Even zimbawe dollars doesn't lose 99,95% of it's value in single day. (19 June 2011 - breach of mtgox servers)
http://bitcoincharts.com/charts/mtgoxUSD#rg360zvztgSzm1g10zm2g25
It never dropped below 4$.
Maybe you are confusing the fact that for one afternoon, a bug (not an hack) in the MtGox site showed a wrong price. But You couldnt buy or sell at that price.
You are also confusing MtGox and Bitcoin.
MtGox is one of the existing exchanges. When It was hacked, several millions were stolen. Still the owner of MtGox decided to take out of his pocket all the funds needed to reimburse the customers.
Bitcoin is indipendent from MtGox. If tomorrow MtGox disappers, Bitcoin will still exist and will still be traded on other exchanges (tradehill.com , bitcoin7.com, and many more)
Tell me one aspect in which paying with bitcoins is more practical than using paypal.
1) Microtransaction: Bitcoin is totally free. No fixed or variable cost. So if I want to give you 1$, you receive 1$. Imagine what could this do to the internet
2) Non refundable transaction: Being in the software business, I had the problem in the past of people buying my downloadable goods, and then asking for a refund. PayPal always fucked me. Bitcoin instead is not refundable.
3) Transaction against PayPal AUP: many services forbid the sale of adult content, or other actions like currency exchange. Bitcoin has no AUP or stupid agreement.
4) Anonymous transactions: WHen you dont want to expose your real name
5) International transfers: if both parties have a bank account, you can send Dollars to Euros paying only 0.4%, all included.
Today, if I want to transfer Euros to my US account, or Dollars To my EU account, I pay 20-30$ plus the conversion fee (1-5%)
6) Token Currency: Bitcoin is a very good framework to build a token payment system. Imagine a USB or NFC key to buy autobus tickets or goods in a vending machine.
7) Mobile Currency: Bitcoin put us one step closer to using our mobile devices as wallets.
Google made a preliminary version:
http://code.google.com/p/bitcoinj/
The fact alone that google believe in this, convinced me to start using Bitcoin.
8) In game Purchases: this is a subset of microtransactions. You can now buy 1$ worth of ingame goods, either from the server or other users!
The last two points might be offensive to some:
9) Tax Evasion: It's undeniable that since government cant track you, then it's easier to elude taxation.
5) Illegal transactions:
http://gawker.com/5805928/the-underground-website-where-you-can-buy-any********imaginable
No, it's called pyramid scheme. It fills all requirements:
-Product being sold has no real value - you're basically exchanging government bonds for real goods
-people who joined early reap most of the profits - like i mentioned earlier, in the US it's thousands times harder to get richer, than it used to be - meaning people who come early to the US could get literally millions of Dollars, keep them stashed, and now sell them as they got more "valuable"
-Government encourages "inviting"/"promoting" - in normal business you try to keep competition away from your product - Governemnt actievly seek out new taxpayers for their system, since without losers paying taxes for them or shops accepting them Dollars would be as worthless as when the system opened.
I fixed it for you
Heck, even you came here and started spamming, as this forum is nowhere near related to topic in question.
I sell webspace for Bitcoin. That's why I'm here.
And I'm sorry you think I'm a spammer.
As evidenced before - single server hack can bring down whole "monetary system" for few days
the network is mathematically secure. Which means that if you could compromise the Bitcoin Network, then you would also be able to enter the Visa or Mastercard network
Oh, i forgot one thing - those "coins" doesn't come out of thin air - as hashes are harder and harder to obtain, mining earnings get close to electricity bills. Of course it doesn't concern nerd basement dwelers whose parent pay the bills, but for people that actually support themselves it's not that profitable - especialy if you count Amortization costs of high-end GPU cards operating at 100% capacity. I have two high-end PCs, one with SLI nVidia cards and tried mining some time ago - bought some WoW subscriptions and shit from it, but temperature in my room was unbeliveably hot after letting it run overnight...
Yes, at the moment mining is unprofitable, and will stay unprofitable until the bitcoin will reach a value of 20$, or if you already have the hardware.
Remember that power can be bought for as low as 0.007 $/kwh, when purchased in bulk (think datacenters close to nuclear power)