MtGox Sets Up Call Center For Worried Bitcoiners

An anonymous reader writes "Did you lose bitcoins in the MtGox debacle and are worried that you'll never get them back? Fear not, a call center has been set up in Japan to help allay your fears. From the article: 'Bitcoin investors left hanging by the sudden shuttering of the MtGox electronic market will soon have a way to learn more about the fate of their cryptocurrency holdings—a Japanese phone hotline. In an announcement on the company's website, MtGox said that a call center had been set up to handle inquiries about the company. The call center will go live on the morning of March 3, Japan time.'"

Comments

Moshi moshi

[MRe_nl]

Losing taught humility
Gained me Perspective
I'm a better person now

Re:Moshi moshi

[1s44c]

I already posted so I can't mod, but I just have to say that's a wonderful quote.

Re: Moshi moshi

[Anonymous Coward]

Wasn't that the first post?

Re:Moshi moshi

[Drewdad]

Telephone is too
High tech let me send you a
Telegram instead

Re: Moshi moshi

[Anonymous Coward]

maybe he just started ranting his own post prior to reading a single thing on the page?

Re: Moshi moshi

[MRe_nl]

Unlikely.

job

[Anonymous Coward]

That sounds like a nice job to apply for.

Re:job

[garyisabusyguy]

sure, it comes with a supply of xanax to deal with angry people all day

Regulation of currency

[delt0r]

The history of paper money is interesting as is fractional reserve banking. What a lot of people don't realize is that we the public asked for it to be regulated. And for good reason. The problem i have with bitcoin and bitcoin fans, is they seem to think bitcoin is somehow immune to all the things that went wrong with normal currencies. Its not.

Re:Regulation of currency

[1s44c]

On the whole BitCoin fans don't think that. Maybe some naive kids who got a lot of coins by being in the right place at the right time think that. If they do it will cost them dearly. There are perfectly rational people in the BitCoin scene, people who do research and don't throw money at companies that look shady as hell like MtGox did before it blew.

It's been said many times and it deserves to be said many more - MtGox had only been paying out cash with months of delays for about a year before they went insolvent. Their death was widely predicted about a year before it happened. MtGox also has a history of very serious security issues like the time they leaked their entire user database. Hashed passwords, Usernames, Email addresses, the lot.

Re:Regulation of currency

[Anonymous Coward]

Bitcoin certainly doesn't solve all problems, but let's not forget what happened last time one big bank collapsed "in the real world": Even people who did not bank with them were robbed by their governments to prop up basically every remaining bank in the world, and the trillions of debt will continue to demand interest payments from everyone's taxes. Meanwhile in Bitcoin-land, those who acted responsibly still have all their Bitcoins, and because the money supply hasn't been increased arbitrarily to devalue everyone's assets and to use the difference to bail out those who acted most irresponsibly, the Bitcoins held by sensible people are not suddenly a smaller share of the whole pie.

Re:Regulation of currency

[Anonymous Coward]

If there is something of value involved then scammers will always be aplenty, make that something unregulated and the scammers will flock to it.

Re:Regulation of currency

[Anonymous Coward]

The cost of doing business with BTC is unacceptably high when every person needs to do their own research.

That is another failure with under-regulated markets. In those markets, people's time is expected to be worthless. Every person is expected to spend lots of time reading up on all sorts of stuff that is irrelevant in a well-regulated market.

The bitcoin people are probably reading all ToS on all websites they visit as well, right? RIGHT?

Re:Regulation of currency

[Anonymous Coward]

The very fact that anyone trusted "Magic The Gathering Online eXchange" speaks volumes about the mentality of bitcoin fans.

Re:Regulation of currency

[Anonymous Coward]

Bitcoin is still young. This is a time or risk and opportunity. Besides, if you really think anyone should invest money, for example in the stock market, without spending lots of time reading up on all sorts of stuff, I have a bridge to sell you.

Re:Regulation of currency

[Anonymous Coward]

Exactly. Who'd buy electronics from a company that was founded for making rubber boots?

Re:Regulation of currency

[MadKeithV]

Bitcoin is still young. This is a time or risk and opportunity. Besides, if you really think anyone should invest money, for example in the stock market, without spending lots of time reading up on all sorts of stuff, I have a bridge to sell you.

Monkeys do better than people in the stock market - I'm sure they did lots of market research beforehand though.

Re:Regulation of currency

[Sockatume]

Indeed, MtGox managed to devalue everyone's assets by half without creating any inflation whatsoever. What an amazing innovation.

Re:Regulation of currency

[fuzzyfuzzyfungus]

BTC is definitely too 'buyer beware' to really make it as a currency in its present state; but it's worth noting that there is apparently (a whole lot) of money in adding incomprehensibility to even relatively well behaved currencies. You don't want to let that side of the market get out of hand (Why hello there, world financial crisis, we were just talking about you, those functionally-impossible-to-value instruments, and assorted similar wacky stories...)

Once you count the dreadful freakshows grafted onto real currencies, BTC actually scores relatively low on complexity, on average; but the trouble is that there isn't really a 'safe for noobs' option.

With USD and friends, you should Stay Out Of The Deep End, because that's where the sharks live; but (in no small part because regulators stepped in to make it so) just getting a smallish bank account isn't a harrowing experience.

Re:Regulation of currency

[Anonymous Coward]

If someone was perfectly rational, they wouldnt be touching Bitcoins.

Re:Regulation of currency

[fuzzyfuzzyfungus]

Aside from preventing any central bank from reacting, since they'd need sufficient consensus to modify the protocol behavior, is there anything that would stop a zOMG financial crisis style event denominated in BTC rather than USD?

Hypothetically, you might be able to prevent most leverage-providing instruments if all depositors deposited a specific bitcoin, with the right to demand that specific one back (though, since that would effectively prevent most uses to which deposits are put, any institution offering such a service would probably expect to be paid for secure storage, rather than paying you for use of capital, so they'd likely spin a more fungible 'your bitcoin in, a bitcoin out on request' offer, at which point you are back in fractional reserve territory.

The various yet-more-obscure CDOs and credit default swaps and things also seem like something that today's bitcoin holders would tend to be culturally averse to; but not something that any property of bitcoins would preclude. The only real difference would be the endgame, since you just don't get a choice about tweaking the money supply with bitcoins.

Re:Regulation of currency

[jones_supa]

Or a phone from a company that began by selling fish and vegetables in the 1930s.

Re:Regulation of currency

[delt0r]

On the whole BitCoin fans don't think that.

While there are some quite clued up people in bitcoin (ie the bitcoin FAQ on the official page), there are a lot of anti government people who really don't understand our current banking systems at all. Then of course there are lot of speculators. It could be argued they don't really care as long as they can predict.

Personally some form of ecoin appeals to me and the bitcoin system is well thought out. Its has some flaws like scalability etc and too long to confirm transactions that all could be remedied with a different set of implementation details. Perhaps what i like the best is that block chains could be used to prove the existence of something at a time in a fairly secure manner. ie hash of security camera footage, ideas book, patent applications etc.

But it has failed as a currency to date. At best is a speculative thing. And i remain unconvinced that a proof of work is a good idea. Utility of those resources is wasted and would be better spent elsewhere.

Re:Regulation of currency

[Anonymous Coward]

Bitcoin does not remove risk, obviously. It changes how risk affects the stakeholders. You can still have CDOs denominated in Bitcoins, but when you lose your bet, you lose your bet. You don't get a bailout because you're "too big to fail". The aversion against the fractional reserve banking isn't just cultural. It's a result of the Bitcoin design. If you compare Bitcoin to "cash" (let's say M1), then you could be tempted to think that every aspect of fractional reserve banking could be implemented on top of Bitcoin. But with a fixed money supply (actually even shrinking due to coins being lost), things are different. The average interest paid on investments cannot be greater than zero, and with that, fractional reserve banking doesn't make sense.

Re:Regulation of currency

[Buck Feta]

Or database management software from a company that started out making punch clocks and meat slicers? (or, for that matter, database management from an online bookstore?)

Re:Regulation of currency

[jythie]

Well yes, that is because banks, unlike BTC exchanges, are actually critical for the economy to keep moving. When a BTC exchange goes down the impact is minimal. When an entire banking system freezes up things start grinding to a halt.

Re:Regulation of currency

[Opportunist]

If you think investing in the stock market has anything to do with research and nothing with inside trading and a lot of crystal ball consultation, I'd rather not sell that bridge. You might get cheated in the deal.

Re:Regulation of currency

[Opportunist]

Banks are regulated?

Fuck, I don't even want to ponder what our economy would look like without if THAT is what it looks like WITH regulated banks!

Re:Regulation of currency

[Anonymous Coward]

The kind of reading which should be mandatory before investing in the stock market is about risk management, not about how to find the company that will make you rich. Knowing how much to invest, how to diversify and how to avoid rookie mistakes will help with not losing your life's savings, whether you're investing in the stock market or Bitcoins.

