Perhaps it can't work as a currency in the United States sure, I always expected the USA to fudge up the acceptance of Bitcoin.
The world is a large place and Bitcoin is a very amazing, worldwide thing that I fully believe can continue to work as a currency, outside of the USA of course.
I agree. It seems to me that we're dealing something whose potential we don't yet fully understand. It might very well fail, but a declaration by the IRS changes nothing except the behavior of speculators.
If all Bitcoin is good for is a way to replace Visa/MC then there is nothing all that fundamentally different about it. Dwolla and/or others will take care of that.
It is clear that it will take time for the really interesting uses of Bitcoin to emerge (if it survives). Until then, it doesn't matter what anyone declares about it.
The world is a large place and Bitcoin is a very amazing, worldwide thing that I fully believe can continue to work as a currency, outside of the USA of course.