An expert on digital currencies from Ernst & Young claimed that Bitcoin doesn’t have to replace normal currency to have a future. The expert described a number of myths around the currency, one of which was its position as a replacement for “fiat” money.

Fiat currency is essentially currency the government decrees to be legal tender. And Bitcoin was obviously not created as a replacement for fiat currency. There are many people talking about how Bitcoin is going to take over, or how it doesn’t have the properties lending to it being used widely. The currency was really created to be used in electronic commerce and for micro transactions. If you remember this, the future risks for the currency take on a different shape. At the moment, many experts are concerned with such problems as price volatility and the deflationary nature of Bitcoin. Since there will only ever be 21 million Bitcoins, it has led some to fear that the currency will have a “deflationary” element, leading to each unit getting more valuable over time.

Deflation is usually blamed for the “lost decade” in Japan, and Ernst & Young emphasized that it adheres to the mainstream economic view that mild positive inflation is healthy for a national currency. However, when talking about using Bitcoin as an ecommerce tool, deflation seems to be not necessarily problematic.

Instead, the experts highlighted problems of speed and fraud control as the most pressing priorities for the virtual currency. To prevent fraud, the Bitcoin network has to “confirm” transactions every ten minutes. This is one of the weaknesses with Bitcoin – the problem is that you generally have to wait for 5 to 6 transaction confirmations before making sure that your money hasn’t been spent twice, which can take up to 40 or 50 minutes.

Some businesses have decided that speed is worth the risk. One pub in London takes Bitcoin and accepts unconfirmed transactions as payment, for example. However, not every retailer is able to that – especially if they are selling goods more expensive than beer.

Ernst & Young believes that there are definite possible gains in Bitcoin, in terms of lowered transaction costs. On the other side, there are also some significant negatives, in terms of accountability and how to deal with anonymous users and how to regulate in the market.

As it stands, the Bitcoin market is quite volatile - what happened in China recently is proof. Having said that, I believe Bitcoin will only rise in value, as it rarity and mining effort increases.

Bitcoin is dangerous. It's easy to invest and easy to make some money off of a spike, but just as easy to lose half your value.

the early jumpers are lucky lot....
it can give competition but where is the volume ?

With the incredible fluctuations bitcoin has experienced in recent times, it can be a huge money spinner, or a massive debt maker. Its very unstable and risky. I personally dont use it as a result

You are right. Bit coin is just for using to earn more in business but it is not a currency of future. I think, use of it will finished in two or three years.
http://www.forextrading.pk/open-mark...ency-rates.php

I've never used the Bitcoin currency before. I might read a little about it at some point in time though. I've been hearing a lot of news about it lately.

I've used Bitcoins as a form of payment several times and it was simple and quite easy to use, the good thing about Bitcoins is that you could use it from any digital device, you can buy things and pay via your smartphone by logging in to your wallet and pay from it, I can see that becoming more popular in the near future maybe when the currency gets more public exposure(a lot of people has yet to hear the term 'bitcoins' or to know what it represents) and becomes more stable, stability might be achieved when it reaches the mining limit but of course I'm not sure about that, the bad thing about it is waiting for confirmations and currently its volatility, you can just wake up the next morning to find out you lost 70% of your coins value which is really disturbing, that hard earned money just evaporated.
When it comes to confirmations I think if you are just buying a pack of chips or a beer no confirmations is ok but when you are buying a car or a house then they should wait for several confirmations to make sure everything is in the clear. but anyhow luckily no one is forcing anyone to use it, its just a secondary method you could use, even if some vendor only accepts Bitcoins or the only payment method you have available is bitcoins, you could just buy coins right before the purchase and immediately spend it on that vendor, that way you basically got what you wanted and didn't have to risk losing any value of your money thats what I actually do when I pay for anything via Bitcoins.

EDIT: I forgot to mention that due to the currency anonymity, it could be abused by criminals to conduct their shady deals, which is also a concern I would say.