Quote from: J603 on July 22, 2013, 07:12:45 PM

Now currencies are backed by assets and the state of the economy.

This suggests you misunderstand the actual nature of fiat money. I can go into more detail if you like.

You asked two very distinct questions, I'll start with "Why will Bitcoin succeed?"

Obviously, these are still early days, and I wouldn't pretend Bitcoin's success is a guarantee. Since you're looking to invest I'll start by warning you that there's still a lot of risk and unknowns here.

That being said, what is bitcoin good for right now?

- Safe, irreversible online payments, from $0.005-$1G in value, at fees that are flat and a minuscule fraction of those imposed by paypal and credit card companies.
- You don't have to trust the other party with more than what you're spending. With a credit card, any dishonest merchant can start using your card to buy things in your name.
- Completely anonymous (if you're careful), unseizable, no geographical limitations (Half the world pretty much can't use credit cards online right now because they're considered fraud risks)

These are properties inherent in Bitcoin that give it an edge over currencies, right now. Some other cool stuff is coming down the pipeline, but isn't really usable yet.

You'll notice most of your examples as to why Bitcoin isn't better than fiat are not inherent to the respective currencies. Acceptance of currencies does change, sometimes dramatically (Many countries have seen their citizens completely refuse using the national currency, switching to dollars or euros instead). Bitcoiners are betting on the fact that a currency whose properties as a means of exchange are inherently better will eventually displace fiat currency, fixing the acceptance problem. Think of it this way: Bitcoin has barely had a chance to prove itself yet and has no big players (states, companies, banks) backing it in any real way, and already many people around the world are willing to accept it for payment. Doesn't that say something about its practical value?

The only things at which fiat currency is inherently superior is:
- You can pay your taxes with it.
- It doesn't require a network to actually work.

I think in the long run (20+ years) the advantages are so stacked in favor of Bitcoin (especially online) that it's a likely outcome that it will be directly competing with (if not replacing) national currencies.