Therefore, stressing bitcoin's traceability and that bitcoin is not anonymous becomes the worst of both worlds -- cashless and traceable! No one is fooling the authorities by saying bitcoin is fully traceable and some people know safe bitcoin practices. Press interviews like this one retard the 'separation of money and State' cause and reinforce the harmful notion that money can and should be used for identity tracking. Those are bitcoin's positive key differentiators.
Bitcoin has pretty strong privacy for the average person or business.
But with enough sampling nodes and the ability to observe Internet traffic, you can figure out who is sending what bitcoins. So that sort of thing is within the reach of governments. Even your average cracker running a sniffer can see that bitcoin-like bursts of traffic are being generated on the local network.
I would tell an individual or business owner that bitcoins are private and extremely secure. I would not tell a dissident in an oppressive regime to use bitcoins without many, many additional layers of protection.
mtgox and other exchanges are actively working to be
legal in as many countries as possible. That is a huge step forward for bitcoin.
You're not going to see business uptake if the bitcoin legal status is murky at best. Most businesses that might want to accept bitcoins today already pay taxes and comply with various national, regional and local laws.
So, I'll say it again: bitcoin is not the vehicle for
your ideological cause. It is an ideology-neutral currency. Either you like the current technological implementation, or you don't.