Re:Regulation of currency

[r.freeman]

Oh no, bitcoin investment yelded only 500% yearly, instead of 1000%, buuu huuuu.
In the mean time USD gained how much, +5% from some bonds?
That's what, 400% instead 800% after USD inflation, compared to -1% ? Clearly -1% > 400%, sign me in.
http://thefinancialphysician.c...

Re:Regulation of currency

[Anonymous Coward]

But Mt Gox failed and lost a whole bunch of money. So your example is a moot point.

Re:Regulation of currency

[labnet]

Bit coin is stupid because it can't expand and shrink to fit economic use.
Money is convenient form barter and needs to represent the productive capital of its users and to remain stable for a given capital. (Eg an apple is worth 1dollar from year to year, 1 dollar today, then 10 dollars next week)
As more people use it, scarcity increases its value, making early adopters insanely rich. See the con.

Re:Regulation of currency

[squiggleslash]

I really don't get the impression Bitcoin's fans are the paragons of rationality you're painting them as. And in particular, I take exception with the quote "don't throw money at companies that look shady as hell like MtGox did before it blew."

Some observations:

1. I've read numerous op-eds (op-eds!) over the past week suggesting Mt. Gox's collapse has made everything safer because there's one less bad actor, and those who remain in the Bitcoin world are more mature.

2. There's no recognition that Mt. Gox was, until 6-9 months ago, a highly regarded exchange that was frequently recommended, cited, and so on. It didn't corner the percentage of the market it got to despite everyone thinking it was "sleazy". It got there because of word of mouth. Suddenly it "always sleazy", "everyone knew", and "OMG it was originally something to do with Magic: The Gathering, right?"

3. Many now claiming they "always knew" and are citing things they said 6-9 months ago, after Mt. Gox had already started collapsing and after it had started to become problematic getting money out. Presumably the same people would have said "I always knew the Titanic was badly designed, look at this transcript of a conversation I had on the deck at 12.30am on 15th April 1912. This is what represents "doing research" in the Bitcoin community?

4. Many are now pretending that Mt. Gox provided an unnecessary service and are finding other reasons to blame the victim. What exactly is a "safe" way to manage Bitcoins if you're technically skilled (or are generally technically skilled but also more than aware that you frequently overestimate your own competence?)

5. Where, seriously, are the serious proposals to make Mt. Gox style collapses impossible in the future? In the regulated dollar world, we have the FDIC, and we have each bank subject to minimum standards of security so that the vast majority of customers will not face problems if a bank fails. Or are you seriously going to tell me that the magic fairies of the invisible hand of the market are going to prevent these collapses in the future?

Re:Regulation of currency

[Anonymous Coward]

Y'all missing the point, nimrods. None of those companies mentioned were involved with a gay card game.

Re:Regulation of currency

[DarkOx]

In those markets, people's time is expected to be worthless. Every person is expected to spend lots of time reading up on all sorts of stuff that is irrelevant in a well-regulated market.

No its not worthless its an investment in risk management. Your alternative is they invest tax dollars in paying a small army of regulators and politicians to in theory look out for their interests instead. Look how well the events of 2008-2013 show that works.

And don't try say it was because of "deregulation" it was because of changed and stupid regulations not deregulation which has essentially never happened in finance. Real deregulation would mean repealing laws without replacements. When most of our politicians say "deregulation" what they really mean is we are giving a select group of already successful incumbent operators a license to steal.

Re:Regulation of currency

[F. Lynx Pardinus]

Volatility is a weakness, not a strength, for a digital currency. It's fine to be volatile when a currency is just starting out, but no supporter should be excited by it or want more of it.

Re:Regulation of currency

[drinkypoo]

I mostly agree with you, bitcoin fans are living in denial.

However, a "safe" way to manage your bitcoins is to keep them in multiple distributed wallets that you control.

And the idea IS that the invisible hand will eventually prevent these collapses. In the meantime, there will be more of them. That can only happen if the invisible hand stops fucking you, also. Otherwise it's too busy.

Re:Regulation of currency

[delt0r]

Like i said. Read some of the history. Its not pretty.

Re:Regulation of currency

[delt0r]

I do also agree with this. But its worse than make people "rich". It means people hoard. This is not useful for a currency or for an economy for that matter.

Re:Regulation of currency

[Karmashock]

Bitcoin isn't though in the sense that this money was actually STOLEN.

With fractional reserve banking you can rob a country of trillions and it isn't technically stealing. These bitcoins were STOLEN.

Like and old school bankrobbery where some guy breaks into the bank and walks off with boxes of gold coins. Stolen.

And the issue with these bitcoin exchanges is that they were not handling transactions securely. Bitcoin itself is secure. But they made compromises when they set the exchanges up and guess what... that was enough to allow all their money to be stolen.

We've gone over this repeatedly. Had they used bitcoin's own encryption and hash system per transaction they wouldn't have been robbed in THIS way. Possibly they would be robbed in another way. But you learn.

This robbery should go down as a lesson in how NOT to secure a bitcoin exchange. Not that bitcoins themselves are flawed.

So far as I know, no one has found a flaw in bitcoin itself.

So no... it is not the same as fractional reserve banking.

Re:Regulation of currency

[Connie_Lingus]

"Maybe some naive kids who got a lot of coins by being in the right place at the right time think that. If they do it will cost them dearly. "

i don't really think any "kids" who mined bitcoin early on enough to really hit a lick would be dumb enough to store them at mt. gox...so its not like they lost anything.

Re:Regulation of currency

[ConfusedVorlon]

unacceptably high for whom?

There are plenty of cases where the cost/risk might be acceptable.

If I want to buy something for $100 and anonymity is important, then I may well be happy to risk losing my $100.

Similarly if I have a bunch of illicit cash and I can convert it into bitcoin - I might be willing to risk losing it rather than risk it coming to the attention of the authorities.

Is bitcoin suitable for your average person to store their pension savings? Almost certainly not. That doesn't mean the cost (risk) is unacceptably high for everyone though.

Re:Regulation of currency

[Sockatume]

Yes, it is a problem when three months of growth in an investment is wiped out overnight, especially if you bought in during that period. It's even worse news for anyone who wasn't investing and was trying to use Bitcoin to actually buy things.

Re:Regulation of currency

[Anonymous Coward]

I've made 500-1000% returns in the last year on some of my more risky portfolio choices (i.e. Tesla). Trying to pretend bitcoin is a real currency, and then bragging about it's volatility is... quite silly.

Short term asset speculators want high volatility in an "investment" (the goal being quick jumps in price), but the worst possible quality of a "currency" is high volatility.

Re:Regulation of currency

[Anonymous Coward]

That is another failure with under-regulated markets. In those markets, people's time is expected to be worthless. Every person is expected to spend lots of time reading up on all sorts of stuff that is irrelevant in a well-regulated market.

No.

The market doesn't expect everyone to do all their own research any more than it expects everyone to grow their own food. Division of labour applies just as well to information as it does to production.

The more troubling element of your claim is that regulation somehow solves the problems. What if a regulator makes a mistake?

Re:Regulation of currency

[Anonymous Coward]

> On the whole BitCoin fans don't think that.

From speaking to Bitcoins fans, yes, they do. I can actually *see* the reversed print on their foreheads from where they fell asleep and rested, their excited, sweaty brows on the copy of "Atlas Shrugged" someone told them they should read, now that they're going off to college.....

Re:Regulation of currency

[Anonymous Coward]

Bitcoin is not anonymous. You are much better offer popping your $100 bill in an envelope and mailing it.

Re:Regulation of currency

[Anonymous Coward]

You obviosuly werent around for those casual friday strip-poker games at the mentioned places.

Re:Regulation of currency

[taiwanjohn]

Real deregulation would mean repealing laws without replacements.

Just out of curiosity, what "replacement" was enacted after the repeal of Glass-Steagal?

Re:Regulation of currency

[Anonymous Coward]

Bitcoin is still in the "buy-in" phase. Without people backing it with something, it won't be used as a currency. The total valuation is a few billion USD at the moment. Is that enough to trust it for everyday commerce? Definitely not. If you use Bitcoin now, you're an early adopter, and early adopters are rewarded for taking high risks (or, if things don't work as they expect, they lose their investment). Was the internet a viable replacement for book shops or phone networks when it went "mainstream" in the 90s? No, but some believed that one day it would be. That Bitcoins are mostly not used as a payment system now doesn't mean that it never will. People are investing in that vision.

Deflation doesn't mean that nobody will ever spend their money (in the hope that they can buy more later). The decision to spend or keep the money depends on the perceived value: If you want to have something now more than you want to have later what you can have then, then you spend, otherwise you keep. That is exactly the same decision you make in an inflationary system. The kind of inflation that most people find acceptable doesn't even make a psychological difference, or do you feel pressed to spend now or lose your savings to inflation?

Re:Regulation of currency

[Anonymous Coward]

Exactly. Who'd buy electronics from a company that was founded for making rubber boots?

No one, if they sold their soul to Microsoft.

Re:Regulation of currency

[Anonymous Coward]

The cost of doing business with BTC is unacceptably high when every person needs to do their own research.

