Re: it doesn't mean that a plot on 5th avenue is worthless today
The only way I'm going to see a BitCoin is if someone gives it to me, and the only way that will happen is if I accept one in payment for something. Given that, at this point in time, I have no use for BitCoin nor anywhere to spend it, I won't be accepting one for a while yet I think.
Compare this to other fiat currencies, such as the dollar, or pound, which contrary to popular belief are backed up not with gold, but only the promises of government. The Bank of England practises 'quantitative easing' - essentially printing more money, so that what is in your pocket is worth less. Paper currency also suffers from the problem of forgery, which, unless there is a flaw nobody has seen in BitCoin, is not possible with such a cryptographically generated currency. The paper money in your wallet is, after all, just a token of a given value, and a bitcoin is the same, but in digital form. The authenticity of that bitcoin is guaranteed by the network itself; I'd be more inclined to trust the maths behind that than any politician.
What remains to be seen is how much traction bitcoin gains. You can already buy several goods and services using them - the advantage being that since the transactions are between two addresses, governments cannot tax them directly, any transaction fee actually goes to the person mining the next block of coins, which will be what keeps the mining going once all the coins have been generated several years from now.