Somewhat off-topic: isn't BC just digital gold? Is there any reason to think of it any differently?
For instance, ~$690 million of trading has crossed a single gold trading instrument since this morning:
http://finance.yahoo.com/q/bc?s=GLD
I don't have an argument that bitcoin could not handle that sort of volume, but I don't think it is particularly controversial to say that it has not proven itself to be a stable store of value.
I bought a bunch of bitcoin early, and sold it for a handy profit at $10. The ones I kept aside (about 20) were lost on a PC whose hard disk crashed. My understanding is that these coins are forever lost.
In any case, the ones you lost just increased the value of all the other bitcoins still in use. Since each unit is theoretically divisible into infinitely smaller units at some point in the future, people will just trade smaller amounts for larger values. That's a feature, not a bug!
A lot of people are claiming that deflation is a death sentence for a currency like this. Something they overlook is that new coins will continue to be created for many years still, and that all it takes is a new version of the protocol to 'fix' any fatal flaws in the current system. If the majority of users have a financial interest in defending the value of their coins, it seems logical to me that they are likely to act rationally to achieve that if a threat were to emerge.
But then, who knows.
NO it isn't. Gold can be used for many different purposes other than just currency.