There is a arms race between code writers and hackers. Hackers improve with time, can Bitcoin software evolve? Perhaps it can, but I don't see how.
Regardless, the US Government will hack it to pieces once their friends the banksters think it is a problem.
The bitcoin protocall has already evoloved many times. Since I am not good at programing I cant really explain it to you in detail. If you want I can find a link that explains it better than I can. Software can always evolve and has a lot. There are lots of new software and hardware to help you secure your coins and your transactions.
What do you mean "hack to pieces" the goverment has a bitcoin wallet with hundreds of millions of dollars in bitcoin on it. They have not been able to crack it, to control the coins. They have the device or peice of paper that they are stored on, but no control, they can not use them. This has been the biggest test so far, imo.
that's what worries me the most - hackers and the system itself.
What do you mean exactly? Anywhere that there is any kind of money there are people trying to steal it, that is by no means exclusive to bitcoin. Think of all of the fraud going on with Online Banking and Paypal, involving................HACKERS.
there is no back up system if something fails or if names are lost/stolen.
There are no names in the system only sets of numbers and letters. Yes you can lose bitcoin if you do not take care of it. Yes you can have bitcoin stolen , it is kind of like having cash stolen, it is gone.
actually, 85% of transactions these days are done by speculators.
Where did you get this info? This is interesting if true. In my experince most people just "buy and hold" are are not day traders. ATM new adaptors from China are fueling the price increase.
Q: Who would be using bitcoins to buy things.
A: those who owned bitcoins before they took off in the market... it's just free money for them. Why would someone bother to transfer cash into bitcoins to buy something using bitcoins - why not just use cash.
you can not use cash online
Well it could be for one or more of these reasons, just off the top of my head:
1.very low transfer fees compared to western union or paypal
2. not wanting to support the fiat money system.
3. trying to avoid the NSA et all from collecting info about you for whatever reason.
4. People traveling internationaly that do not want to carry cash on them when crossing boarders.
6. People in countries where the currency is total s*it and has high inflation and or where the goverment can print money at will and destroy the value of what you earn.
7. Anyone that the bank or paypal has refused to give an account to for finaical, political or other reasons
Q: Who would only transfer cash into bitcoin.
A: Speculators, and people looking to hide money.
People that do not want to have their money taken from them like what happened in Cyprus, so yea technicaly that is "hiding" money.
Q: Who would except and cash out of bitcoins.
A: Any retailer, this is a new source of money (and customers) that did not exist before. But from what I have read as soon as the retailers get BTC, they transfer them back into cash. the market is way to volatile for any retailer to take a chance of leaving the proceeds as BTC
A: original BTC holders, its free money now
A: anyone that has BTC and wants cash. Yes, some retailers cash out right away, but not all.
The only thing keeping this currency afloat are the speculators, as I can not see any other reason to buy Bitcoins.
Well yea if you call anyone that buys bitcoin a speculator then you are right. I have named a few reasons above. It is a better investment than putting money under your bed or investing in the stock market, imho.