the bitcoin was touted as a currency that was not backed by anything other than developing and expanding upon algorithms that could "track" the bit coin, in essence generating a new bitcoin "number" for a new transaction and archiving the old number. So although the bitcoin is "anonymous," the foundation of bitcoin relies on complete, accurate and proper tracking. I wouldn't be surprised if the whole bitcoin was built by a covert government agency. lol.
I can't actually remember when (maybe a couple years ago), the bitcoin was like the Titanic and wasn't supposed to sink. And then it sank and apparently, it just happened again.
It seems to have been built on trust. Trust of the algorithm that is. However, it has gone wrong a few times, and one of the initial concepts has been shown to be flawed, that of it being out of the control of any one government. It still is in a sense, the US have attacked the exchanges, where Bitcoin converts to and from the regular (fiat) currencies.
One government fear has also proven to be true, that Bitcoin would be used by major organised crime.
The weakness in Bitcoin is the need to be able to convert between it and fiat currency, it's a point at which governments can regulate it.
I have also seen other points raised. Like cash, if your Bitcoin wallet is destroyed, the wealth is gone forever, there is no way to recover it. This can lead to a longer term problem for Bitcoin as there is a finite upper limit to the amount in circulation, so every time there is a "wallet accident", some Bitcoins are lost from the system forever.
Of course, this idea of "buried treasure" is likely to encourage clever people to research whether "gone forever" really IS the case, or whether these lost Bitcoins can somehow be recovered by an attack on the information found in the blockchain. The founders are convinced that this is impossible, but there again, they initially said it was impossible to have your Bitcoins stolen from your hard drive, and it turns out hackers have found ways to do it. Had the drug dealers on Silk Road kept their Bitcoins on their PC, surely they would still have them. It seems they thought the risk of losing them due to hard drive failure was greater than the risk of the FBI seizing the Silk Road site and all the Bitcoins on it's server.
I would have expected the FBI to have destroyed all the Bitcoins they seized, as they would with any drugs seized, yet it seems they have gone to the trouble of archiving them instead. They are hardly going to return them to the drug lords who owned them!
Of course, you don't have to buy Bitcoins, you can make your own. The problem is that the "glory days" for this are over. Litecoin may be a better option now, but it is nowhere near as widely used as Bitcoin, but with so many attacks on Bitcoin by the authorities, it's possible that Litecoin will start to become more popular, and when this gets too big to ignore, it too will come under scrutiny by the authorities leaving the way open for the next one.
These Bitcoin casinos should consider multi currency software, accepting Litecoin as an alternative.