You certainly have to be more careful, but on the other hand the average tax payer won't have to pay for the MtGox collapse like they did for the banking crisis.

Re:Regulation of currency

[Anonymous Coward]

You can't lose assets you don't put on the table, just like walking through the door at the casino. Don't bring your life savings and you won't lose them.

Re:Regulation of currency

[Anonymous Coward]

If you bought things when bitcoin was at $1200 this is great news.

Re:Regulation of currency

[r.freeman]

Ok, so we have two cases:
1) just use bitcoin to send money. Then price changes are tollerable, and they will stabilize (they jump now - around big events)
2) use bitcoin as long term investment. While there are many other opportunities to hoard/store/invest money which are also good, bitcoin works out fine too, in long term it is always an up trend in 3-12 month period

Re:Regulation of currency

[rmstar]

The more troubling element of your claim is that regulation somehow solves the problems. What if a regulator makes a mistake?

You make it sound as if regulation was something completely exotic. Regulation actually exists, and there is plenty of it. To answer you question: If regulators make mistakes, they are eventually corrected. Happens all the time.

Re:Regulation of currency

[chill]

Great! Then those people who just stole $400+ million by siphoning BTC from Mt. Gox wallets will be caught! Nothing to worry about at all!

Re:Regulation of currency

[Anonymous Coward]

Wow. You completely missed the point. Let me spell it out for you and maybe, just maybe, you'll expand beyond the mental age of 12.

If I put $50,000 in a real bank, and they go bust, the FDIC gives me my money back. If I put $50,000 into btc and the exchange steals it, I'm out $50 large. That is how regulation solves the problem.

Dumbass

Re:Regulation of currency

[Anonymous Coward]

> 'your bitcoin in, a bitcoin out on request' offer, at which point you are back in fractional reserve territory.
Also money laundering.

Re:Regulation of currency

[NapalmV]

And what happens if FDIC goes bust too?

Re:Regulation of currency

[Anonymous Coward]

Ultimately nothing is completely certain in this world. If both the bank and FDIC go bust, it indeed is a serious trouble. What can I say to that really. But the well-established double layers of trust is still much better than in the case of Bitcoin.

Re:Regulation of currency

[Anonymous Coward]

Actually it IS immune to the things that are wrong with normal currencies.
First and foremost it is immune to inflation. It is immune to the FED printing more of it at will.
and so on and so fourth.
MTGox has absolutely nothing to do with bitcoins strength or lack thereof as a currency. It was simply an exchange, which quite frankly is not required for bitcoin to function. All of the exchanges can crash and burn for all I am concerned, and bitcoin still stands.
Third of all, a poorly run company crashed and burned .... GOOD. VERY VERY GOOD! thank god they didn't get bailed out !
This is how capitalism is supposed to work. Free market. This brings us to the other big problem with the current system ... the DE-Risking of capitalism.
All of this "too big to fail" nonsense ... bailouts etc ... that is not how its supposed to work. When institutions become insolvent they should fail, they should cease to exist. Not get bailed out.

Re:Regulation of currency

[Dan541]

I'm still waiting for cash withdrawals since July, the writing was on the wall back then. In fact I was in the process of bailing out of Mt Gox when my last few transactions got stuck.

Re:Regulation of currency

[Dagger2]

It sounds like you don't want regulation of Bitcoin per se, but instead regulation of exchanges. Or, more generally, you want regulation of anybody to which you give money with the expectation of getting it back. I'd expect that legislation to exist already, because the concept of "a company which holds on to your money for a bit" is one that's existed for a long time before Bitcoin.

As an aside: as far as I'm aware, Paypal does not come with this protection in the US. They can take your money, and there's sod all you can do about it. In Europe, Paypal is a bank... but actually, according to their website, don't qualify for deposit protection anyway, so they can happily go bust and your deposits won't be covered.

It's notable that people still use Paypal.

Re:Regulation of currency

[Anonymous Coward]

The problem i have with bitcoin and bitcoin fans, is they seem to think bitcoin is somehow immune to all the things that went wrong with normal currencies. Its not.

It's a natural consequence of people wanting an unregulated 'free market'.

What they forget is that people are naturally either crooked douchebags or incompetent ...the regulations were set up to protect against those types of thing.

If you're going to have a currency which is essentially the wild west, you will get this kind of thing. Pretty much the same as you'll get in any segment which isn't regulated -- you'll get malicious players, and people taking advantage of the ones who aren't qualified to look out for what they've been entrusted with.

All the people asking for all government regulation to be taken away have no fucking clue of what they'd really end up with. It sure as hell won't be the romanticized utopia they think it would be.

Re:Regulation of currency

[Anonymous Coward]

> The problem i have with bitcoin and bitcoin fans, is they
> seem to think bitcoin is somehow immune to all the
>things that went wrong with normal currencies. Its not.

The problem is you dont understand what bitcoin does yet.

Either wait and see, or else contemplate deeply about what a borderless, trustless, decentralized system of currency will cause to occur.

Once you have done so, it becomes clear that there isnt an agency with the real power to regulate it.

Re:Regulation of currency

[mrlibertarian]

In a free market, there would be far more exchanges to choose from, and so it would have been much harder for a poorly-managed exchange like Mt. Gox to rise to the top. The reason that there is a scarcity of bitcoin exchanges to choose from is not due to too little regulation; it is due to too much. The anti-money laundering laws in the U.S., for example, scare most banks away from anything that is related to bitcoin, and that makes it very hard for law abiding citizens to start an exchange in the U.S. Why do you think that Coinsetter, a NYC-based forex trading platform, does not offer a way for U.S. citizens to deposit dollars? It is not because they are scared of competing; it is because they are scared of what the U.S. government will do to them.

That being said, even in a free market, there would be failures. No one really thought that Mt Gox would manage to lose all of the bitcoins in its cold storage. That's just breath-taking incompetence. But the flip side is, people have learned a lesson. Unlike the modern banking world, there are no moral hazards here, and that's a good thing.

How do we prevent a Mt. Gox style collapse in the future? By having auditors come in and making sure that companies are actually following security best practices. For example, storing bitcoins in cold storage (which makes hacking impossible), and protecting those bitcoins with multiple signatures (so that no one person inside the company can steal them). If the government would just give out of the way, this would happen naturally. But most people expect the government to act as the referee, so the government will probably mandate the regular auditing of exchanges. The government will take credit for making the bitcoin world safe, when in reality, the government was never needed, and, worse, they facilitated our current situation by making it tough for good actors to enter the market.

Re:Regulation of currency

[Anonymous Coward]

Poorly managed , unethical, non-viable , etc institutions SHOULD fail. This is a feature of the free market.
All of this De-Risking of capitalism as of late is the whole problem with the current system... the too big to fail, bailouts etc.
No No NO!

Exchanges are NOT necessary. Bitcoin stands without them, there is in fact no absolute need to transfer value from Fiat currencies into bitcoin.
Bitcoin can create its won economy completely outside of the USD framework. That is not to say that exchanges are bad, they are helping bring awareness.
and transferring fiat value into bitcoin does certainly speed up the process of creating and pegging value.

MTGox was a bad idea from the getgo, you keep saying 6-9 months, ... people who understood bitcoin knew it was bad from the very beginning.
you were giving your funds to an institution who kept everyone's funds in a single wallet. that never should have happened. It should have been set up like blockchain.info where the user retains control of the funds via individual wallets that they still control the private key to.

None of what you said is anything more than some pessimistic nonsense trying to seem self important like you see through the supposed bu11sh1t , but your just the same as the guys back in the early 90's that said the internet was a stupid idea.

I really don't get the impression Bitcoin's fans are the paragons of rationality you're painting them as. And in particular, I take exception with the quote "don't throw money at companies that look shady as hell like MtGox did before it blew."

Some observations:

1. I've read numerous op-eds (op-eds!) over the past week suggesting Mt. Gox's collapse has made everything safer because there's one less bad actor, and those who remain in the Bitcoin world are more mature.

2. There's no recognition that Mt. Gox was, until 6-9 months ago, a highly regarded exchange that was frequently recommended, cited, and so on. It didn't corner the percentage of the market it got to despite everyone thinking it was "sleazy". It got there because of word of mouth. Suddenly it "always sleazy", "everyone knew", and "OMG it was originally something to do with Magic: The Gathering, right?"

3. Many now claiming they "always knew" and are citing things they said 6-9 months ago, after Mt. Gox had already started collapsing and after it had started to become problematic getting money out. Presumably the same people would have said "I always knew the Titanic was badly designed, look at this transcript of a conversation I had on the deck at 12.30am on 15th April 1912. This is what represents "doing research" in the Bitcoin community?

4. Many are now pretending that Mt. Gox provided an unnecessary service and are finding other reasons to blame the victim. What exactly is a "safe" way to manage Bitcoins if you're technically skilled (or are generally technically skilled but also more than aware that you frequently overestimate your own competence?)

5. Where, seriously, are the serious proposals to make Mt. Gox style collapses impossible in the future? In the regulated dollar world, we have the FDIC, and we have each bank subject to minimum standards of security so that the vast majority of customers will not face problems if a bank fails. Or are you seriously going to tell me that the magic fairies of the invisible hand of the market are going to prevent these collapses in the future?

