Let's face it, the last three months have been nothing short of ugly for Bitcoin. Just about the entire Internet has called Bitcoin's time of death, tagged it's toe, and thrown it in the freezer, not even granting it a funeral worthy of pets.com.
Those of us who continue to guard the flame are confused, tired, and starting to ask ourselves if we're crazy. If Bitcoin is so great, why isn't it catching on?
Well, let's look at the facts:
1) Until a week ago, you had to know how to build a computer from scratch to secure your wallet. Okay, maybe that's an exaggeration, but it sure felt that way. At one point I had so many USB sticks and TrueCrypt files on the go, I felt like I could start an on-stage show at the Mirage, juggling flash-drives while singing Celine Dion songs in binary. Once I installed the new client, it took me two hours to undo it all and consolidate my Bitcoins into one secure wallet. Finally, I can tell my friends about Bitcoin, and I don't have to lay awake at night wondering if their Bitcoins are being stolen by crazy hackers from the Caribbean.
2) The Exchanges and E-Wallets are very new and legally ambiguous. There can't be a functioning Bitcoin economy until a solid, time-tested, secure network of exchanges is in place, all around the world. This summer has been absolutely brutal for hacks, stolen coins, and fraudulent website operators. None of this is doing the Bitcoin economy any good. It's going to take time for reliable sites to prove themselves, and for the legal schmozzle to sort itself out, before the average Joe is going to dare dip his big toe in the pool of freedom-coated Bitcoins. Sure, the blackmarket will continue to thrive and grow, but that's not going to help Bitcoin go mainstream.
3) Bitcoin is new, like, Facebook-with-1000 users new. If Bitcoin was a website, it would be on geocities with a bunch of "under-construction" gifs. It's going to take time to build the infrastructure and attract merchants to accept the currency. The last few months have seen a massive drop in Bitcoin value, yet a huge influx of new exchanges and services. Just imagine how many projects are on the go that we don't yet know about, or how many haven't even been thought of yet. Patience is a virtue, and it's desperately needed here.
Within a few years, we'll be looking back at 2011 the same way we look back, today, at the 10,000 BTC pizza, saying, "my God, what were they thinking? How could anyone have written off something that had so much potential?"
The tipping point will come eventually - I'm convinced it's inevitable - but it's not going to happen tomorrow. Anyway, what's the rush? In the meantime, put on your Alpaca socks, smoke some e-cigarettes, and play some bittleships.