Hi,
I learned about Bit today. Absolutely fascinating concept. One thing I thought could potentially be a problem though is if many people will start to hoard bitcoins for investment purposes. Since the bitcoins already are a scarce resource, a lot of hoarding will make them even more scarce. This will make the bitcoin value increase. Large investors can collect a huge number of bitcoins, wait a while until the value goes up, and then quickly sell all their bitcoins at a high value which in turn will cause the bitcoin value to go down. Then they buy a large amount of bitcoins again at the lower value and repeat the cycle. In this way large investors, or crowdsourcing of investors can 'pump' money out of the bitcoin market.
If people realize, as you did, that bitcoins have value then they will want to hold them. That much is right.
It is a convenient abstraction to think of there being 'a price' for something, but actually there are just offers to buy and sell. In markets with lots of players and good liquidity the highest bid and lowest ask are close together. This is often true of the Bitcoin market at MtGox now. However, when a large sale is made these diverge. You cannot sell an unlimited amount without dropping the price, and you cannot buy back automatically at this low price, new offers will need to be made.
Manipulating markets is costly. It can be very profitable if you can pay the price with someone else's money and profit with your own, but there is no magic riskless money to be made outside of that.
