I agree with Nick, inc. the Mclaren bit (and Bitcoin's not so good for gangsta teeth either). It's certainly much easier to make payments with Bitcoin than gold though, especially across borders.
There have been many criticisms of the 'Proof of Work' concept (aka mining) used by Bitcoin and various other cryptocurrencies but there's a number of things you have to consider ...
- How much energy does the 'present system' consume, including all the world's banks and millions of associated financial institutions?
- All of the energy used to mine cryptocurrencies is expelled as heat. If a mining operation uses the generated heat resourcefully, the net energy required may be close to zero.
- Every Bitcoin costs thousands of pounds to produce, giving it real accountable value. How much does a Dollar or Pound cost to make?
- Mining incentivises people to help run the network, helping it to grow and remain decentralised. Miners not only provide a steady flow of new coins but they also perform the complex cryptographic sums that confirm, and permanently append, each new transaction onto the blockchain.
There are alternatives to Proof of Work of course, such as Proof of Stake, and other innovative solutions such as Proof of Storage. As they evolve, I think Bitcoin and other cryptocurrencies will employ a mixture of techniques, but I think PoW will remain one of the best ways to give a cryptocurrency value, at least until the coin matures.
If you really think about it, energy is the root of all value. The true worth of anything comes either from how much energy it can provide directly or how much energy went into making it (or the energy required to acquire the raw materials that were used to produce it). There is no better way to instil value into something than to ensure a known amount of energy is required to produce it. I think mining is really quite an elegant and ingenious solution to the problem of developing a currency that cannot be backed by (or manipulated by) any government or central authority.
Edited to add: Another unintentional side effect and, largely unmentioned, benefit that mining brings is that the demand for faster and more efficient processors is funding and pushing computing technology developments faster than ever before. Everyone would like faster processors that use less power but the mining industry demands them. The average computer user doesn't care if their computer uses 50 Watts more power or if it takes 2 seconds longer to open Solitaire but miners will not purchase hardware if it's too inefficient to be profitable. So, while cryptocurrency mining may still be consuming huge amounts of power in a few years time, it's likely that the advancements it brings will have lowered the total energy consumption of all computers worldwide.