OK - so can someone please explain why bitcoin is worth ANYTHING? The only reason that bitcoin is worth money is because other people think it's worth money. As far as I'm concerned, it's as wise an investment as tulips in the 17th century and the South Sea company in the 18th century. Sure, some people will get rich out of bitcoin, but many more will get their fingers burnt in a pretty big way.

Answers - as best as I can give - are as follows:

Q: Am I right in saying there are no products or assets you can exclusively buy with bitcoin. I get there are some products that it is easier to buy with bitcoin but you can still buy these in pounds or dollars.

A: Correct. Bitcoin is a currency like any other currency, except that the value of it is guaranteed by the block chain process that ensures the record-keeping of who (anonymously) owns what. Just like a fiver is proof that you own five quid, block chain allows you to prove that you own 0.0004411 Bitcoin (at current exchange rates).

Q: This is important because the value of bitcoin and assets purchased in bitcoin must still by tied to the value of goods in the traditional currencies.

A: Bitcoin has a floating value vs. other currencies just like other currencies have against each other. So when you convert Pounds to Euros to go on your hols, you get the current rate of exchange just the same as if you were converting Bitcoin to Euros.

Q: I'm assuming as the price of a bitcoin has risen the purchasing power of a bit coin has fallen. If in 2010 one bitcoin is worth one dollar and the price of my kilo of coke is ,000 then you need 50,000 bitcoins. If by 2017 bit coins are worth a £1,000 each then then my coke is still worth ,000 but now should be worth only 5,000 bitcoins.

Again this to me is important, it is essentially an alternative investment rather than a currency, if I have 100k to spare I might want to invest in bitcoin so I can buy a 200k house if my bitcoin rise in value. However my decision to buy bitcoins is as an investment rather than as the only place I could do the trade in dollars but as I hop to get more for my hard earned if I use bitcoin.

A: Yes, you can buy Bitcoin as an investment, just like people buy currencies as an investment. And, just like currencies, or stocks or bonds, the value can fall as well as rise. As we have seen. Treat Bitcoin like Pounds, Euros, Yen, Rubles etc. etc. Invest as you deem appropriate for your risk appetites.

Q: OK so i get those that want to sell illegal goods and services will want to trade in bitcoins but as bitcoin grow further surely this will be legislated against even more thoroughly. The illegal activity will become a stick to beat bitcoin with and what illegal trade bitcoin facilitates will move on.

What do people use now to purchase illegal goods? Cash! Bitcoin is another form of currency, so it's not a flaw of Bitcoin that criminals use it to settle up after doing bad deeds.

Q: It is the technology that makes it interesting, and that will move on. Already there are other crypto currencies and it won't be long before the technology becomes main stream. Bitcoin technology will be use in the future, if I had a spare few quid it might be worth a punt, but not sure I would to put my pension pot in bitcoin specifically.

A: Exactly! If you want to engage in trade where secure payments are required and you have high enough volume that the bank charges will kill your margins, then Bitcoin is a great tool. If you want to invest in it, that's great too - but it's just like any other investment, so caveat emptor!

Just remember, think of Bitcoin as being like any currency, because that's all it is. The only difference being that it exists without the need for a central bank to guarantee the underlying value because the proof of your funds isn't a piece of paper redeemable at a bank, it's in a block chain that's constantly verified ("mined" on the web so that no one can access your stash without your authorization.

Had a quick look into all these "virtual currencies" the other day and it all seems a bit complicated (or maybe I'm just thick!)
It seems to be well known, and an almost accepted fact that people will try and steal your pot of gold. So there is a lot of information on protecting it, by paper wallets you can create yourself, or even by purchasing special devices to store it on.
Not sure if that's a bit of a con to spend more money on another device.
Or... just making you worry more about some virtual currency than your actual bank account information your passing over to receive it.
There a so many different sites, or possible things to invest/purchase, how do you know your not just willingly sending your bank details to the wrong person?

You can buy a McDonald's coffee with a debit card linked to your Bitcoin account. Is that very different from how most people buy a coffee now?