Re:Regulation of currency

[jythie]

Yeah, but people do not actually like Paypal. Paypal survives by inertia and eBay integration. Sellers use them because buyers are registered with them. Buyers use them because sellers are registered with them. They are terrible, but people who break away from them just find themselves with fewer opportunities.

Re:Regulation of currency

[Anonymous Coward]

Oh and to answer no 5. I hope those proposals do not exist.
risk is good.
Bitcoin is not risky, the math is sound.
The industries that spring up around bitcoin should however be subject to risk
De-risking = kills innovation.
let the failures fail imo.

Re:Regulation of currency

[Dagger2]

The cost of doing business with BTC is unacceptably high when every person needs to do their own research

Indeed, but doing it that way isn't a requirement for Bitcoin.

There is already at least one service that takes all of the research out of it from the seller's perspective. Customers pay into a Bitcoin address; all the seller needs to do does is sign up, integrate it into their checkout system and they get money in their bank account at the end of every day.

All we need now is a similar service for the customer end. The obvious way to do it would be a service that takes a credit card payment and turns it into a Bitcoin payment, although there would also be room for services that take bank payments or whatever's useful. (Perhaps somebody has done this already, but I don't know of an example off-hand.)

Both of these services take the responsibility of research off of the payer and payee. They also bundle up all of the risk associated with the exchange rate and turn it into fixed fees. (This is where they make their money: insuring against risk, making sure, as with all insurance, that they statistically get paid a profit overall.)

And now perhaps you're thinking "wait... what's the point of Bitcoin if I'm just going to use a credit card with it anyway"? Well, it's like the point of e-mail when we have Facebook Mail. Or the point of the Internet when we have CompuServe Information Service.

Re:Regulation of currency

[JoeMerchant]

Monkeys do better than people in the stock market - I'm sure they did lots of market research beforehand though.

But you really want a rate of return better than a monkey, otherwise you might as well invest in index funds, how boring is that?

So the trick is to identify when people, in general, are being less-smart than monkeys and then run in the opposite direction.

It's not an easy business, outsmarting the monkeys - that's why it's better to be lucky than smart.

Re:Regulation of currency

[jythie]

Well, that is part of the appeal to adherents. They do not want a currency to expand or contract to fit use. They have gotten ahold of some alternative history where the gold standard was actually a good thing and believe that a deflationary currency will improve the economy since investment is for takers.

Re:Regulation of currency

[Anonymous Coward]

"Or are you seriously going to tell me that the magic fairies of the invisible hand of the market are going to prevent these collapses in the future?"

Think about this for a second.
ALl of this de-risking behavior we have seen for the past 50 years. What is it really. at its core... ??
I would suggest , if I may, that it is nothing more that subsidizing the risk and sweeping it under the rug?

the way the free market SHOULD work is things that do not deserve to exist should fail hard and fast, in the beginning. i.e. as soon as they can no longer stand on their own they should die. When you regulate, and bail out, etc what are you really doing? You are sweeping the risk under the carpet to fester, and subsidizing the continued existence of something that does not deserve to exists. so now instead of having rapid failure, and clearing of risk at the edge, you have the accumulation of unrealized risk at the center, piling up. and now we find ourselvs at present, with 14 trillion in debt, and a broken system.
and when it fails ... it is not going to be pretty.

The de-risking of capitalism will be our downfall.

Re:Regulation of currency

[njnnja]

And what happens if FDIC goes bust too?

One of two things: Congress bows to public pressure and raises taxes to fill FDIC's coffers, or the Fed bows to public pressure and prints money and gives it to the FDIC.

Surely there are winners and losers in that kind of situation, but in general, the "regular folk" who have less than $250K in the bank will be made whole, and the burden will fall on whoever has insufficient political power. But in my mind it is a much better social result than taxation based on one's inability to select a good business with which to store your money, which is both idiosyncratic and acute.

Re:Regulation of currency

[squiggleslash]

However, a "safe" way to manage your bitcoins is to keep them in multiple distributed wallets that you control.

OK, but would you describe this as an straightforward solution that most people would instinctively do, and find easy to set up, use, and maintain?

(Yes I'm aware there's a missing "not" in the sentence where I asked for a solution to this - my bad, it was supposed to be there, I'm hoping the condition that immediately followed made that clear - and so it probably seems unfair to suddenly impose this condition on something that was supposedly a solution for the "technically inclined", but I'm hoping you'll understand that to keep the conversation useful, we need to look at solutions that work for the widest possible audience, otherwise we can't really determine what can make Bitcoin viable.)

Re:Regulation of currency

[nitehawk214]

But you really want a rate of return better than a monkey, otherwise you might as well invest in index funds, how boring is that?

If you want to gamble with money in an exciting way; I suggest going to Vegas.

Re:Regulation of currency

[westlake]

Bitcoin is still young. This is a time or risk and opportunity. Besides, if you really think anyone should invest money...

Bitcoin first has to prove itself as a currency.

Promoting Bitcoin as a money-maker --- an investment opportunity like tulip futures --- will destroy it.

Re:Regulation of currency

[NapalmV]

So you're being "made whole" either from taxation or inflation, i.e. from your own money. Which means you still have lost that amount (directly or through reduced purchase power). No word on what should happen to the guys that ran away with the loot?

Re:Regulation of currency

[Anonymous Coward]

in long term it is always an up trend in 3-12 month period

Hello, irrational exuberance.

Re:Regulation of currency

[westlake]

database management from an online bookstore

The high volume retailer is the right place to go if you are studying the successes and failures of database management.

Re:Regulation of currency

[carnivore302]

7 out! Line away!

Re:Regulation of currency

[bberens]

Theoretically if money in your bank account "vanished" in the way the bitcoins are believed to no longer be in circulation and the government printed an equal amount for the FDIC to give you, there would be zero inflation. And generally speaking for even rather large banks the amount of funds on deposit (that are FDIC insured) is such an insignificant proportion of the amount of currency in circulation that it is not even a blip on the inflation radar.

Re:Regulation of currency

[bberens]

You can use nearly arbitrarily small fractions of bitcoins. Denominations of all currency are completely arbitrary. We could call one billionth of a bitcoin the bitbuck and start selling and trading in bitbucks. Now we have a billion times more bit currency units to do stuff with. If Bitcoin sticks around, I highly suspect his is exactly what will happen.

Re:Regulation of currency

[Dagger2]

Sure would be nice if we had a system where sellers could switch their provider while still selling to the same buyers, and where buyers could switch their provider while still buying from the same sellers.

Oh wait.

(I made this post further up in the thread describing this, so I'll just link to it rather than repeat myself.)

Re:Regulation of currency

[JesseMcDonald]

Hypothetically, you might be able to prevent most leverage-providing instruments if all depositors deposited a specific bitcoin, with the right to demand that specific one back...

There is no such thing as a specific bitcoin; it's an abstract unit. If you simply want to store your bitcoins securely, at practically zero cost, there are numerous "paper wallet" systems available, as well as multi-key wallets at various points on the convenience/paranoia continuum.

If you want to receive interest, however, then you have to recognize that you are making a loan—which implies the possibility of default. Interest-bearing accounts are investments, and you should not expect to be insured against investment risk. The best you can expect here is a traditional audit arrangement.

Re:Regulation of currency

[Anonymous Coward]

Exactly. Who'd buy electronics from a company that was founded for making rubber boots?

No one, if they sold their sole to Microsoft.

Fixed.

Re:Regulation of currency

[Anonymous Coward]

More to the point, who would trust a company whose coder implemented ssh in php?

Re:Regulation of currency

[spikenerd]

If you want to gamble with money in an exciting way; I suggest going to Vegas.

The folks in Vegas don't take it well when you try to use your intellect to improve your odds. The market, however, permits it. That is a pretty-big difference. Frankly, I do not find games that come with restrictions about how I can use my brain and electronic extensions to be nearly as exciting.

Re:Regulation of currency

[njnnja]

It depends on the definition of "you." In the second person plural sense, where "you" includes every taxpayer (in scenario 1) or includes every user of the currency (in scenario 2), then yes, "you" are just made whole with "your" own money. But in almost any normal usage of "you," there are certainly different winners and losers, depending on who had money in the failed institution and depends on receiving money for goods and services from those people (the winners) or who gets hit by the increased taxes, or has assets that get hurt by inflation (losers). The set of individuals for which those two effects are large but cancel each other out is infinitesimally small, so realistically no one is being made whole by their own money.

Re:Regulation of currency

[Copid]

The failure mode of the FDIC is "everybody stops beliving the FDIC and banks will pay out and pulls their money out of banks all at once." That failure mode can be prevented. It's something you can do with an implicit guarantee of "infinite" tax dollars without actually spending any tax dollars.

Re:Regulation of currency

[squiggleslash]

There is already at least one service that takes all of the research out of it from the seller's perspective.

I changed the link both because I'm a deeply horrible person underneath, and to kinda sorta explain my reservations with what you just said...

