[nussbi]

Here are my thoughts on your concerns:

1) There will always be exchanges even though some governments will outlaw these. I don't see a big problem in getting money into bitcoins but I guess it will be uquite hard to get money out of it. Let's assume you have 10'000 bitcoins with a value of 1 million USD. Who's gonna have the liquidity to get your money out if there are hundreds of exchanges and no big one as they will likely be the primary target of law enforcement in the future? I see the problem more in getting out the money and especially the cost that comes along should bitcoins be outlawed.

2) As interest grows, nodes will grow as well and the system itelf will be able to handle the transactions well.

3) This is also my main concern, bitcoin as every other currency can become a victim of speculation. At the moment this is harder to accomplish though as the marketplaces have not evolved yet to offer tools such as derivatives, options, futures etc. Nevertheless, speculation is a threat to bitcoin and the psychological factor is hard to predict. The best protection against it would be a high volatility (fast in - fast out) which also opens the door to speculative agents.

I see bitcoin succeed only if it gets mass adopted and this is not very likely in the near future. The concept works well on paper but as there is no tangible good involved, mass adoption is unlikely. The savior could be the black markets. Should they decide to even test out the system with a small percentage of their fortune, bitcoin will grow exponentionally in value and provide a very nice investment return for early-adopters.

just my two cents...

[contactdick]

Thanks nussbi, great answer. Just on point 2, as the number of transactions grow, my understanding is that all the nodes have to have a copy of the transactions (otherwise how could I verify the coins source coins without a complete trail). Have they come up with a clever way around this or am I missing something?