>What the heck are Bitcoins? Have you heard of this "money" phenomenon?
>
>http://www.businessinsider.com/presentation-what-is-bitcoin-2013-3#


They are a fixed system where only a known number of "coins" could physically exist, each mathematically known and provable for authentication (due to the high amount of computing required to build each one). It is a method of removing banks from the money equation by exchanging bitcoins directly point-to-point across the Internet. Anonymity is maintained because you can change your public key after every transaction, and while the public key is known, it's not known who belongs to each public key.

It's a way to:
(1) guard against inflation,
(2) remove the ability of banks to control money supplies,
(3) remove the ability of banks to influence money supplies,
(4) to allow people in every country to transact business using a common currency,
(5) to allow people in every country to transact business anonymously,
(6) to allow people in every country to transact business securely.

The only real issues are:
(1) The amount of compute time required to generate the coins into the system. It will take years to get them all generated. However, they are also introduced at a known rate so it's not going to impact the value of other coins in the system. And once they're all generated (around 2040??) that will be all that exist forever, so no inflation, and possibly deflation because of (2):
(2) If people die and they don't pass on their bitcoin encryption key passwords to their families or business interests, those coins are forever "lost" in the system (at least until someone can break the encryption (which will theoretically take years on big computers)). While that is a gain for those with coins in the system because each of their coins have gone up in value, it is a loss for the decdent's family or heirs because any value the decedent had in bitcoins is inaccessible without the key.
(3) The same as in (2) could theoretically happen were a user to lose their hard drive without a backup or remembering the method of accessing their keys.

Many people believe because of (2) and (3) being real possibilities, that such things won't happen very often because people will recognize the importance of NOT doing those things.