Every time when I read about the Bitcoin there are two things I can not understand (and that's why I do not own Bitcoins currently):
1) How it can become the currency of the future if it has such volatility? Even If it will only rise and never fall - who needs such a currency?
2) Is it any better than any of the alternatives? If it will be too pricey - somebody can just create a new cryptocurrency and there are already several clones on the market currently.
There are many parallels with Tesla and Bitcoin. Skeptics ask, "How can Tesla become the car of the future if there are no charging stations around?" Clearly (to the well informed TMC member) a massive infrastructure doesn't pop up over night. Early adopters take a minor hit, but because they believe in the product they help lay the foundation. With progress, MS and later models can become viable products for everyone with no shortcomings. At that point it will be too late to cash in on the brunt of Tesla's growth potential.
With Bitcoin, it is still very much in the growth stages but it continues to reach major milestones and gather traction. Early adopters must deal with the volatility but there are many die hard fans that believe in it's potential. Many early adopters have already been rewarded handsomely for their loyalty (I happen to know a Bitcoin millionaire very well... he introduced me to Bitcoin, I in turn introduced him to Tesla!) As the market cap continues to grow, as more businesses and consumers adopt the technology, and as the Bitcoin securities market matures with more complex hedging vehicles the price will greatly stabilize. But that stabilization price might be $10,000 or higher. BTC has a current market cap of around $1 Billion, if it captures even small percentages of the markets where it can be incredibly useful (internet purchases, wealth storage, international money transfers etc) that value could easily grow to 100 billion. Check out this interesting Bitcoin Value calculator and article by TechCrunch:
http://techcrunch.com/2013/06/02/calculating-the-long-term-value-of-a-bitcoin/
"Who needs such a currency?" I'm sure everyone in Cyprus wishes they had heard of Bitcoin before the government decided to freeze bank accounts and seize peoples savings. Granted, I know it is speculated that a lot of that money was dirty Russian money, it still marks a scary precedent. Pretty much any citizen whose government practices currency manipulation would benefit from Bitcoin. And these countries are precisely where we are seeing high adoption rates of BTC. Argentina's adoption rate skyrocketed this past month and it is growing quickly in China as well. If you live in the US, don't think you are immune from government asset seizure, look at this ridiculous government seizure of $80 million in gold coins from a law abiding family
http://www.economicpolicyjournal.com/2013/07/feds-seize-gold-coins-worth-80-million.html. I don't want to write a book, so I'll stop with that one reason to own Bitcoin, but there are countless other compelling reasons to deal in Bitcoin -- ultra low transaction fees, no chargebacks, instant international money transfers, micro transactions, decentralized, adaptability, and this list goes on.
It is a risk that a better crypto currency will come along, but as I have stated Bitcoin has gathered a lot of traction. Unless there is a fatal design flaw, I predict that Bitcoin will be the winner. But even if there is minor default in the client coding, the client software can be updated and the blockchain can fork (already happened actually). The anonymous creator of Bitcoin, going by the pseudonym Satoshi Nakamoto, is a visionary much like Elon in that he was able to look 5 steps into the future and create something that redefines an entire market.
