For this reason and this reason alone, bitcoin can never become mainstream or allowed to go on much further without Government intervention. There are reasons why we can't have anonymous financial transactions and this is exactly why not. If we lived in a truly honest society with no evil intent (impossible) then possibly the idea behind bitcoin would work. But when we think about the real life implications of anonymous transactions, then we should all realize now is the time to get out. It cannot ever become what we all hoped because the scammers of the world will always be there and we cannot, as a society, allow them to have a tool in which to terrorize, threaten, extort and steak from hard working people who are targeted simply because of their use of bitcoin.
Paper money has the same problem. So, should be paper money banned? Knives are used to attack people? So, should be there a ban for knives?
Imagine your child is kidnapped in a world with and then without bitcoin.
Without: In order to ask for and recover a ransom... there needs to be a physical drop off, or trackable transaction which can allow for the recovery of the child or the funds. Many possible situations must be contemplated by the criminals including... stings, tracking embedded cash, set-ups, etc. etc. Making the job of the criminals difficult.
With: Simply kidnap who you want, demand bitcoin. Kill those who do not comply, collect from those who do.
So, I'll rewrite that letter. Lets see the difference.
So, guys... can bitcoin be allowed to continue or should we cut our losses?
Planes should be made illegal. Imagine what can happen if a control of a plane go to the hands of a terrorist, like happened in the September 11th? Santos Dummont killed himself after seeing what the militaries were doing with the planes.
The problem is not with Bitcoin itself, but what people do with Bitcoin. But for criminal activities, they don't need Bitcoin. They use paper money. They use gold. They use silver. Or exchange drugs for arms. Or vice-versa.
The same goes to kidnappers. They kidnap who they want and demand cash. You can call the police, but in this case the kidnappers can do what they promised.
Edit:
Again, get away from the killing issue and look at small demands that these people can make. Without bitcoin, there are few tools that help hackers find new ways of stealing funds. Today is the first day that I realized that this is just a tool for scammers and the implications of its adoption far outweigh the benefits of the same.
Wrong. Hackers steal a lot of funds from traditional banking and POS machines.
Or when they can't do this, they'll just go to some place with ATMs and explode the ATMs with TNT (here in Brazil, this happens every day).