NLS...
Pros...
Free market interaction
Tax shelter
Cons...
It is illegal
If you are planning on using Bitcoin as a business you should realize that there is an inherent illicit nature to the practice of using, trading, and even promoting a currency that is not issued by the state, the state has a monopoly on currency for a reason, anything that threatens it will be playing a game with the coercive resources of the state.
Bitcoin provides supreme opportunities to its users, to see how a free market can work, to see that governments are not exactly good at mitigating the moral hazard of fiat currency, where a private generator may be better and when government is taken out of the equation, prices are drastically different.
This is as illegal as us forming a mint, and pressing silver into coins to spend in a market that operates outside the tax structure, inherently all operations using bitcoin are "Black Market", with this in mind, if illegality is an issue for an individual, cashing out now might be the best option...
Fergalish:
The difference is the banks have the coercive power of the state to protect their actions, with bitcoin, as it is an inherently illegal operation, there is no power to force people to interact with dishonest users, the dishonest types you seem to be pointing out, would shy away from a market that do not have a coercible market advantage...
Suggester:
Market exchanges need to take place for a market equilibrium to be reached, there will be a correction as more exchanges are possible, therefore utility is increased, but these are nominal...
NLS:
A "Fiat" currency is not bad because it is not a commodity currency, it is bad because of a state monopoly, if you have 5 competing fiat currencies there is more of a tendency for honest currency, this is because the dishonest ones will be deselected out of the market. Similarly if you have a single commodity currency in the hands of the state, and this is a historical fact, the state manipulates composition if the commodity currency...
On criminal activity...
What criminal activity?
What property right violation would use bitcoin to hide itself from the state? Seems inconvenient to me as a step to avoid detection...
If you are thinking trading state mandated contraband is criminal activity, well, then so is bitcoin, as FRN are the only state mandated currency in the US, all others are contraband...