The author asserts "Nakamoto never intended to have large bitcoin pools concentrated in few hands or to have users hand over a large virtual wallet to online repositories which functioned exactly like the banks that were meant to be made obsolete by the P2P nature of the currency. "

I guess Bitcoin didn't really fix the problem of concentration of control, now did it? This is made even more painful by the small, small size of the bc universe. So small in fact, that it resembles nothing so much as the world of low market capitalization penny stocks, where the total value of shares outstanding in a given issue is so small that it can be manipulated by a single player or a few in collusion.

A private bitcoin wallet in your possession and control is a basic and nifty feature, I have some lunch money in one myself. It would appear that implementing the "possession and control" part is neither clear nor appealing for many individuals. Not my problem, but I've seen a couple of "I think I've been hacked by space aliens" threads here that illustrate why folks may be found who would gravitate to a deposit service, so bitcoin as currently implemented is not addressing their need.

I suspect you would find that if the bulk of bitcoins were in private wallets used for primarily for in-kind exchange there would be less volatility as well, but at some point an exchange needs to take place, for example merchants receiving payment need to pay their bills in the local coin of the realm. Inevitably, these concentrations of value that link bitcoin with other currencies become vehicles of hedging and speculation - can you say Bitcoinica?

This and other issues, for example the mining implementation and perhaps the mining concept itself, make me hope that Bitcoin is not an end state. It's a very clever exercise technically, but I can only hope what we have here is the testing of a prototype that should result in improvement.