase) speak at SXSW, and it's clear that he gets it: he said one of the biggest things harming perception of Bitcoin is that the media keeps calling it a "currency", which it clearly is not. He seems to view it as a better transaction process that's more efficient than credit cards (the justification being that a credit card transaction cost is 1.5-3.0%, while Bitcoin is closer to 0.5-1.0%). Viewed in this manner, Bitcoin starts to make sense to me. When all you're doing for a transaction is USD->BTC->USD, it doesn't matter what the price or volatility of BTC is. You're buying $30 worth of BTC which the seller is going to almost immediately convert it back to USD. It's cheaper than credit cards for two reasons: one, the risk of loss in the event a vendor is compromised is limited to the amount of the transaction, and two, the blockchain makes it really easy to automate transaction auditing. Ehrsam was also pretty adamant that Bitcoin isn't a way around existing laws. The first generation of Bitcoin firms were run by amateurs; the second gen (which he considered Coinbase a part of) are run by people who have spent their lives working in banking and securities. This means they will operate a lot more like banks, which includes complying with all the legal regulations as well as the operational processes like outside auditing and information security. This also means that governments will still be able to restrict the flow of Bitcoin: if China decides that BTC->CNY transactions are forbidden, no trustworthy Bitcoin exchange is going to process them. Any that do are likely to be flagged as money laundering operations by the US Govt which will make it very hard for them to do business with a legitimate bank. Again, when you look at it like this, Bitcoin is a disruptive new technology -- but it's not revolutionary. As always, the guys making the big money in a gold rush aren't the gold miners, it's the guys selling the shovels...