So that leaves us with a payment instrument with:
- security by obscurity,
- uncertainty as to legal rules/jurisdiction applied,
- a limited amount of coins to be issued.
And let me be clear. All of the above mean that it is unfit for use and essentially only an activity that may somehow benefit or amuse the owner.
So, we can be brief about what it is. If presented as a solid payment mechanism, we must officially consider it a mere scam, designed to fool some subcultures in this world to believe that there may be something as a free unregulated worldwide anarchistic form of money that can work. History shows that while some of these systems may work for a while, they will never work for similar time periods as regular currencies do, and the reason for that is the lack of governance, security and legal underpinning.
To illustrate this in a simple way. Bitcoin has a fixed amount of coins. Now imagine a country with a limited amount of money available. This country cannot sustain the use of a limited amount of coins to pay for ever increasing trade and a growing economy. Unless it has a central bank monitoring the amount of money in circulation in relation to economic growth. But Bitcoin doesn't come with a central bank, so the coins will continue to increase in value until they become unpayable. As such it has all the characteristics of a ponzi-scheme. Which means: the last owners of IUOs will pay for those that have exited early.
[Update June 13, 2011: I've come to understand that in technical terms the scheme is open and transparant, yet I'm still struggling with the monetary and governance side of it. And it does take more than pure trust in technicalities to get a payment system to survive.]