When dealing with physical objects, sure, you have the same problem as regular currency. You need to rely on the weight of the law and the reputation of the seller to give you the material item you requested.
However, (a) that's not a deal-breaker, otherwise fiat currency wouldn't work, and (b) you can programmatically enforce rules on the transfer of intangible assets.
For instance, Namecoin adapts the Bitcoin protocol for the purchase of domain names, which are a limited but intangible commodity. If I buy a domain name with namecoins, the network itself enforces the sale.
Even when dealing with something that requires a central authority, like regular currency, Bitcoins have worth. For instance, if I want to transfer money between service A and service B, Bitcoins can act as a common intermediate protocol. Although the two endpoints are still required, we can replace a lot of the inbetween mechanism, and reduce the dependencies between the two services.
Of course it's not a deal breaker. All I'm saying is that Bitcoin doesn't enforce exchange. There's nothing in the Bitcoin protocol that forces Namecoin to give you a domain name.
Actually there is. You can entwine a pair of transactions such that if the bitcoins are claimed by the seller, the corresponding namecoins can be claimed by the buyer.
However, (a) that's not a deal-breaker, otherwise fiat currency wouldn't work, and (b) you can programmatically enforce rules on the transfer of intangible assets.
For instance, Namecoin adapts the Bitcoin protocol for the purchase of domain names, which are a limited but intangible commodity. If I buy a domain name with namecoins, the network itself enforces the sale.
Even when dealing with something that requires a central authority, like regular currency, Bitcoins have worth. For instance, if I want to transfer money between service A and service B, Bitcoins can act as a common intermediate protocol. Although the two endpoints are still required, we can replace a lot of the inbetween mechanism, and reduce the dependencies between the two services.