It would not be possible to seize BTC that your former roommate has in his wallet.

With that being said in the event that a Judge finds that he did in fact hide assets (or not comply with an order to give assets to his former wife) then he could be held in contempt of court (put in jail) until he complies.

Personally I would not risk my freedom for a few hundred thousand dollars (or even millions of dollars).

Over the long term, the long term price of BTC will affect the long term hashrate.

If over the long term the price of BTC will not cover the price of electricity then miners will stop mining.

If over the long term the price of BTC exceeds the cost of electricity (to run miners) then more people will be incentivized to purchase and run miners.   

If my understanding of the IRS guidance is correct then your statement is not true.

My understanding is that, if for example you buy 1 BTC for $10, and then sell the BTC for $660 worth of goods/services then you would owe capital gains on $650 (the difference of your cost basis and the value of the goods/services that you bought with your BTC). This would apply regardless if you were to purchase coffee at Starbucks, gold or any Fiat currency.

If BTC were to be treated as a currency then this would not apply. These rules would only apply if you were to convert BTC back into US Dollars (as per my understanding of how gains/losses on currencies are treated).

This is a very bad idea for a number of reasons.

First this is a very expensive way to invest in your retirement. To pay $1,500 in order to "open (setup) your account" to be able to invest in BTC is a lot of money especially when considering the limited amount of funds you can invest in retirement accounts.

Second Bitcoin is a very risky investment for retirement. Bitcoin is likely a good long term investment, however it is very speculative and carries too much risk for retirement. There is a good chance that investing in Bitcoin could make you very rich, but there is also a good chance that Bitcoin will become close to worthless.

Third you have the issue with potential self dealing. If your IRA LLC were to hold BTC via the traditional way of a wallet holding/being in control of private keys then any time someone sends you a random "donation" to your public address you could potentially be accused of self dealing. Many very large BTC addresses often have small amounts of BTC with spam attached to them. The only real way to avoid this is to own BTC via a large exchange or other central fund. This would create risk that this entity could fail and/or steal your coins.

War and uncertainty are both good for the price of BTC.

This sounds like it is full of risks.

The most obvious risk (although not the biggest) is that you would be scammed out of your BTC.

The biggest risk is that you possibly are guilty of money laundering and are leaving a paper trail (both of which are a very bad idea).

IMO it is always best to "play" by the rules.

Probably never. BTC has created too much interest for it to drop that low.

I admit that it is possible for BTC price to fall significantly but not that much.

I would think they will cause the price of BTC to increase.

The negative interest rate policy will possibly do two things (it will actually probably do both).

1 - This will cause banks to take on more risk. With banks taking on more risks, borrowers and other investors will in turn take on additional risk, which will eventually spill into investing in BTC.

2 - This will cause banks to wish to have less deposits on hand. They will achieve this by lowering the rate of interest they pay for savings/checking/CD deposits and by increasing fees for utilizing their services (and raising the threshold to qualify for fee waivers). This creates incentives for people to hold less deposits in European banks, and one alternative to holding money in European banks is holding money in Bitcoin.

The majority of consumer transactions are some kind of electronic form of payment (online bill pay, credit card, debit card).

BTC solves most problems associated with electronic payments. It does still have consumer protection issues that can somewhat be addressed with escrow.

The safest way to sell BTC is likely coinbase. It is my understanding they have strong internal controls and have security under control.

The "best" way to sell BTC depends on your specific situation. Do you want to have the maximum level of anonymity? Do you wish to receive the funds as quickly as possible? Do you wish to receive the best price?

The answers to these questions will help you determine the best way to sell your BTC. Options besides coinbase include  localbitcoins, an exchange, selling it for goods/services, buying coffee ect. at a local store.

If for example there is a lien on your bank account, if you were to sell your BTC on coinbase and coinbase were to send the funds to your bank, the funds would obviously be garnished to pay for the lien. This is one example of why it is important to take your specific situation into consideration.

My understanding is that localbitcoins trades are done internally via escrow. The coins are released to the buyers account once the trade is complete (this is similar to sending coins to a specific address).

For trades conducted outside of localbitcoins: How do you associate a GPG key with a specific person? What would prevent you (as a seller) to simply create a GPG key, sign a message with a BTC address that you control, then send the BTC to that address? In this situation the buyer would obviously leave once s/he sees that the BTC is not xfered to the addressed specified.

Do you have any BTC yourself currently? If so then you could take cash/fiat from your friends and transfer your BTC to an address that your friends control/specify. Then when you return to a more "friendly" place that you can purchase BTC you can use the fiat to replenish your "supply" of BTC if you desire. You did not specifically say that you are in Dubai temporarily but I did get the impression that you are.

It appears that there are western union locations in Dubai. Another option would be to use localbitcoins to purchase BTC when the seller is accepting payment via western union. I am fairly certain that you could send US dollars to the US (or elsewhere) via western union. You should not do this if you are not comfortable with the risks, and/or do not understand the risks of doing this as even though localbitcoins does utilize escrow, it is not perfect.

Trading on a BTC exchange like btc-e, or bitstamp is based on the traditional bid/ask market (much like if not exactly like trading on the NYSE or nasdaq).