Re:Regulation of currency

[Copid]

That would be fine if money was all about flows and units of measure, but there are stocks of money and contracts specifying future flows as well. If one day a sandwich costs a bitcoin and a year later, a sandwich costs a bitbuck, roughly speaking, the value of bitcoin is up by a factor of a billion. That means that if you have a bank account full if bitcoins, you're a billion times richer. It also means that if you owe somebody bitcoins, you're a billion times deeper in debt. Inflation and deflation have real economic effects that go well beyond printing new price sheets.

Re:Regulation of currency

[NapalmV]

The cases where the FDIC insured stuff just "vanishes" are very rare. It would be something like cash lost in a fire. Then indeed printing a replacement won't change anything. In reality that cash is not lost - it just changes hands, ending in the pockets of an unscrupulous banker and his acolytes. Now if you're printing a replacement you got more money than before, and exactly the same quantity of goods / services to buy. What will happen?

Re:Regulation of currency

[Solandri]

That is another failure with under-regulated markets. In those markets, people's time is expected to be worthless. Every person is expected to spend lots of time reading up on all sorts of stuff that is irrelevant in a well-regulated market.

But that is how markets improve. Someone reading up on all that stuff finds something everyone else thought was irrelevant but turns out to make a difference, regardless of whether the market is well-regulated or unregulated. Just because you want to be lazy and have someone else (whether a government regulator or an investment broker) do all that reading for you doesn't make this aspect of the market go away.

New economic growth comes from people trying new things, go figure. If everyone divorces themselves from that, the market stops growing.

Re: Regulation of currency

[Anonymous Coward]

Deduction: Poster is using weak inductive reasoning.

Conjecture: Abductive and deductive reasoning are better suited for this analysis.

Conclusion: Weak argument.

Re:Regulation of currency

[Wootery]

Not only are you hopelessly wrong about Bitcoin not being anonymous, as chill pointed out, but you seem to have also missed the memo that the US government is tracking snail-mail on a massive scale.

Re:Regulation of currency

[Rakarra]

The lifetime investment market is all about gains over the long term, which implies reducing risk the closer you come to retirement. When you're 60, don't invest the same way you did when you were 30.

Re:Regulation of currency

[Anonymous Coward]

Sure, but I use paypal for *payments*... it's all the same to me if someone using it as a money storage company loses their money. I don't leave any money in paypal's coffers.

Re:Regulation of currency

[Rakarra]

How do we prevent a Mt. Gox style collapse in the future? By having auditors come in and making sure that companies are actually following security best practices.

Oh. So.... that sounds like strong regulation?

But most people expect the government to act as the referee, so the government will probably mandate the regular auditing of exchanges.

People expect the government to act as the referee because bad actors cannot be trusted to regulate themselves.

Re:Regulation of currency

[Anonymous Coward]

ROFLMAO highly regarded eh? bernie madoff much?

Re:Regulation of currency

[Anonymous Coward]

No, you missed the three counter points that indicate a company can completely re-brand itself successfully. But I see you called it a gay card game. It sounds like you're just a Magic the Gathering bigot.

Re:Regulation of currency

[Dagger2]

Yep. That's how to do it with Bitcoin, too.

Re:Regulation of currency

[g0bshiTe]

Or say, knowing not to store you wallet on an exchange?

Re:Regulation of currency

[drinkypoo]

However, a "safe" way to manage your bitcoins is to keep them in multiple distributed wallets that you control.

OK, but would you describe this as an straightforward solution that most people would instinctively do, and find easy to set up, use, and maintain?

Nope. If enough people want to use bitcoin, though, a major bank will act as an exchange. In the meantime, it's a toy.

Re:Regulation of currency

[Dagger2]

My response to that is roughly covered by this post, so I'll link to it rather than make this reply even longer.

Also, consider what position Mt Gox occupies in the picture I described above. I gave two examples of customer-end companies, both of which transferred money from a bank account to the customer processor and then, via Bitcoin, on to the seller processor. Mt Gox was essentially the first two steps rolled up into one: a bank that is also the customer-side processor for the payment. People lost money with Mt Gox because they were using the bank aspect of it, and had money deposited in it.

Deposit protection regulation for banks does sound like a good idea to me. As it happens, we already have this for existing banks, and those banks can be used to store the money that eventually gets paid to somebody via Bitcoin, so you won't lose the deposit guarantee just by using Bitcoin. Presumably this protection would also continue to apply to a bank that starts making Bitcoin payments directly. It might not, for whatever reason, apply to a Bitcoin payment processor that starts taking bank deposits (i.e. the Paypal case)... but in that case, regulation for the Bitcoin market won't help, because it's the deposit protection that needs to be fixed. (Or perhaps it doesn't, because Paypal seems to be fine without it...)

Bootnote: there's a second class of people that lost money with Mt Gox flopping over, namely the people who were storing bitcoin outside of Mt Gox and are now affected by the reduced exchange rate. Who are these people? They aren't regular users (either buyers or sellers), because those users will use Bitcoin via the payment providers that I described.

These people are a) the payment providers themselves, and b) speculators. For payment providers, dealing with changes in exchange rate is their job. They'll set their own exchange rate to be slightly worse than the real exchange rate (essentially as the fee for the transaction). In order to lose money, the exchange rate has to drop by more than the fee for the transaction -- and if that happens, they cover the loss with fees from all their other transactions. (And if the rate goes up? They get to keep the extra money.)

Risk is the name of the game for speculators too. They're gamblers; they're there because of the risk, with the idea being to make enough money on exchange rate jumps to cover losses on exchange rate drops.

I don't think we should try to protect the second group of people. The first group would benefit from anything that lowers the exchange rate volatility... but I believe (with bitpay.com as my evidence) that the volatility is low enough to make their service commercially viable even today, and that'll only get better if more people use Bitcoin. So we don't need market regulation for them, either.

Re:Regulation of currency

[Anonymous Coward]

> Many now claiming they "always knew" and are citing things they said 6-9 months ago,

So what? Up to right before the withdrawal ban, it was still possible to easily get your money out, as long as you were willing to accept maybe 10% loss. Hell, even during the withdrawal ban, you could still get your money out (albeit now with 40% loss on #mtgox-otc).

Re:Regulation of currency

[rastos1]

Paypal is a bank... but actually, according to their website, don't qualify for deposit protection anyway,

The link says:
Since the service provided by PayPal Europe is limited to E-money, which does not qualify as a deposit or an investment service in the sense of the Law, customers of PayPal Europe are not protected by the Luxembourg deposit guarantee schemes

What is "e-money"? My employer does a wire transfer to deposit my salary on my account in the bank. Is that not e-money?

Re:Regulation of currency

[rastos1]

I managed to find this: the PayPal page refers to Association pour la Garantie des Depots Luxembourg - which in Law of 10 November 2009 Article 1, paragraph 29 says:

(Law of 20 May 2011)
"electronic money" means a monetary value represented by a claim on the issuer, which is:
(i) electronically, including magnetically, stored, and
(ii) issued on receipt of funds for the purpose of making payment transactions, and
(iii) accepted by a natural or legal person other than the electronic money issuer;

Can someone translate that to English, please?

Re:Regulation of currency

[Anonymous Coward]

You mean the executives at MTGox? I am sure they covered their tracks well, if not I am doubly sure some of the shadier people that used them to launder their money will ensure they meat with short sharp accidents.

Re:Regulation of currency

[Anonymous Coward]

You seem to miss the point he was making. It's really irrelevant weather bitcoins today is itself anonymous. The point he was making was that not all value is derived from its stability or its value increasing. While many/most people won't value certain qualities of a medium of transfer (since I know you'll tell me its not a currency, and that's fine, but it's nitpicking) its rather irrelevant as long as a sufficient number put a high value on that quality.

Re:Regulation of currency

[avandesande]

Until 6-9 months ago they weren't dealing with holding millions of dollars of bitcoin. Kind of like your kid putting a go cart together out of plywood that goes 5mph vs 100mph. Which is the dangerous one?

One thing I don't understand is why people didn't start withdrawing their bitcoin to a local wallet when things started to stink... why would you wait for cash?

Re:Regulation of currency

[JoeMerchant]

But you really want a rate of return better than a monkey, otherwise you might as well invest in index funds, how boring is that?

If you want to gamble with money in an exciting way; I suggest going to Vegas.

I've never been to Vegas, I did make a low pass at a Roulette table on a cruise ship once, I was astounded to find that Red/Black bets paid back $0.60 on the dollar. So, bet $1 on Red, if Red comes up, you get to keep your dollar and the house gives you $0.60 additional - woo hoo, but if Black comes up, you lose your dollar.

How drunk do you have to be to ever think that's a good idea?

Re:Regulation of currency

[Copid]

FDIC should not have existed in the first place, it is a moral hazard, where bank clients do not pay any attention what the banks do with the money.

