This post is infected by the post that came shortly before it.
Though the bitcoin experiment has some interesting core ideas I do not believe it has a substantial role as an alternative currencies. It is drawing a wrong kind of attention and people to it.
Update: May 4th 2013
Bitcoins is an excellent demonstration of a disconnect between technology and life. It is an awesome example of a secure way to print money – security that is derived from the fact that everyone in the network participates in it in such a way that no single individual can match the community effort. It exemplifies freedom and empowerment that can be derived from technology.
Yet, when it comes to it being a currency, it is completely devoid of value. It has no real-world backing. Its current popularity is not derived from it’s own characteristics but from the shortcomings of existing currency systems.
In this sense it reminds of organics gardening – another negatively defined concept: not using poisonous chemicals to grow food. Yet organic farming can be as destructive to soils (in its own way) as industrialized agriculture, and consequently as nutritionally poor (remember it didn’t set out to make good food, it set out to make food without poisonous chemicals).
In a similar way Bitcoin has a value vacuum. It’s an algorithm that squirts out data. The story being attached to it is an empty one … it is infested with malcontent rather then with an alternative vision. Another example of intellect run amok.
I should probably correct myself and say that Bitcoin HAD a value vacuum. Vacuums tend to fill … and this one is quickly drawing in another story and another crowd: capitalism. The gift that bitcoin was is being twisted into another taking machine.