high frequency trading, transaction processing times between financial institutions, small footprint of financial organizations in 3rd world countries, opacity of the existing global financial systems, restrictive regulations, lack of individual ownership of existing financial institutions, the list goes on as to why digital currencies are needed.
Yep... and we already have bitcoin for this.
all fiat currencies provide anonymity for illegal transactions. as long as fiat is physical is can travel through out a black or grey market for years with no historical record of transactions.
The huge amount of btc can be easily followed on the way to mtgox through the chain.
One of the easiest and efficient ways to make them really anonymous is to change to alt-coins at some anonymous stock and then back.
litecoin serves as much of a purpose as did the horse drawn carriage. useful for its time but it cannot go as fast as today's cars. the world will demands strong, better and faster. litecoin is somewhat a mature coin now. time to move on to strong better and faster.
The real problems of bitcoin are initial ease of use for non-tech'y people and transaction speed.
If there will be a coin which will solve both of this issues it will have a chance for popularity (in case of sufficient investments into marketing).