Bank runs don't necessarily mean the bank was doing something wrong. It could just mean that depositors are worried that the bank might be doing something wrong. Or they might be worried that other depositors are worried. Or they might be worried about banks in general. The whole point is that self-fulfilling prophecies are even more problematic than actual banking problems, and the only way to prevent them is an insurance scheme.

Re:Regulation of currency

[mythosaz]

I did make a low pass at a Roulette table on a cruise ship once, I was astounded to find that Red/Black bets paid back $0.60 on the dollar. So, bet $1 on Red, if Red comes up, you get to keep your dollar and the house gives you $0.60 additional - woo hoo, but if Black comes up, you lose your dollar.

How drunk do you have to be to ever think that's a good idea?

I have no clue what game you played.

Roulette pays even money on Red/Black bets. Your $1 bet gets your $1 returned plus $1.

A roulette wheel either has a single "0" or two zeros "0" and "00" which are green. Combine those with a 18 red and 18 black numbers, and you'll find that Red/Black bets have about a 2.7% or a 5.3% house edge. Every dollar you bet Red/Black, over time, will cost you 5.3 cents playing in Las Vegas.

http://en.wikipedia.org/wiki/R...

A quick internet search shows nobody else reporting such a weird roulette game.

The question remains: Why lose a nickel every time you bet?

Answer: For some people, it's fun.

Re:Regulation of currency

[mythosaz]

The idea that MtGox didn't have some of their funds in a separate wallet boggles my mind.

Manually bringing the next 100 million online couldn't have been worse than losing it all due to bad programming.

They should have been -- virtually speaking -- typed up in an envelope in a safe with the passwords at their lawyer's office.

Re:Regulation of currency

[petermgreen]

There are two possbilities I can see for the government trying to regulate bitcoin.

One option is to do a 51% attack, this would let them arbiterally block transactions from confirming, they could then demand whatever registration requirements they wanted to get your transactions to confirm. Last I ran the sums doing a 51% attack on bitcoin was expensive but almost certainly within the capabilities of any major world government.

The other option is to treat bitcoin like cash. AIUI governments let people use small ammounts of cash pretty freely but if anyone tries to deposit a large ammount of cash they had better have a good explanation of where it came from or it may not be theirs much longer.

Re:Regulation of currency

[JoeMerchant]

Carnival cruise lines, that was how their table was labeled in the felt, and when I asked the attendant they confirmed the payouts... seemed insane to me, especially with a killer free buffet down the hall...

Re:Regulation of currency

[Jack Griffin]

Reminds of a something I heard a professional gambler say. "The best way to win at a casino is to find a loser and bet against them."

Re:Regulation of currency

[mythosaz]

Perhaps you drank too much.

I've read numerous casino-at-sea reports over the years, and NEVER, EVER have I seen such a game. It's never been mentioned anywhere on the internet, it's never been discussed at WizardOfOdds or any of the large gambling forums.

Carnival operates standard "American" double zero wheels with normal payouts.

Re:Regulation of currency

[ultranova]

Bitcoin first has to prove itself as a currency.

Bitcoin has done so, time after time again, in a market where "cutthroat competition" isn't metaphorical. It works fine. What it currently lacks is price stability, so it could be adopted by various Internet-based legtimitate retail shops like Steam and GoG.

Re:Regulation of currency

[JoeMerchant]

Well, this was 1986ish, before that internets tube thing caught on, so, maybe they've changed their ways... the tables were pretty damn empty.

Re:Regulation of currency

[romons]

Recent statements by Warren Buffet suggest that, in his view, most people would be better served by putting 90% of their wealth into the Vanguard SP500 fund, and keeping 10% in cash/short term t bills. He is setting this up for his wife in his will.

Here is the article

The best way to win is not to play, at least the stupid games most investors play. Avoiding 'rookie moves' isn't possible for most people. For the most part, they aren't smart enough, don't have the education, and don't have fast enough access to information. This same advice has been around since Bogle started Vanguard.

Re:Regulation of currency

[Anonymous Coward]

You'll have much bigger things to worry about than a measly $50k

Re:Regulation of currency

[delt0r]

There is nothing about bitcoin that prevents it from being used in with a fractional reserve banking system. Its even in the FAQ.

Re:Regulation of currency

[Karmashock]

They can't print more of them past the theoretical maximum. So they can't inflate them.

They can take deposits and then loan out those deposits maintaining a fractional reserve of the total deposits. I don't have a problem with fractional reserve so long as I am getting a return on it.

Fractional reserve banking is supposed to be how banks make money. Today, they have credit cards... so they have multiple revenue streams.

In any case, my main beef is inflation due to currency devaluation. Bitcoin is immune to that because you can't print more past the theoretical maximum. It will cap. At which point it will be deflationary.

Re:Regulation of currency

[cwsumner]

..."Monkeys do better than people in the stock market" - I'm sure they did lots of market research beforehand though.

A surprising number of people get exited when it's high and buy stocks, and then get scared when it is low and sell it all. To quote an old phrase "Buy Low, Sell High".

Re:Regulation of currency

[cwsumner]

Bit coin is stupid because it can't expand and shrink to fit economic use. ...

Actually, that's one of it's advantages. Paper money is regularly inflated by governments to make a hidden tax. They can't do that with BitCoin.

More importantly

[Anonymous Coward]

...with Mt.Gox down for the count, the price depression caused by the uncertainty around Mt.Gox appears to be over. Bitcoins are up more than 6 percent in the last 3 hours.

Re:More importantly

[delt0r]

What a great currency.. Oh wait. No that would make too volatile to be a currency.

The General consensus is that it was pure fraud.

[blackicye]

http://hackingdistributed.com/...

after all...

[kefalonia]

...setting up a phone consolation center is so much cheaper than meeting all those expectations about monies!

Re:after all...

[pjt33]

If they do it right, they can even make a profit on the call centre and pay down some of their dollar/yen liabilities.

The Conversation

[mrspoonsi]

Bla..bla..bla..bla..your monies are safe..bla..bla..bla will just take a bit of time to sort out..bla..bla Who is going to believe whatever they say?

I was expecting...

[Anonymous Coward]

"Ha ha ha <click> ha ha ha <click> ha ha ha <click>"

If only...

[jtownatpunk.net]

If only there was a more efficient way to publish information and make it available to a large group of people.

Re:If only...

[DMiax]

That would limit it only to people that can use the internet. I, for one, applaud them for thinking of all their other customers!

Re:If only...

[Zero__Kelvin]

Yes. Won't somebody think of all the people who have crypto-currency but are unable to access the internet!

The K government is already planning to help

[cheros]

From the BBC:

"HMP Grampian will also have a dedicated unit for training prisoners for a return to work when they are released. The unit will include a telephone marketing centre."

The only problem I see that being in prison already makes trying to sign you up for a scam less of a risk for the operator, but I digress :)

Reality Intrudes

[Required Snark]

At some point in any belief system, reality demonstrates that the system is not a complete model of how the world works. Sometimes this is minor, and sometimes it's huge. If a believer becomes even more convinced that they are right after a extreme event, they have embraced delusional thinking. (Note: one of the differences between the scientific method and other belief systems is that new results are often are used as evidence to alter the belief, i.e. hypothesis, so the belief system expands.)

There are a lot of people these days, many of them readers of Slashdot, who espouse a belief system with a lot of delusional features: Libertarianism. This position, along with the similar political belief of the U.S. Republican Party, the British Torries and Canadian Conservatives share common beliefs. One prominent belief is that all government regulation of business is always evil. They are particularly adamant that financial regulation is always destructive.

An epic recent example is the admission by former U.S. Federal Reserve Chairman Alan Greenspan, who is self described as "lifelong libertarian Republican".

In Congressional testimony on October 23, 2008, Greenspan acknowledged that he was "partially" wrong in opposing regulation and stated "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity – myself especially – are in a state of shocked disbelief." Referring to his free-market ideology, Greenspan said: "I have found a flaw. I don't know how significant or permanent it is. But I have been very distressed by that fact." Representative Henry Waxman (D-CA) then pressed him to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said. "Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well." Greenspan admitted fault in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.

Matt Taibbi described the Greenspan put and its bad consequences saying: "every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over", thereby making it "almost impossible" for the banks to lose money. He also called Greenspan a "classic con man" who, through political savvy, "flattered and bullshitted his way up the Matterhorn of American power and ... jacked himself off to the attention of Wall Street for 20 consecutive years."

The failure of Mt. Gox is a inevitable consequence of an unregulated financial market. Bank failures were common in the U.S. from it's founding until modern baking regulation started after the Great Depression, when they became uncommon. This situation was stable until the Reagan Revolution, and steady removal of the previously working regulatory regime.

Greenspan is the poster child for the catastrophic effects of delusional right wing economic thinking, and the 2008 crash along with the current debt of the U.S. are the legacy. The world economy is still recovering from that disaster, and no one can say how long it will take for a full recovery. Note that the so called recovery of the financial markets is simply an extension of the policies that lead to the crash in the first place. What Matt Taibbi described is still happening: "they could go back to the Fed and borrow money at zero or one or two percent".

Bitcoin and other crypto-currencies are the high tech realization of delusional right wing economic thinking. They are ideologically founded on the idea of avoiding government economic oversight. Lack of regulation inevitably leads to a boom/bust cycle and poisons economic growth

Re:Reality Intrudes

[Anonymous Coward]

Fantastic post!! Kudos for mentioning Reagan and Greenspan in the same post. Somehow, people buy into their belief-system that for-profit systems can regulate themselves. History is littered with examples this is not so, however, as a free thinker you never know for 100% sure of course. But how can for-profit systems self-regulate, if they themselves can change regulation and laws (corruption) in order to gain even more power and monopoly? If their basis is growth, what is the price for infinite growth?

People have always believed the world is static, non-changing, or that it can be made into such a system. In reality, such seeking is the root of most delusions.
Most graphs that go parabolic or exponential, can turn on a dime with very little warning with catastrophic results.

Captcha: disquiet

Re:Reality Intrudes

[Sockatume]

Not quite true: self-organising systems can regulate themselves into surprisingly resilient equilibria. This is why the economy doesn't need constant micro-management; feedback loops like supply and demand tend to damp out perturbations. However there's no reason to suppose that any given equilibrium arising from any given set of constraints and feedbacks will be optimal for whatever outcome you're looking for, be it quality of life, GDP per capita, or whatever. The "laissez faire capitalism is implied by self-organisation" argument tends to assume without evidence that the best equilibrium is the one you fall into with the set of feedbacks and constraints that the proponent's flavour of laissez faire capitalism favours. However it's important to remember that there's no reason to assume that the equilibrium produced by the current set of rules is optimal, either.

It's also important to remember that if your system naturally falls out of its current equilibrium (which is a thing self-organising systems can do) you will need to change the feedbacks and constraints or apply an external force to get it back to where it was. Basically, you can't walk away and say "this system is inherently able to look after us, if we leave it alone", just on the basis of its being a self-organising system.

Re:Reality Intrudes

[fulldecent]

>> U.S. Federal Reserve Chairman ... who is self described as "lifelong libertarian Republican"

Stopped reading here

Re:Reality Intrudes

[Anonymous Coward]

If a believer becomes even more convinced that they are right after a extreme event, they have embraced delusional thinking.

This event supports the libertarian theory. Having greater confidence in the theory as a result is scientific.

Re:Reality Intrudes

[Rich0]

Bitcoin and other crypto-currencies are the high tech realization of delusional right wing economic thinking. They are ideologically founded on the idea of avoiding government economic oversight. Lack of regulation inevitably leads to a boom/bust cycle and poisons economic growth.

Bitcoin is only intended to solve the problem of money production and changing hands. It does not in any way address banking. It is a currency, not an economic system.

It basically solves the same problems as trading in gold solves - there is no inflation because the rate of production is well-understood. I can still rob you and steal your gold, and a bank you give gold to can still steal your money or lose it in a failure.

MtGox certainly illustrates the perils of giving your money to an unregulated bank. It doesn't really illustrate the problems with Bitcoin though, because Bitcoin doesn't address banking at all. Nothing prevents people from storing their Bitcoins in a regulated bank, other than the general unwillingness of governments to regulate it.

One thing Bitcoin does do is make it much more practical to run your own bank. Doing that with cash is fraught with peril, but it is at least reasonably practical to do it for Bitcoin. Certainly one can still do it badly and lose everything, and I'm not calling it the ultimate solution.

Re:Reality Intrudes

[Anonymous Coward]

Lots of words there but very little thought. Try for a moment to think some of these things through, think of it as a challenge.

"One prominent belief is that all government regulation of business is always evil."

Can you cite any Republican thinkers or conservatives advocating this specific thing? This is a serious question.

The conservative understands that some government is a necessary and good thing for a society. There is a very big difference between limited government and no government. Those who believe in no government are called anarchists but people who understand these things, and an anarchist is very different than a conservative.

The conservative believes in limited government with well thought out, clearly defined powers that are fair and equally applied to all in society. That's pretty much the entire philosophy right there. And this philosphy is pretty well exactly what was laid out by the United States Constitution many years ago.

Now we look at the situation we find ourselves in today and we find someone like you accusing and pointing fingers of blame, incorrectly asserting that the conservative seeks to remove all regulation from the financial sector and I think to myself, is this person a conservative himself? I strongly doubt it. Most likely I suspect that you are a liberal, or to put it more accurately a socialist, that is to say a statist. What do you say, am I correct? You seem to be advocating for more state regulation of society in general and the financial sector in the specific, are you not? Is my guess accurate?

Now I ask this for a reason and I am hoping we can have a conversation about this subject. You are asserting that the Republicans - that is the conservatives, and they are not the same thing at all, have removed - or sought to remove or at least call for the removal of "all government regulation of business" thus causing the financial mess we are in today. And your solution as a good statist therefore is to enact more and more intrusive regulation of the markets and society in general in the form of taxation, regulation and generally bigger and bigger government all the way around. Is that not what you are saying?

But let's work this through all the way.

Republicans are not running the show. Going back decades we see occasional Republican officeholders here and there, but the truth is that even when we see Republicans in office at one level or another the vast majority of time the Democrats have the reigns of power and by and large make all the laws. Heck, even when we do have someone in office that has R after their name, they don't act very conservative anyway. This is also a falsehood.

Now you also seem to be saying that the financial sector has been de-regulated. This is absurd, completely and totally absurd. I work in information technology, largely in the fincial services sector and can tell you from direct experience that banks and other finacial services businesses are probably the most regulated and controlled of all businesses there are. This is not a matter of opinion and if you know anything about what you are talking about you would understand this. Another falsehood.

So you are wrong about the nature of conservates in general. You are wrong about Republicans in the specific. You are wrong about the state of regulation in our society, and you are wrong about who is responsible for all this government activity.

And you advice is that we elect more statists and encourage them to create yet more and more regulation and grow government more.

Yeah, great fucking idea there genius.

Re:Reality Intrudes

[taiwanjohn]

Though I largely agree, I think you're over simplifying the story a bit. For example:

Bitcoin and other crypto-currencies are the high tech realization of delusional right wing economic thinking. They are ideologically founded on the idea of avoiding government economic oversight.

Are you sure about this? Certainly there are a lot of Libertarian "types" among the BitCoin fans, but was this the sole (or even primary) motivation for the inventors?

They have shown no ability to learn from the past.

While this is certainly true of many on the right (and the left, for that matter), there are also quite a few who either learned something or never believed the ideology in the first place. Most of these continue pushing the old line simply because it's their job, as designated by their corporate sponsors.

But there are a handful who seem to have genuinely learned something. Can't remember the guy's name, but he used to run CitiBank... that guy, about a year ago, basically came out and called for a Glass-Steagal type of separation between commercial and investment banking. David Stockman has called for tax reform (including increased revenue) to deal with the budget. There are others, but these are just off the top of my head... Trouble is, most of these "enlightened" conservatives are either retired or no longer involved with politics. The ones who are still "in the system" have to toe the line, and fight to keep the status-quo going as long as possible.

Re:Reality Intrudes

[BitZtream]

One thing Bitcoin does do is make it much more practical to run your own bank.

A lot easier to rob too, just grab the one server with the bit coin data on it and walk out the door, far easier than hanging out and breaking into a big heavy safe.

Re:Reality Intrudes

[taiwanjohn]

Republicans are not running the show.

Hardly matters. Both parties are more-or-less "owned" by the corporate oligarchy, the Democrats are just a bit less brazen about it. (I'm too lazy to look up the numbers right now, but I'm sure you know Obama got a LOT of help from Wall Street to get elected.)

saying that the financial sector has been de-regulated. This is absurd

The repeal of Glass-Steagal was a pretty huge step in that direction. (And it was signed into law by Clinton, another "friend" of Wall Street.)

The only hope I see of changing things is a constitutional amendment to overturn Citizens United and get some "regulation" of money in politics. As long as corporate "big money" keeps running the show, politicians will have little if any incentive to serve The People.

The two most prominent efforts to enact such an amendment (that I know of) are MoveToAmend.org and Wolf-PAC.com.

MoveToAmend is a petition drive and lobbying group pushing for Congress to pass an amendment at the federal level. They also get local governments to pass resolutions calling for such an amendment. Wolf-PAC is a more grass-roots/guerrilla effort. Their philosophy is to bypass the federal government altogether (on the theory that the current "corporate owned" Congress will never pass such an amendment) and lobby the states to call for an Article V convention on this specific issue.

Re:Reality Intrudes

[Anonymous Coward]

"constitutional amendment to overturn Citizens United and get some "regulation" of money in politics"

Really? That's your plan? Come on man have a little more sense than that will you?

You think any petty rules and pieces of paper is going to change the system when we had a whole Constitution to back us for so long and look what happened... you are a fool. As it stands now the statist ignores the Constitution and the "rules" at whim and why? Because no one has the balls to call them on it because why? The country is filled with sheeple who barely even understand such things and care even less. All that matters is who won best picture and who is going to be shamed on Americal Idle. This country is being led by the nose by the elites and mob rule has all but won the day. You will not be getting any such constitutional amendment so why waste your time? Hell, even if you did it would make exactly zer difference anyway.

