[Retric]

The central problem is non reversible transactions and storage on PC's. Computer security means the value can drop to zero at any time and using a 3rd party to store your value means you A lose any benefit of coinX vs. WoW gold or whatever, and B run the same risks as their security can fail at any time.

Now sure people can and have made (and lost) a lot of money, but in terms of actual usage it's never going to see mass adoption without first solving the computer security problem.

PS: However, what I think bothers people is it promotes people pumping coinX in the same way they would time shares. That's simply a drag on any online community.

[cloakandswagger]

The vast majority of fiat currency are 1s and 0s stored on computers, the only difference being:

1) Bitcoin is tracked by a global, immutable ledger, whereas you have no idea what kind of potentially krufty, in-house software your bank is tracking your money with.

2) There is a finite number of Bitcoins that can ever exist, whereas 100 trillion new units of your fiat could be created at the push of a button.

[Retric]

My arguments are in no ways limited to bitcoin. They directly related to all crypto currency's. Anyway...

1) US federal reserve keeps track of all US currency held by banks and the transactions between banks. The banks you use are a separate layer on top of this system, but because of the FED's ledger transactions are ultimately reversible.

2) The actual number of bitcoins that currently exist is in practice not really known. If Satoshi Nakamoto's wallet did a transaction there would suddenly be a lot more bitcoins in play, devaluing the other coins. So, effectively the number of bitcoins can increase at any time.

Further, the number of existing dollars means there is no meaningful way to suddenly devalue them. At worst inflation can rise, but you can swap currency before that ends up costing you 2% thus making it irrelevant.