On the other hand, with a parallel currency devoted to some task such as processing DNS records or perhaps something else that may even have even more CPU resources thrown at it, I would argue that over time this "alternate" currency may have a substantially stronger currency train.  There are no guarantees here, but certainly I could see some people throwing CPU cycles at some of these alternate application simply because of what they do in terms of say DNS records rather than even as currency.  They will have this "alternate currency" which is then even better protected than Bitcoins, and my argument here is that the currency is thus a stronger currency which will drive Bitcoin out of the market place.

And like a Ronco advertisement, "that's not all"!  Since there are concrete applications for this alternate currency (buying domain records, paying transaction fees on the "Bitcoin stock exchange", buying certification from a document registrar, etc.) there is also built-in demand for this currency simply to have it.  That in turn is something that I think over time may even make this currency more valuable in terms of the overall size of the economy using these coins, further driving value out of the Bitcoin economy in a downward spiral.  Bitcoin will then just be a cryptographically weaker currency with fewer people trading a relatively worthless currency.  Is that really what Bitcoin users really want to see?