Thanks, That a really good read. I'm saving it on my laptop. All newbie like me should read it. I'm working my way through the second thread.
My opinion of the paper is that it great information for someone new to bitcoin. I totally agree with their suggestion that increased usage could cause a deflationary spiral which most holder of bitcoin would probably love to see. I think the problem with that idea is that there have to be more ways to use it for it's use to increase. This growth could be spurred by vendors seeing people actually spending bitcoin. I actually tried to sell some gift cards on bitmit at a loss without any bites. Small experiment I guess but at even about a 10% discount to the US dollar I saw no bids.
I would love to see the "bitcoin economy" grow and I think it is in fact growing, solowly but steadily. However: I do not think this is necessary for bitcoin to thrive. It could well be used as a store of wealth only, like gold. A while back I calculated the exchange rate bitcoin would have to have to support the existing community with the function of money by guesstimating the size of it. It came out to be USD 0.25. So the bulk of bitcoins value seems to stem from it's use as a store of wealth.
I think these 2 uses (use to transfer value, use to store value) reciprocally grow on each other in the sense that increased use in one of them improves the usefulness for the other. I wouldn't be able to argue this in detail, though.