We could use shiny stones as currency if enough people agreed it had value.
I think you are thinking about currency within the confines of the current system (eg government, laws etc). What I am saying is that government and laws are only valid in our collective imaginations and therefore everything is imaginary and made up (the USD is just as imaginary as bitcoin, it's just that more people believe in the USD so it is mainstream) and we can collectively apply value to anything want to and remove value from anything we want to.
It's basically gold if arbitrary bits of gold could be sent via email.
Bitcoin probably wouldn't have taken off at all if the financial markets were quite so desperate for new toys to speculate with. Bitcoin is the bastard step-child of low interest rates.
It's massively exposed to the threat of financial regulation, too. If the US government suddenly decided that it was going to assume bitcoin transfers are the result of money laundering until proven otherwise and that it's a consumer product that you have to pay sales tax on, its value would plummet to embarrassing depths.