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History Repeats
In the Depression, many small towns created Wooden Nickles, as the townsfolk needed to buy & sell, but there was no cash.
In the 70's & 80's somebody (we'll call X), in a major city would start a barter currency. You agreed with someone to trade a service or goods. The advertising business was the model for this trading ads for restaurant meals. As with most transactions, you might have a trade imbalance, i.e. a car for x number of haircuts. If you didn't want haircuts, you took trade dollars. Transactions went through X for a 2% fee. You could also buy trade dollars. X always seem to print money for himself and counterfeiting was also a problem. These barter services usually folded in a year or two.
Then somebody had Real Dollars, that usually were in tourist or college towns. The idea was to show the money was helping to show money circulating in the town rather than hoarding or being spent out of town. But like Disney Money, people saved them for the pretty pictures on them. Real Dollars are gone, just like so many topless bars that printed their own currency.
As for BitCoins, I looked yesterday at a site that severely limited how many you could buy a month (probably they had a small supply). This makes it difficult if you need some to make a major purchase now. Other problem, since you really don't know who you're dealing with, opposed to PayPal or a postal address, they burn you, there's no recourse.
Lastly, the claim of there will be only 21,000,000 created. If BitCoin takes off, they will go up in value as more people need them. At some point they will become so valuable, most people can't afford them and the market will collapse or suddenly more will be created causing deflation.
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