There is a genuine bitcoin economy, and it is centered around the trade of goods that are illegal: child porn, weapons, viruses, credit card numbers, and most important of all: illegal drugs.
The question is not whether there is potential for a non-government backed digital currency. The question is whether bitcoin will be effective in that role given the design of the currency.
If a better currency is invented that includes some kind of inflationary mechanism, perhaps the drug trade/etc will take up that currency. In that case bitcoin truly will die.
When in fact, BTC's usefulness is its frictionless-but-secure, anonymous transactional nature. Its anonymity is even stronger if you mine coins yourself (or acquire coins directly from a miner for favors or whatever).
You can probably make the case that BTC must be deflationary, in order to draw in traders/investors, who actually provide necessary market liquidity to proxy BTC as USD, backing the worth of BTC-for-goods transactions...
Bitcoin addresses are public but anonymous. But yes, you can analyze the public ledger to tie known data (publicly-posted donation addresses, etc) to try to de-anonymize someone. There are coin tumblers/mixers in place in some markets, although it's hard to tell how effective they are.
(http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-i...)