Re: There will be blood.

Good mobile apps for exchanging bitcoins seems to me to be one of the keys for the success of Bitcoin, enabling easy exchange of bitcoins in the BTC<->Cash market, and keeping it out of reach of govt.

I can't envision being able to transact in bitcoins using a mobile app in an environment where theyve been declared illegal and not being traced. Can you?

I'm thinking of an app where one person can simply transfer bitcoins to another person. Like a gift. Can the possession or movement of bitcoins be declared illegal?

Yes they can. In theory govt can do anything. We have kool-aid drinkers like DamienBlack & Scientician to thank for that. They already ban people giving away music and movies on the net. Fortunately (or unfortunately for said kool-aid drinkers) this theoretical power does not always translate into authority on the ground.