SHA-256 based proof of work is a means, not an ends. We use it to achieve a desired result - that being a decentralized network. For the time being it is working. Since production of silicon chips is very centralized, and it is well within the reach of many governments to amass a majority of hashing power.
This. Absolutely this. If the US, or China, wants to take over Bitcoin, freeze its value relative to dollars (or Yuan), and issue as many bitcoins as they want just the same way they issue their usual currency? A call to butterfly labs or somebody who can reverse engineer one of their chips, a gag order to prevent them from talking about it (if they even know about it), another call to Intel or somebody with a huge chip foundry, cut one big check, and done. Anybody whose client rejects blocks where more bitcoins are created than their client thinks is kosher then finds themselves on the losing side of a chain fork. And the updated client is available from your friendly neighborhood government offices.
POS takes over, btc/cc's continue, hence nxt's spectacular rise. Taking BTC out of the equation means little now, all it does make way for the others contenders, of class crypto's, and drives innovation even faster.
This is why people diversify in alts by class
It would not be in the central govs interest to take out btc as they are just sowing the seeds for an exponentially harder version to arise. Still Govs make bad decsions so they might still have a crack at it.
prometheous has let the idea out, and writ large that a currency can have international value without a central state issuer or gold backing it, rather that it just a better currency to do what currencies should do, enhance efficiency of trade & reflect wealth.
Few pre 2010 or even 2013 for that matter would have believed this was even remotely possible
