Bitcoin is designed to be subversive, and subversive means illegal as far as the government is concerned.
This is the main/only reason I'm not making any long term investment in Bitcoin.
I see government control over money as basically an immovable object - I don't think so-called constitutional protections mean anything when it comes to governments doing what they feel is necessary to maintain control. Internet freedom and encryption are not as much of an irresistible force as net-romantics would like to think.
If anything can force governments into legislating backdoors into all encryption systems and creating a clearly established set of "choke points" for control of data flows, it is the possibility of Bitcoin and other crypto-currencies to render basic imperatives of the modern nation state impossible to enforce.
It is more or less infinitely depressing to me, because as much as I would like to believe that the "good guys" are going to win, I doubt it. People generally don't realize how much we are already living in a dystopian panopticon, and Bitcoin is one of the rays of light shining through the cracks in the prison walls.
What is even more depressing to me is my own cowardice. I am too scared of the US government to even try to resist in any way, no matter how trivial. I would like to participate in Bitcoin and other projects, but I don't want to end up in a federal prison for conspiracy to assist in money laundering and tax evasion, as I imagine that any participation in Bitcoin will be interpreted by government prosecutors of the near-future.
1) Modern workers are not owned from birth.
2) Debt is not forced upon you against your will, debt is a choice.
3) The alternative to choosing debt is not getting whipped nor killed.
4) Bankruptcy is neither getting whipped, nor killed.
Debt for an individual is a choice. However our monetary system mandates that some people or entities must always be in debt. If there were no debt there would be almost no money in circulation.
So while you say that debt is a choice, it is impossible for everyone to be debt-free. If everyone stopped borrowing (consumers, industry and government) in this country, we would have a complete economic breakdown.
This is like saying smoking is a choice: from the perspective of the single potential smoker, it is. From the perspective of the marketer this is unimportant as they don't need you to smoke, they just need some people to smoke.
Fyi, governments don't control money, the international reserve banking system does, centered on the Bank for International Settlements (BIS.org). Governments' enforcement arms are just their proxy. They'll be even less likely to tolerate an upstart competitor like bitcoin.
Another interesting tidbit. Imagine that bitcoin became the de-facto currency. Not only would the government be unable to tax, it would also be unable to control the financial systems it uses to affect markets. For example, the government can print a small amount of money for itself without causing hyper-inflation. This "inflation tax" would also be noncollectable. Further, the federal funds rate would be useless.
Sure, you can use Tor, launder your bitcoins, and effectively become untraceable, but how many people actually do this, and do this correctly? Even Lulz Security, who presumably have a reasonable degree of technical expertise, didn't bother to use Tor when talking over IRC.
Also, Silk Road is kinda ridiculous anyway, because despite all that security and anonymising, in the end you have to give out a physical address that you'll visit in person.
I don't have to be routing packets for you to find all this out; every transaction goes to every node.
There are "laundering" services which try to play a shell game with addresses, but I think they're probably easy to reverse-engineer, at least probabilistically if not completely.
OTOH, unlike IPs, you can't pinpoint addresses to any location though or find out who owns what addresses for sure. I guess they're more pseudonymous than anonymous.
The wallet provider could, in principle, be subpoenaed / coerced /hacked / owned by the NSA. I imagine there will eventually be a Tor-like "onion" anonymization method, where bitcoins are routed through multiple such services, so that no single service need be trusted (except to not steal your money). The main challenge with these techniques is avoiding forms of traffic analysis, where I notice B$98.23 heading from A to B, and shortly thereafter, B$98.22 heading from C to D, and infer that these represent a single transaction chain despite being disconnected in the block chain record. Such attacks can be minimized by, e.g., settling on a fixed transaction amount for all transactions with a given service, and adding random delays commensurate with the transaction rate and degree of anonymity required.
Today's exchange rate range is 16.45 to 19.23. That's pretty typical, and some days are a lot worse. In the forums, the consensus seems to be that any attempt at economic analysis is largely a waste of time due to there being way too many unknowns. The Bitcoin "investors" and "speculators" just look like gamblers to me. That qualifies as "nuts" to this coward.
However, I do like insulting people.
Just because something is anonymous doesn't make it inherently bad. It's how you use it that can make it bad. If hackers can hack into sites anonymously, it doesn't mean we should ban all anonymity.