http://fofoa.blogspot.com/2011/06/bitcoin-open-forum.html

This guy could probably have prevented a serious theft by having his wallets distributed over several machines, but it does point out a critical weakness, not to mention a certain irony. How many people actually protect themselves via distribution, which is the basis of bitcoin security?

I think the major weakness of bitcoin is that it makes no provision for giving the govt. its "cut." If the system doesn't lend itself to being taxed, then for sure the IRS and other revenue agencies will eventually go after it. Bitcoin is too small right now for that to happen, but give it time. No government on earth is going to let billions of dollars worth of untraceable transactions go unchallenged. Bitcoin sells itself as inflation proof and robust, but the real issue is the potential for tax evasion. That will be the excuse used to shut it down, or at least scare people off so it doesn't become a threat to govt. revenue.

All of which points to the basic weakness of any system that attempts to circumvent government control. The real issue we face today is not sound money, but sound government. How you go about achieving that is anyone's guess, but if the internet is to play any sort of role I think this, not money systems, is where the effort should be focused. There now exists for the first time in history a means of direct democratic participation - if only we could figure out how to use it.

ebear