A currency has no value unless there's some utility to the currency. Currency is a way to facilitate the exchange of goods and services, and if goods and services aren't being traded, there's no need for the currency. Currently, the only utility of BTC is the ability to double your money by sitting there and doing nothing. Eventually this will come to an end as people realize that the BTC economy is backed by nothing but pure speculation. BTC needs more uses if it wants to continue; more shops and more vendors needs to accept BTC. Just because BTC is freely exchangeable doesn't mean anything, there need to be services that lend itself to that free exchangeability or it all means nothing.
Isn't that the point? BTC has value as it is freely exchangeable. Speculation will come to an end eventually and utility will take over.
That makes no sense; speculation arises only because there is instability, and the instability is created because there's nothing that gives the BTC economy any real value. Speculation is a mechanism that is supposed to stabilize an economy, and when speculation becomes out of control, there's a systemic problem with the economy. Just because BTC is freely exchangeable doesn't mean a thing. BTC is open source, so there's nothing stopping me from copying the source code of BTC, naming it something else, and starting my own currency. This currency wouldn't be worth anything for obvious reasons, unless I made it worth something by making it a currency that just couldn't be ignored. This is what needs to happen to BTC, or else it will crash and burn. Currency is supposed to facilitate trade, and when trade is not supporting an entire currency, it has no value. Eventually the market will begin to realize this, and BTC will go up in flames, unless people get their acts together and come up with good ideas to support the BTC economy.
