OK, FWIW, here's my take on Bitcoin as you asked, Kevin. May be an hour late, but I hope not a pound short - - -
While Bitcoin and its many other relatives (see below) are each individually limited by math -- as far as we know -- the aggregate supply of cryptocoins may be virtually unlimited. The prognosis isn't good: The aggregate is what counts and since it is, for all intents and purposes, unlimited, as the aggregate supply approaches infinity, the value approaches zero. Otherwise experienced as "inflation." Massive inflation.
There are at least three useful historical precedents I'm aware of: The use of private bills of credit and/or exchange notes beginning with the Tang Dynasty in China -- and the use of "assignats" and then "mandats" too in the aftermath of the French Revolution during the last decade of the 18th Century. The third is a surprise.
In the follow-on to the Tang Dynasty, the paper notes in China became so common that, by the law of supply and demand, in aggregate, most lost most or all value.
While misunderstood by most people, such a disruption in the medium of exchange is more devastating to more people than any natural disaster could ever be. With the possible exception of the next eruption of the Yellowstone caldera or another Yucatan meteorite strike.
As a result, the Chinese eliminated paper money entirely in 1455.
In the French experience, the legislature, despite experience with John Law's "Mississippi Bubble," 70 years before, put paper "assignats" into circulation, supposedly based on and limited by land. The politicians couldn't control themselves of course, and kept issuing more and more assignats, which caused inflation. They then got the idea of getting the "excess" assignats out of circulation by issuing a substitute, called "mandats" and getting people to trade in their "assignats" for them. This was called an "interconvertibility scheme," and, predictability, both stayed in circulation despite the plan. The increased aggregate supply meant that the inflation continued.
The surprise example was the 13 British North American colonies before the First American Revolution. The colonial governments got in the habit of issuing "Bills of Credit" -- essentially paper I.O.U.s -- which then circulated within the colony and it became customary to use them as money. The Colonial Governments, not understanding the danger -- or not worrying about it -- got in the habit of issuing these to cover expenses. Predictably this led to, you guessed it, "inflation."
This result was so disruptive to all the colonies that all 13, individually, came to realize how undesirable it was and, even before the Revolution, stopped the practice.
In fact, this history was so memorable that preventions found their way into the U.S. Constitution in Clause 1. Particularly, "No State shall ...emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;"
Thus "interconvertibility schemes" in all forms are, I think (but I've been wrong before), the ultimate Achilles heel of cryptocoins in general. They may be different in name, but they can all be used as very similar media of exchange -- which, by the Law of Supply and Demand, will likely EVENTUALLY make them pretty much worthless.
Another short-coming of Bitcoin in particular is that the total anonymity built into the algoritm wasn't implemented for Bitcoin. This means they can be traced and so aren't as anonymous as folks were led to believe. Or even as anonymous as paper cash. That's why the FEDs were able to bust Silk Road. In fact, the FEDs can trace every individual Bitcoin if they want to go to the trouble.
It looks like there may be other holes in the Bitcoin protocal in general as well. Mt. Gox, billed as the biggest Bitcoin exchange, just filed for bankruptcy protection in Japan: (February 28, 2014) It apparently lost all of it's patrons' Bitcoins to hackers.
SO, if you decide to get involved in the cryptocoin trade, Kevin, I'd suggest one of the coins that DID implement total anonymity -- if it works. That at least gives it a little product differentiation. Probably, given the rapid evolution of things, very little.
You might try Maxcoin, named after Max Keiser of RT's Keiser Report and pushed by Bitcoin guru Charles Hoskinson. Who knows whether it will make the cut, but you'd be in on the ground floor - - -
Above advice worth what you paid for it.
Health, happiness & long life,
P.S. Bitcoin -- and the other cryptocurrencies built on the bitcoin block-chain -- are just the tip of a pretty big iceberg that can be used for all sorts of things. It's a real phenom. Will it last in any form? Who the un-fuck knows. But it will be interesting to watch. It challenges the very basis of the government bankster axis.
P.P.S. The next step in the Bitcoin evolution is billed as Ethereum - General - Bitcoin Foundation
List of alt coins followed on reddit as of February, 2014. http://www.reddit.com/r/BitcoinBeginners/ other altcoins: