I'll be honest: I love bitcoin. I believe it represents a possibly amazing future. It offers us one viable mechanism to be economically free without the intrustion of governments into our economic lives.

That being said, I read often that because Bitcoin is decentralized and encrypted that it's pretty safe from Governments shutting it down.

While that may be true there is one thing that seems to be overlooked: physical theft of bitcoins. Bitcoins are only usable if you have the private key associated with that bitcoin (i.e., your wallet). Governments can literally just take your computer, and thus your wallet.

Since Bitcoin will only ever produce 21 million bitcoins, a slow and steady program to amass bitcoins (via raids and/or any other means) by the government could shut it down. If they throw away the keys to those bitcoins, the coins are gone -- forever.

Thoughts?