Bitcoin's role the world economy is unlikely to be as a replacement for all other currencies. This is partly because of the properties of the currency inself--

Bitcoin's role the world economy is unlikely to be as a replacement for all other currencies. This is partly because of the properties of the currency inself--a modest inflation is good for the economy--and partly because governments/unions are not wont to give up complete control over their currency. Instead I suspect Bitcoins will be used as a medium to ease transactions. At present it's both hard, time consuming and expensive to move money around (banks profit on the exchange rates, VISA taking 2.5% cut out of credit card transactions, paypal taking a cut etc etc). The author is quite right that the incredible surge in price isn't good in terms of bringing about widespread adoption for Bitcions, but the rise in price is also inevitable. If Bitcoins are to be used as a transactional medium, then the value of bitcoins have to reflect some percentage (not all transactions will be in bitcoins!) of the amount of money in transit. At present the entire bitcoin economy is worth about $1.5B. I have no idea what say the value of say 1% of all the transactions in world which are taking place at the present moment is, but I suspect it is a great deal more than $1.5B.