It's a little slippery IRL - blocks in bitcoin are mined and the mined blocks are representations of value - at least within the blockchain itself. You could argue that the blockchain itself does represent value. The value of the mined blocks now is 25btc since the reward was halved.
Blocks can't be made outside the process of mining and any btc you hold come from a block that's been mined.
How that's represented in fiat is another problem :)
Privacy is privacy - you don't know how important it is until you don't have it.
The main payment processors operate a mafia of sorts - it's a closed shop - tx fees are fixed and determined by them. One aspect of bitcoin is that is allows the person sending a payment & the person processing that payment (the mining pools) to negotiate the price.
The theory being that transactions with a better tx fee will be included in blocks quicker than those that don't.
By freeing up these aspects of the systems we use to send & receive payment - you allow other forces to come into play.
Bitcoin is slow - the accepted "confirmation" for a payment is 6 confirmations - best case (a tx just before a block is formed and it's included in the block) it'll take an hour. Worst case it's a couple of hours.
If you're sane and keep backups then your wallet is safe..
Your HD crashes and you don't have backup.. bye bye funds.
Bitcoin in many ways is equiv to cash - just electronic - it's an anon as cash is, as mutable as cash and prone to loss if you don't take care of it.
I like it - as a concept it has some nice attributes.
Mtgox wishes it was a bank :)
They ask for the docco for AML (trading) requirements - so they're not shifting the 5M btc that they've processed to dodgy criminal types - like lawyers & politicos :)
lol - take a moment to look at https://en.bitcoin.it/wiki/Trade - there's rather a substantial list.
You know that Wordpress now accepts btc as payment for addons for their blog hosted service?
Blocks can't be made outside the process of mining and any btc you hold come from a block that's been mined.
How that's represented in fiat is another problem :)