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Reading a post about someone getting scammed in an exchange and thinking about becoming a bitcoin user, now I am wary about this form of currency exchange.

If the exchanges can scam you, see How to denounce a scam exchange, such as this exchange called BitNake, then why would I use this form of currency? At least with US Dollars we are insured up to $250,000 per bank account by the FDIC.

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Because you and I are not exchanges and Bitcoin is Peer to Peer. Exchanges are irrelevant to the question whether Bitcoin is "better".

Before you start, make sure to read all the introductory material on www.bitcoin.org so you know what you're doing and are choosing the right wallet and exchange.

Some exchanges are scams. Some are not, but may go out of business at any time, just like any company. Hopefully the ones linked above are at least not scams.

Use a reputable exchange (or another method, like localbitcoins) to buy Bitcoins and immediately withdraw them to your own local wallet. Don't leave Bitcoins on an exchange or web wallet any longer than required.

I've never heard of BitNake, but just the name screams scam. Stay away.

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Bitcoin exchanges exist because the US dollar and other currencies (still) exist.

Bitcoin was not designed with the goal of securely converting between BTC and USD. Bitcoin was designed with the goal of securely allowing "online payments [in BTC] to be sent directly from one party to another without going through a financial institution".

To answer your question, you would use Bitcoin when you want your payments to go directly to the recipient, without going through banks and taking days or weeks to confirm. You would also use it when you want a certain degree of pseudonymity. You might even use it to make a political statement: "I don't like the US Federal Reserve, so I'll just buy everything in Bitcoin now."

I agree with you that exchanges can be a problem, so until we get rid of all the other extra currencies (hehe), acquiring some initial amount of BTC will be a little problematic.

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Do not confuse an exchange with a currency...they are far from the same thing.

As you note, people can be scammed in USD as well. In fact, USD is stolen by scammers much much more often than is bitcoin. However, your skepticism seems to lie in the lack of FDIC insurance...which even fiat currency exchanges don't necessarily have. Even so, there have been plans and attempts at launching bitcoin exchanges that do have FDIC insurance.

The exchange you mention, BitNake, is one that I have never heard of even after being involved with Bitcoin for several years. If you are planning on handing over money or payment information to anyone, regardless of whether they are selling bitcoin or something else, you should do you research to make sure that the company is reputable.

The sale of bitcoin is not any more immune to scamming than is any other item.

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The key point is that exchanges are not a part of the Bitcoin system, technically speaking. You will not find in the Bitcoin protocol any mention of "exchange" or even "USD".

You might argue that exchanges are needed as a practical matter for using the system, but that's not right either. You can avoid exchanges completely, and you can use the kind of exchange service that doesn't hold customer money long-term, and is thus extremely unlikely to scam you.

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