Welcome to the club!
I think it was the Cyprus event which originally drew investment, press, and then notoriety which led to a cycle of more press and investment. BTC is valued against every currency but I think dollar is the main one because that is the reserve currency that most things are valued against.
Where have you heard that transactions are traceable? I believe they are quite secure. Despite information about each transaction being public, you cannot see who sent or received those transactions, thus they are anonymous.
That was mentioned by Hakim at the Bitcoin meeting at Bookworm on Saturday, how Litecoin could be more practical for everyday transactions. You’re right about the limitation of Bitcoin being able to replace traditional currency because of some of its peculiar design features, like the very limited amount of bitcoins in circulation.
An increase in volume would necessarily lead to inflation, thus my understanding is that no new bitcoins will be added to the system. The future limit of 21 million coins is set to be reached in 2140.
Never heard of that! 1998, that is like ancient internet history.