I suspect that bitcoin WILL succeed, but for none of the reasons most people talk about.

Bitcoin DOES have an inherent value. Its inherent value stems from its distinct advantages: it is uncontrollable and easily launderable.

Bitcoin is the perfect underground currency. You can sell drugs with it. You can prostitute with it. You can sell murder with it. Bitcoins will have value, not because it has any inherent worth, but because it will be the only currency you can safely use to conduct illegal transactions.

Want BJ on the corner of FU and LAPD? Convert your dollars to bitcoins, pay in bitcoins, and presto: happy ending for you!

The value of the bitcoin will eventually be set by the flow of money through the currency in the pursuit of illicit goods. Let's say the daily illicit "through transaction" market is $100M. That means every day $100M worth of bitcoins are bought, used to purchase illicit goods and services, and then sold back into dollars. Thus, however many unique bitcoins happen to be on the market that day, they will in total be worth $100M.