No one else has mentioned that there already are hundreds of cryptocurrencies out there. There's a tracker here:
http://coinmarketcap.com/. It's relatively trivial to start your own cryptocurrency, so sometimes people will do it just for fun, to see how it works.
Out of the supposed $6.9 billion market cap, Bitcoin accounts for $6.2bn.
Litecoin and Dogecoin are the only other ones I have really heard being used. Actually, I've never heard of Litecoin being used, only mined.
I think cryptocurrency is silly right now, though. It's barely functional as an actual currency, because actual (useful) currencies are relatively stable.
Here's my take (Disclaimer: I have far less than 50 hours of research into Bitcoins): If Bitcoins are continually mined, increasing their supply steadily, why would the price go up, not down? You would expect Bitcoin prices to be inflationary, just like the US Dollar. Well, it's gotta be because demand is outpacing the rise in supply. And why would demand increase on something that intrinsically should fall in value because it is becoming increasingly less scarce? Because: have you seen the news lately? People are getting rich of this stuff! Hence, speculative bubble.