PeterZ

Using electricity doesn't mean that what I create has value. I could run some random algorithm, it doesn't make the result valuable because I used electricity. The same way that digging random holes in the ground doesn't make that work valuable. I agree with you that what make bitcoin valuable is the adoption by people, and the trust they have in the currency. In that way, it is no different than the US dollar. It is pragmatic mass delusion. Personally, I think that crypto-currencies will fail because most people are not smart enough to understand the technology and to properly secure their accounts. I see too many people who owns bitcoins and don't understand what are the private and public keys, or they make a mistake and send bitcoins to an unknown account. It difficult to trust something you don't understand and that's why I think it will not be easily adopted by the masses. A bubble is when speculative buying outweighs fundamental buying by a large margin. In other words, most people buy because of the price increase, and the price increases because more people buy. This happened with the property bubble (with the help of mortgage companies who lowered their standards and the government who back them up). Compared to fiat currencies : - Similarities : The value is a function of mass adoption and trust. Easy transactions. - Difference : The final supply is fixed and not centrally controlled. Compared to gold : - Similarities : The final supply is limited and not centrally controlled. It is 'mined'. - Differences : It is purely virtual. You cannot do anything else than using it has money. You cannot hide the private key. It depends on the crypto-currency we are talking about, but the simple way to see it is that mining is the creation of a piece of original data that has particular characteristics (proof-of-work) and that can be exchanged after it has been created. The algorithm used for mining has to be open source and agreed upon by the community, similarly to an open standard. Mining is considered energy/time consuming because the proof-of-work is hard to obtain (mathematically speaking). For example, bitcoin requires that the result of a data going through a specific hashing function (I believe it's SHA-256) has a certain number of leading zeros, which is a very difficult problem to solve. Nope, unless you possess a very large percentage of the total number of ledgers. It's not really near-instantaneous anymore, because the number of transactions have increased by a lot. For most people, it seems it is near-instantaneous because when you check your account online, you are checking the local ledger who already integrated the transactions, but I've heard some people complaining it took a few hours/days to get their bitcoins. I'm in the same mindset. I prefer to focus on concrete things and skills that have value for me and my family. One of the experience that made me realize that bitcoin is likely a bubble is when my dentist (who has no experience in finance or technology) told me to buy bitcoin. We talked about it and she didn't know about the private/public keys. She didn't secure her account with a paper wallet or hardware wallet. She didn't know that if coinbase gets hacked, she will loose all of her money, and it's irreversible ... And she didn't know that government cannot control the crypto-currency, but they can control the exchanges. Anyway, she didn't know much and I've realized most new bitcoin fans don't know much either.

How can bitcoin have value if I can create my own crypto-currency with the same technology ? I understand that what makes something valuable is the high demand for it, but I fail to see how something virtual created out of nothing can have this much value. Bubble again ?

That result doesn't seem surprising. There are, technically speaking, an infinite number of ways to communicate information using english words. If they don't constraint the learning algorithm to use proper english, it will surely drift an use another language.