It is going to occur and we will probably see it materialize within the next 7 to 10 years.
Not 7 to 10 years. Maybe 70 to 100 years.
It has it's disadvantages and advantages. Probably the best advantage is near complete elimination of wars. If it was like the U.S., with countries acting like states, it might work.
It would result in less or no wars between countries but a certainty of a violent revolution from many of the 7 billion enslaved people. For this reason, they will pretend to be separate countries as long as possible, while still creating the same laws regardless of our votes.
A world government is something I wanted when I have still been naive too, but seriously, look at how society works. Usually smaller societies work far better than bigger.
If a small society wants to create big weapons and believe in a god that says all nonbelievers must die, or many other possible motivations to kill people, what must the other small societies do?
The great think about the way bitcoin works is that people have to participate in the process to be rewarded. But those that are rewarded are not guaranteed a reward. They more mining someone does then the higher the probability of that person being compensated with bitcoins. The political process should be the same way. The more work a person puts into the process the more likely they should be chosen to make the decisions for the process.
Lets think about applying that to some processes to see how it would work:
Governments have been taxing everyone for all of recorded history, so they should continue to get to choose how we are taxed instead of, what was that thing... oh yeah, democracy, government by the people.
A stalker is involved very much in the process of someone else's life. That stalker should get to make some of their choices for them.
The central bank system was involved very much in the recent near global economy crashes, so they should continue to get to make choices for the global economy.
Clearly putting in time and work isn't the way it should be measured. Instead, measure it by who improved things the most.
Within the context of the biosphere which supports us, there are plenty of participants who do not understand the complexities of the processes within the biosphere which produce our natural capital. Unfortunately then there are plenty of participants who don't know when to stop, or what all the ramifications are.
Conclusion: Bitcoins do not serve as an applicable model of free markets.
This gets to the root of the problem with money. It amplifies the motivations in people toward locally and short-term improvements at the cost of long-term and large scale improvements which would be more efficient overall for the Human species if people didn't keep defecting in variations of
http://en.wikipedia.org/wiki/Prisoner%27s_dilemma in the many ways the world works. This doesn't mean we should or should not get rid of money, just that we should be aware of what it causes so we can better design new ways for the world to work.