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I think the real question now is, whether Bitcoin can be stopped.

For example, banks are "not feeling comfortable", since more fiat money are being extracted from their money network and put into BTC network. For example, I took about half of my savings and bought bitcoins - all my bank can see is, that the money "vanished", and they can't collect any more fees from services they could offer me handling those money. Actually, no bank knows where the value now is, since I made a lot of BTC transactions since then.

It's same with the wealthy people - yes, they will not feel comfortable about the idea that other individuals will own most wealth in the future. But what can they do about it? It's like today: most people are not comfortable with the fact that just a few individuals or their families control 90% of the total wealth, but that is about all they can do, feel uncomfortable about it.

With bitcoin it's similar, it's not that bitcoin will succeed only by making banks and rich people comfortable, bitcoin might succeed despite that.

Also, I realized an interesting property about the BTC network, which is not talked about much. Namely, people who invested into BTC, do not have much incentive to do damage to the network, since that would only cause the BTC value to go down, and they would incur loses to themselves - they will realize, that by behaving "properly" they can gain more.

It's more possible that some hostile government or other entity will try to sink bitcoin, but it might be hard to achieve. And if their attack will not be very quick, the BTC owners can detect that something is wrong, and could quickly transfer the money to alternative cryptocurrency.

That money didn't "vanish". You paid someone for those coins, and that person put their money into a bank.

> For example, I took about half of my savings and bought bitcoins - all my bank can see is, that the money "vanished"

Nope. Your bank can see that that money was transferred out of your bank account and where it went -- quite likely, to another bank account (possibly, even, at the same bank -- so many of them being global institutions).

Currency isn't consumed when its used to buy things, whether its a car or a bitcoin.

I don't think banks are at all uncomfortable about the decision of a few people to buy Bitcoins.

You could have bought the entire stock of BTC ever produced at the highest rate ever paid for a Bitcoin on an exchange, for less than 0.5% of the excess reserves held by banks in the US alone. That's the reserves the banks don't need to be legally compliant and solvent, and those reserves are themselves a tiny fraction of the banks' outstanding loans which is where they actually earn their money. So the banks don't exactly see BTC as a threat, especially since retail banking operations aren't exactly a major profit centre for them.

And, as someone has correctly pointed out, your hard-earned savings that you're risking went into the bank account of the person you bought Bitcoins from, therefore staying in the banking system anyway.

Bitcoin, on the other hand, lacks the solvency guarantees the banking system does: if people decide they want to leave en masse, the price crashes. Even if BTC owners will be able to "quickly transfer the money to alternative cryptocurrency", if their government (or the US government) decides to effectively ban Bitcoin transfers, it's certain they will end up able to purchase less than they were prior to the attack.

May I politely suggest you reconsider your decision to put half your savings into BTC before it's too late.

Because it's not like a small percentage of the population owns a disproportionate amount of the capital already right?

If it weren't for the early miners, who believed in the currency enough to invest time and money in machines to mine them, I don't think there would be Bitcoin wealth to distribute...

If this is your belief, there are plenty of Altcoins trading for < $0.25 that you can buy up now and have this theory work to your advantage.

The problem is nobody wants to be the first to leap(it's very human to avoid risk); they wait first for social confirmation but in doing so, lose their advantage.

I suggest you read about coin coloring and take a closer look at the altcoins.

> The fundamental problem of Bitcoin is the massive number that were accumulated when they were cheap. [...] The problem with Bitcoin being a major currency is that the early miners have accumulated large portions of the total share of Bitcoin wealth.

Should (yet another) digital currency be created to address this issue? Imagine if every person on earth was assigned an equal amount of such a digital currency (ignore the infeasibility). Would that be a healthier market?

You whole argument is based on the premise that these early miners have not already sold Bitcoin and still hold it. Besides, even if they were holding it, the market could not absorb them selling it all at once so those miners would be very wise to sell slowly over time and at the demand.

In my opinion I think most of the early miners have already cashed out and what we are seeing now is the exchange of already "used" bitcoins.

There are millions of bitcoin that have never changed hands.

I am not claiming you are wrong by asking, I am genuinely curious, how do you know?

People have analyzed the blockchain. Here is a paper that discusses an only somewhat out of date analysis:

http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf

So in April of this year, 64% of bitcoin had never traded hands and there were about 4 million bitcoins circulating.

I also think it is fairly likely that there are people monitoring the 'Satoshi addresses'.

I'm not an economist, I don't see why this is a deal breaking issue. Could you please elaborate?

If they spend or trade the coins, then they are distributed, if they do not, then its just cash under a mattress.

Additionally, it seems to me that a trillion USD "worth" of bitcoin is only a theoretical trillion seeing as there aren't any institutions capable of (or willing to) cash such a sum.

People who are wealthy today but don't own bitcoins have little incentive to welcome the bitcoin nouveau riche to their ranks. Typically when you swap out old pesos for new pesos, you have a fixed exchange rate such that the rich stay rich and the poor stay poor.

> The problem with Bitcoin being a major currency is that the early miners have accumulated large portions [...] That's a fundamental problem that does not exist with fiat currency like money

You have identified this as a problem without explaining why it is a problem. Can you elaborate?

If it is true that a large proportion of bitcoins belong to s a small number of people it has some pretty extreme consequences. It puts the effective monetary policy of bitcoin in the hands of random individuals. If they want the value to go down they can sell more, if they want it to go up they can sell less. Controlling that amount of the market makes them a defacto mint. That is a worrying scenario. It also is a complete opposite of the decentralization that bitcoin is supposed to represent.

It could be argued that in the long term it simply does not matter:

http://en.wikipedia.org/wiki/Coase_theorem

Luckily Bitcoin's success does not depend on the banks 'feeling comfortable' with it.

Weren't there some attempts to regulate?

Could I transfer my Pogs anywhere in the world, in a matter of minutes, for an incredibly small fee? Were Pogs also a distributed public ledger? Was there any reason to use Pogs over the dollar?

If the answer is 'No', maybe you should re-think your position.

The amazing thing about Bitcoin is the network. Saying it's "the new pogs" shows a huge lack of understanding of what Bitcoin is.