I think the technology is great. The technology itself gives absolutely no reason for those who don't own bitcoins (in the main block chain) to buy them for any value.
Want to transfer value to someone half-way around the globe without dealing with Western Union, paying huge international fees, or giving your personal information out? I invested in a Chinese company which went on to pay my investment back and I still collect weekly BTC dividends. I never had to pay more than a dollar in fees the entire time, or give anybody my information (except the tax man).
Circumventing government controls is part of the value, the other part is removing the balkinization of finance which has made a global economy impossible or extremely unaffordable. Imagine being able to 'settle' a gold transaction with someone within 10 minutes, knowing it's not fake gold, half-way around the world, and being able to spend it immediately after back in the 1800's. What is this USD you speak of?
Secondly it also excels in that I can send money to someone I don't know for a service, and while they could disappear and run without me having much recourse, they can't steal/lose my bank details or credit card number. There's a different level of risk, one that pays off with small transactions rather than large. Credit cards are the other way, I'm unlikely to call mastercard to reverse a $0.2 transaction, and lots of the consumer protections (in the UK) only apply on certain size transactions.
To pay for something, I have to give someone enough information to take money out of my account. To send bitcoins to someone, it's up to me to send it.
The other reason is that they feel that, without transaction rate limits, mining won't be profitable when the rate of coin subsidy drops off. Some argue that we need the competition for limited block space in order to drive fees up enough to keep mining profitable. Those same fees kill microtransactions.
Since a hard fork would require agreement from essentially everyone involved in Bitcoin, there's essentially no chance of this limit being increased.
The bitcoin network underwent a hard fork a couple weeks ago due to a bug in the implementation of the on-disk database.
The developers reached out to the mining pools and got the vast majority downgraded within 8 or 12 hours. A day or two later a new version was pushed out that mimicked the old behavior up until the point that a supermajority of nodes were upgraded, and then switched to the new behavior.
Forks have happened before, and the community is close-knit enough to resolve them. Everyone's primary goals are a) being ideologically neutral and b) keeping the network running, in equal measure.
That's simply not a lot of data anymore.
1. Early adopter wants more buyers in their market to drive up share price? Check.
2. Price bubbles up and crashes due to high expectations? See number 1? Check.
Unlike any asset I'm aware of, this one is open-source and completely transparent.
> There's little practical use for them other than drugs or illegal gambling.
I think these types of statements will be looked back at contemptuously years from now, even if bitcoin fails and is replaced by something else. This is a completely new field. How can you imagine bootstrapping a currency like this? It can't start with nobody receiving any coins, or it couldn't be used. You could give all the coins to a single entity and have that entity distribute (like Ripple is doing) but this is even less fair than Bitcoin, especially since OpenCoin is keeping half of the coins they're minting.
Practically speaking, there is plenty of use for Bitcoins. I don't have to give anybody my personal information to transfer value, which is impossible to fathom in any other existing commodity. There's even more use for them as it grows and concepts which have not been fully implemented (smart property and the like) are developed into/around the protocol. Every month a great new idea pops up, like fidelity bonded ledgers or some zero-knowledge proof system which makes bitcoins pop into and out of existence without a linear path -- all without a central entity and only some crazy tricky math and sometimes game theory.
Gold itself has had a nasty history too. Remember, it was bootstrapped (relatively speaking) off a market of financing war and has been periodically seized by governments for that end. I personally think gold is much more secure of an asset now, as we have to trust that nobody will seize a majority of the hashing power in the bitcoin network for our coins to be valuable, whereas with gold we only have to trust that they are scarce. It's something like NSA vs. Science, really.
Every bubble could be its last bubble and just like the early adopters who were smart enough to cash out in 2011 when they saw the opportunity, there are some who were smart enough to cash out during this last bubble. This is why it is absolutely pointless to call it a ponzi scheme. The economic base does not depend on new users financing it. Massive bubbles do, which is why they should be ignored/hedged against.