[jmj4]

Fiat currency is valueless and can only be used because people trust the government issuing it. If Bitcoin can gain the trust of enough people, it can easily become more 'valuable' then many currencies in existence at the moment.

[XorNot]

Fiat currency is backed by the legal obligations of the country that issues it that it is a suitable means to extinguish debts.

Bitcoin is not. No one is obliged to accept Bitcoin as a currency for settling debts anywhere in the world, it has to be converted to something else. Similarly to gold - you don't have to accept gold as payment for debt, but you do have to accept USD.

This is where the problem lies: BTC acts like a commodity, not a fiat currency - and people are treating it like one buying into it. The problem is it has no value as a commodity other then being Bitcoin.

[toozap]

It does have value. It's long lasting, pseudonymous, secure, and it costs less to make transfers between two parties. These are qualities that are hard to find in a physical commodity. What gives value to an individual bitcoin is the Bitcoin network. There is real value there.