>As Paul Krugman indicates, Bitcoin is actually a pretty bad currency. It's difficult to convert to, few places accept it as currency

I'm not sure this is a fair criticism because literally every non-governmental currency would suffer from this problem at first. There is nothing inherent to bitcoin that precludes it being easy to convert to or being widely accepted. In fact, there are qualities inherent to bitcoin that make it easy to convert to and to be widely accepted. The problem is that there is no appropriate frame of reference for these qualities because there have been so few digital currencies in the history of the world.

A fairer assessment might be that bitcoin is a fairly bad currency at the moment but has the potential to be a pretty great currency. The same is not true for the Zimbabwean dollar.

I agree, however, that currency speculation is currently the biggest problem facing bitcoin (by far).