Stulid, thanks for the link.
R.C.Anderson, thanks for discussing the matter sensibly using valid points. I have indeed considered whether the number of miners has already reached an optimal number, making it unprofitable for any other players to enter the industry. However, I have been wanting a new gaming rig for a while too (My last gaming PC is a 3 year old laptop...), so even if the bitcoin mining proves too unprofitable I wouldn't be too unhappy with my purchase.
For the rest. No, the currency will likely appreciate rather than depreciate as regardless of the number of people and the strenght of their hardware only a constant number of bitcoins are produced each day. Every 10 minutes 50 coins are produced, until 210 000 blocks something like that, where the number produced every 10 minutes halves to 25. In the end there will be only 21 million bitcoins. So in contrast to the paper fiat currencys there will likely be deflation rather than inflation.
And for the whole "value out of nothing" thing people seem to be unable to understand... Well paper money are worthless too essentially if you look only at the utility of use of the paper itself. It's the value as a medium of exchange that gives paper money value (As well as the forced value stemming from government force dictating it as legal tender).
Bitcoins are valuable because they are an useful medium of exchange. You cannot reverse transactions such as paypal. At the moment there are no mandatory transaction fees, so international transactions are much more efficient than using banks etc. They are secure and thanks to the raw computing strenght of the network it would be nearly impossible for an hacker attack on the currency itself (Obviously you can still hack individual users and try to steal their bitcoins from their PC, as has happened).
And yes, criminals love bitcoins, because it is anonymous. If they love it and need it for transactions, demand for the currency increases, which I believe is a large reason for the massive increase in value of the currency during the past few months. Even if you have no interest in purchasing illegal drugs (I do not myself for instance), it can still be interesting to look up The Silk Road to get an understanding of the kind of underground market that bitcoin helps enable.
(Mods, if mentioning the silk road is against forum terms just delete it from my post. I'm unsure. Anyway, not mentioning anything about how to get to it)
