Keep in mind that you are already using IOUs today. When you deposit money at MtGox, you get USD IOUs which are just an entry in their database. When you buy Bitcoins using the MtGox trading platform, you spend your USD IOUs and receive Bitcon IOUs which again are just entries in the MtGox database. It is only when you "settle", by requesting either that actual dollars or Bitcoins be sent to you from MtGox, that you have something tangible.

Ripple works exactly like this, except the IOUs are more explicit and they can be cryptographically stored, sent, and received in a safe and efficient fashion between any participants.

I rather think they pulled the plug. They want to stall the collapse for as long as possible to collect more fees. And since it is within the promised 48h "no fee" value propping area they don't loose any either.

Just to set the record straight.... Mt. Gox did not originally stand for Magic the Gathering: Online. That was an early jab at Bitcoin made by SomethingAwful, or 4chan, or whatever they were.

Oh goodie, more Google conspiracy theories. Actually I never had to ask for approval to use 20% time on Bitcoin. That's the whole point of the policy - as long as there's some justifiable connection to the business, you can do more or less whatever you want with it and managers can't tell you not to unless it's clearly abusive. That's how we ensure it's usable for radical (i.e. unexpected) innovation.

But even if I was being paid to work on Bitcoin full time by Google, the idea that I'd want Bitcoin to grow and scale up as part of some diabolical corporate master plan is stupid. Occam's Razor, people! The simplest explanation for why I have worked so hard on Bitcoin scalability is that I want it to succeed, according to the original vision laid down by Satoshi. Which did not include arbitrary and pointless limits on its traffic levels.

The idea that Bitcoin can be a store of value with a 1mb block size limit seems like nonsense to me. That's reversing cause and effect. Bitcoin gained value because it was useful, it didn't gain use because it had value - that can't be the case because it started out with a value of zero. So if Bitcoin is deliberately crippled so most people can't use it, it will also cease to have much (if any) value. You can't have one without the other. The best way to ensure Bitcoin is a solid store of value is to ensure it's widely accepted and used on an every day basis.

If Bitcoin was banned in a country then I think it's obvious its value would be close to zero. This is one of the most widely held misconceptions about Bitcoin, that it's somehow immune to state action. A currency is a classic example of network effects, the more people that use it, the more useful it becomes but it goes without saying that you have to actually know other people are using it to be able to use it yourself. If there was immediate and swift punishment of anyone who advertised acceptance of coins or interacted with an exchange, you would find it very hard to trade and coins would be useless/valueless in that jurisdiction.

The reason I'm getting tired of these debates is that I've come to agree with Gavin - there's an agenda at work and the arguments are a result of people working backwards from the conclusion they want to try and find rationales to support it.

Every single serious point made has been dealt with by now. Let's recap:

• Scalability leads to "centralization". It's impossible to engage in meaningful debate with people like Peter on this because they refuse to get concrete and talk specific numbers for what they'd deem acceptable. But we now know that with simple optimisations that have been prototyped or implemented today, Bitcoin nodes can handle far more traffic than the worlds largest card networks on one single computer, what's more, a computer so ordinary that our very own gmaxwell has several of them in his house. This is amazing - all kinds of individuals can, on their own, afford to run full nodes without any kind of business subsidisation at all, including bandwidth. And it'll be even cheaper tomorrow.
• Mining can't be anonymous if blocks are large. Firstly, as I already pointed out, if mining is illegal in one place then it'll just migrate to other parts of the world, and if it's illegal everywhere then it's game over and Bitcoin is valueless anyway, so at that point nobody cares anymore. But secondly, this argument is again impossible to really grapple with because it's based on an unsupported axiom: that onion networks can't scale. Nobody has shown this. Nobody has even attempted to show this. Once again, it's an argument reached by working backwards from a desired conclusion.
• Mining is a public good and without artificial scarcity it won't get funded. This is a good argument but I've shown how alternative funding can be arranged via assurance contracts, with a concrete proposal and examples in the real world of public goods that get funded this way. It'll be years before we get to try this out (unless the value of Bitcoin falls a lot), but so far I haven't seen any serious rebuttals to this argument. The only ones that exist are of the form, "we don't have absolute certainty this will work, so let's not try". But it's not a good point because we have no certainty the proposed alternatives will work either, so they aren't better than what I've proposed.

Are there any others? The amount of time spent addressing all these arguments has been astronomical and at some point, it's got to be enough. If you want to continue to argue for artificial scaling limits, you need to get concrete and provide real numbers and real calculations supporting that position. Otherwise you're just peddling vague fears, uncertainties and doubts.