Trading in person and on sites like localbitcoins (and similar sites) is based on prices of exchanges (see above) and will have a premium or a discount based on the incentives of the buyers and sellers. For example if a seller wishes to sell his/her BTC quickly and receive cash quickly they may set a larger discount to the trading price on a major exchange.

You have two possible vulnerabilities:

1) your wallet is set to backup to a dropbox/email that can be hacked and your wallet is backed up prior to setting your very long password. You should note that your email account can potentially have it's password reset with "security/secret" questions that the answers to are possibly public.

This attack would happen as follows:
a) you create a wallet with a weak password (password = pw123 - can crack instantly)
b) you set your wallet to backup to a dropbox that can easily be hacked
c) you create a BTC address (BTC-1)
d) the private key to BTC address (BTC-1) is backed up to the above dropbox account
e) you change your wallet password to a 30 character password (password = pw30chr - cant crack)
f) you change your wallet sending password to a 40 character password (password = pw40chr - can't crack)
g) you create a 2nd BTC address (BTC-2)
h) the private key to BTC addresses (BTC-1) and (BTC-2) are backed up to a dropbox that can easily be hacked (your wallet password and sending password are still in tact).
i) you send 50% BTC to (BTC-1) and 50% of your BTC to (BTC-2)
j) attacker hacks your dropbox account and downloads both wallet backups
k) attacker easily cracks the password from backup from step "d"
l) attacker steals BTC from address (BTC-1)

This attack can be prevented by archiving and then deleting any addresses that are associated with a wallet prior to setting strong passwords, resulting in any backups of your wallet only containing addresses with strong passwords that cannot be cracked and any backups that have passwords that can be cracked only have addresses with no unspent BTc

2) the 2nd attack would simply be for an attacked to install a keylogger to your computer and simply wait for you to log into your wallet and send a small amount of BTC. Attacker now how both your primary password and sending password.

The Bitcoin Foundation cannot simply change Bitcoin.

They are able to propose a change to the code of Bitcoin, however the miners must approve the changes in order for it to be adopted.

In the past the changes have been deemed "a good idea" and "good for bitcoin" so they have been approved by the miners (via a hardfork in the blockchain)

If you have a large amount of Deposits and Withdrawals (including ACH credits/debits) when compared to the average account balance then your account may be closed.

The above is a red flag of money laundering and check kiting (http://en.wikipedia.org/wiki/Check_kiting)

If you were conducting a lot of BTC buy/sells (with coinbase and/or with arbitrage across exchanges and/or buying BTC low locally and selling high locally) then this could trigger these red flags and your account could be deemed too risky.

I have noticed that in terms of US Dollars both BTC and alt coins have a positive correlation.

It is however important to note that alt coins offer very little additional value from Bitcoin. Most Alt coins have small differences from Bitcoin but they are all generally the same (for the most part). The security of the BTC blockchain is the strongest by far.  

An option contract would create even more volatility then the price of Bitcoin. Any derivative will have a greater amount of volatility then the underlying asset.

The huge amount of volatility in Bitcoin would also likely make Bitcoin options prohibitively expensive. When you buy for example a Call option, someone will need to take the opposite bet of you and if it is good possibility that the price of Bitcoin will rise 20% in one day (this is not uncommon) then the person on the other side of the bet will need to be compensated.

In general options contracts being available for an investment is the result of a large amount of liquidity and investment in the underlying asset. Options contracts generally do not cause investments in the underlying asset.   

The news is generally written at a 9th grade level. There are some news outlets that may write at a slightly more advance level, however it is unlikely that you will find any mainstream news written even at a college level.

The news is also written towards the masses (they need ad revenue to pay their bills), this is done by the above as well as trying to sensationalize the news.

In essence any news article will be dummied down significantly.

The concept of Bitcoin is inherently advanced, and uses concepts that are usually taught when obtaining an advanced degree. The result of the news writing about advanced concepts to an audience of the masses at a 9th grade level will inevitably result in some inaccuracies and oversimplifications.

The press is doing Bitcoin a big "favor" as it gives it exposure to the masses which will hopefully lead to more widespread adoption by the masses and become accepted by more merchants/vendors/stores.

I put the word "favor" in quotations because the news is getting something out of the stories as well (readership, ad revenue, and the like).

This problem would likely be solved prior to the value of 1 satoshi being $1

I would guess that one of the below solutions would be implemented when the value of one Bitcoin reaches either five or six figures when measured in USD.

1. The most likely solution would be that the Blockchain would be hardforked with a change to the Bitcoin protocol so that one bitcoin is divisible by (probably) 14 digits (however this value, x, could be anything as long as it is greater then 8.

2. The next most likely solution would be to have more off chain transactions with sites like Coinbase. Generally speaking, only larger transactions would be included in the blockchain so that he tx fee would be small compared to the size of funds being transferred.

This presents a number of issues. The primary issue would be this would cause centralization of bitcoins to major players, which is something that Bitcoin is suppose to stop/reverse. Another major issue would be that by the time this would happen the block rewards would likely be substantially lower then they are now (probably either 3.125 or 6.25 BTC plus tx fees per block) and having a lower amount of TX fees could compromise the security of the network as there would be less of an incentive to mine making it easier to execute double spend attacks.