3) With regards to the pyramid scheme argument, how is this different then taking risk investing in an up and coming company?
The difference is a company does things to generate profit. Bitcoins just sit there.
You buy the stock hoping they will be able to make a larger profit in the future. You buy bitcoins hoping somebody else will be willing to pay more for them in the future.
Can you see the difference now?
There are plenty of derivatives that are tied to the value of a company or something similar but you don't actually own part of the company. These derivatives are simply gambling. No one claims they are a pyramid scheme.
Gold is also the same way. It just sits there. It's value is priced way above it's actual utility as a metal for industrial use. People think it's valuable because people have always considered it valuable and it is scarce.
There is a difference between rewarding the early adopters who take the biggest risk and a pyramid scheme. The claims of a pyramid scheme are made by people who are bitter and didn't take the risk on bitcoins sooner.
Bitcoins don't *have* to continue to appreciate to be useful. And it is their usefulness which is currently giving them value. No, they aren't quite useful as a currency for buying things yet. But they *are* useful as an inflation-proof store of value, which Europe is beginning to realize.