I'm sorry for not being clear.  My point was that if I have any non-obvious insight into how Fed policy will shape the future, I can already make a billion dollar bet in other markets.  I don't think it's realistic to expect Truthcoin to do anything but aggregate obvious insights regarding future events that bettors can elsewhere gain as much exposure as they want to.

The only markets on InTrade that received any volume were the election markets.  There wasn't any other simple way for a bettor to gain exposure to those events.  InTrade got shut down for pissing off the CFTC by offering prediction markets on the price of commodities.  Those markets received no volume.

Let's say I'm an actor with a non-obvious insight into the future effects of Fed policy.

How does Truthcoin incentivize me to add my insight to the market?  My status as someone with non-obvious insight into the future effects of Fed policy means my opportunity cost is rather high.

AllYourBase,

It's true that Bitcoin empowers people that want to stay hidden from the government's view.  The technology seems sound enough that this will be true no matter what additional costs governments impose on using Bitcoins.

The force that drives that empowerment is Bitcoin's ability to substantially reduce transaction costs.  This is a force that can also increase the wealth of anyone that chooses to transact in compliance with government.  Focusing on this fact is more honest to what the technology really is.  If governments don't act to impose additional costs onto Bitcoin, then everyone - governments, citizens, and the rare anarchist - will benefit.

Governments subsist on the wealth and productivity of their citizens, not on any currency. 

Showing that businesses can use Bitcoins and increase their wealth while paying the appropriate taxes will get governments behind Bitcoin.  They already have small amounts of people working hard to anonymously exchange using USD, they don't really care if a small amount of people will do the same with Bitcoin. 

People arguing that tax paying USD businesses are going to become tax evading Bitcoin businesses is what will get a government to stomp its foot down.