Oh and yea, Citizens United is hardly the problem, do you honestly think this is the reason money has such an impact on power in DC?

Really?

I mean look at the post that started this thread off to begin with, complete and total bullshit and idiocy and this is what lots and lots of people truly believe. No wonder Obama got elected twice. We are fucked, that's all there is to it.

Re:Reality Intrudes

[tompaulco]

A lot easier to rob too, just grab the one server with the bit coin data on it and walk out the door, far easier than hanging out and breaking into a big heavy safe.

Except, of course, that any institution with any brains would have multiple copies of that data and it would be encrypted. So stealing it would do no good for the thief as they can't use it, and stealing it would do no harm to the company because they have another copy.

Re:Reality Intrudes

[tompaulco]

(Note: one of the differences between the scientific method and other belief systems is that new results are often are used as evidence to alter the belief, i.e. hypothesis, so the belief system expands.)

As far as I have seen, both the scientific method and other belief systems both do that, although most religions are much more slow to accept change than science. But science is getting more and more set in its ways as well, these days.

Re:Reality Intrudes

[taiwanjohn]

We are fucked, that's all there is to it.

LOL, cynical much? ;-)

First, if not an amendment, what would you suggest as a solution?

You think any petty rules and pieces of paper is going to change the system when we had a whole Constitution to back us for so long and look what happened

We do still have a "civil society" governed by laws, though how long that will last is anybody's guess. Such things matter. I never said that the amendment was sufficient to fix the problem, just that it's the only hope we have of restoring some semblance of democracy. And this is true. As long as corporations have the same rights as people, the people are screwed. Therefore such an amendment is a necessary step on the path forward. It is far from sufficient, but it's an important milestone to strive for.

Citizens United is hardly the problem, do you honestly think this is the reason money has such an impact on power in DC?

Of course not. This problem goes back waaayyyy farther than that... at least as far as 1886. Corporate lawyers have been chipping away at this "personhood" thing ever since, gradually accumulating more and more "rights" as artificial "persons" under the constitution. Citizens United was just the most recent chip to fall.

Though it may surprise you, I do not put a lot of faith in "government regulation" to rein in corporate overreach. Sorta like the internet "routes around" censorship, corporations tend to find ways... but at least an amendment would (sorta) level the playing field and allow The People at least the chance to take back some control. There would still be a lot of work to do after that, but at least there'd be a chance. Absent such an amendment, we don't have any such chance.

In the meantime, here's an idea that's a little more accessible and easier to implement at the local scale: Worker Self-Directed Enterprises along the lines of the famous Mondragon Co-Op system in Spain's Basque region. This is described in some detail by Richard Wolff in many of his lectures.

This is not a "total solution" either, but at least it's something that can be done (or at least begun) right now, by The People, without any permission or cooperation from the oligarchy.

Re:Reality Intrudes

[Anonymous Coward]

"LOL, cynical much"

Yep.

"just that it's the only hope we have of restoring some semblance of democracy"

Restoring? Dude, the problem now is that we have been ruled by the mob of democracy for too long. We aren't supposed to be a democracy for a reason. And yet now we have the 52% voting for their Obamaphones and their free shit at the expense of those of us who still have jobs. That *cannot* continue without end, and when it does end it may not be pretty.

Stop blaming 'corporations', start blaming voters.

Corporations spending money to support politicians is bad? You think that is ever going to stop? Don't be a fool. You understand that people will support politicians in any way they can, and people with more money will provide politicians with more support that those with less, right? You cannot change that, it's imnpossible. I would also argue that corporations, as groups of people also have a right to do this, but that's neither here nor there. It's just a fact, like water is wet, things fall down, shit stinks. It is and you cannot change it. Move on with your life.

Look for the rule of law, that is what will have an impact. Why is Louis Lerner allowed to invoke the fifth? That is not lawful. Why is Obama allowed to make appointments when congress is not on recess? That is not lawful. What is so bad about asking that all of us in our society abide by the law equally? We don't lack "comprehensive immigration reform", we lack in a government that enforces the rule of law equally and justly.

Why do you allow the state to force a healthcare system on you that they refuse to succomb to themselves? Aren't you the slightest bit pissed off about that?

Dude. 'Richard Wolff talks about "The Shape of a Post-Capitalist Future,"'. Are you serious?

Here's what I would ask you; why do you hate corporations so much? You understand that corporations are just groups of people right? Why is this a bad thing? If you do not have groups of people organizing together, what do you expect them to do?

Re:Reality Intrudes

[Anonymous Coward]

It's a bit disingenuous to blame Clinton for the Gramm–Leach–Bliley Act (which repealed parts of Glass-Steagall) since it passed with a veto proof supermajority in both houses.

Re:Reality Intrudes

[Anonymous Coward]

"since it passed with a veto proof supermajority in both houses"

So what? Clinton signed it, fact. It was not overridden fact. Do you have some problem with facts?

If there is some problem there that you seem to think was presented by Republicans, why didn't Dodd-Frank address it then?

Indeed, if there is some Republican created problem, why not ask the light-bringer to just use his phone and pen to address it with XO in true Democratic form?

The truth is, as always in politics, murkier.

Taiwanjohn does correctly observe, although I think he attributes the reason somewhat inaccurately, but he is nevertheless essentially correct when he says both parties are more or less the same.

When you see the Democrats and Republicans as two arms of an organization working to the same end, things make become a lot clearer. They provide cover for each other.

Re:Reality Intrudes

[taiwanjohn]

the problem now is that we have been ruled by the mob of democracy for too long

Bullcrap. When was the last time the "mob" actually prevailed over the corporate oligarchs? (I'll grant you some citizens referenda on pot legalization, etc., but other than that it's been straight down the line... what's good for Big (Corporate) Brother is what's best for America).

Stop blaming 'corporations', start blaming voters.

Oh, I still have plenty of blame for the voters who keep electing these clowns, but at least they are actually human and therefore I hold out some hope for their improvement. But corporations are not people, my friend.

Nor are they merely "groups of people" as you contend. They are more like programs or automatons... whose only "soul" is their so-called "fiduciary responsibility" to maximize profits for their shareholders (who, by the way, are mostly other corporations and not The People). Perhaps that's why there's a higher proportion of psychopaths among corporate CEOs than the general population...??

allow the state to force a healthcare system on you that they refuse to succomb to themselves?

Although I'm a tax-paying, regular-voting "citizen" of Iowa, I have been "residing" in Taiwan for a long time. Thus, I enjoy the benefits of an awesome single-payer, mixed-implementation healthcare system. As a business owner, I pay about $50/mo for my personal insurance, and pay about $20~25/mo per employee. It's not a perfect system by any stretch, but it beats the SHIT out of the USA, where even 20 years ago, as a healthy 30-year-old, I was paying over $200/mo for a lower grade of coverage.

Do I think the current "Obama-Care" compromise sucks? Yes, definitely. I would MUCH rather have gone with a single-payer system such as Medicare Buy-In, but alas, our "hope & change" president didn't have the stones for that fight.

Dude. 'Richard Wolff talks about "The Shape of a Post-Capitalist Future,"'. Are you serious?

Completely. I don't agree with everything he says, but I think capitalism has "run its course" and it's time to find a better paradigm, because CLEARLY (based on the last few years) this system has started to show its weaknesses. I think it goes without saying that "we can do better" than this, and I think Mr. Wolff has some useful ideas toward this end.

Re:Reality Intrudes

[Anonymous Coward]

A decent critique.

I'll concede that the natural market equilibrium is not necessarily "optimal", but this same argument will apply to market + some set of regulations.

Also, if such a system falls "out of equilibrium" and would require external force to return to that point, there is no evidence to suggest that this old equilibrium is better than wherever the system is heading.
.

Re:Reality Intrudes

[Solandri]

However there's no reason to suppose that any given equilibrium arising from any given set of constraints and feedbacks will be optimal for whatever outcome you're looking for, be it quality of life, GDP per capita, or whatever. The "laissez faire capitalism is implied by self-organisation" argument tends to assume without evidence that the best equilibrium is the one you fall into with the set of feedbacks and constraints that the proponent's flavour of laissez faire capitalism favours. However it's important to remember that there's no reason to assume that the equilibrium produced by the current set of rules is optimal, either.

That's actually one of the strengths of laissez faire capitalism. It aggressively seeks out to find new equilibria, increasing the chances you'll find one that's more optimal for the outcome you're looking for. Overregulated and completely managed economies are limited by the imagination and biases of the regulators, and tend to fall behind technologically and economically after a few decades for this reason.

The reality is that there is no one single best formula. In one case a certain blend of business operations work best. In another case, a different blend works best. While regulation definitely has a place in warding us away from known pitfalls, too much regulation can stifle exploration and experimentation with different blends, potentially cutting off access to a new equilibrium which could better achieve the very outcomes the regulators think they're promoting by prohibiting that experimentation. (And this is before we even try to get into deciding what singular set of outcomes best defines what we as a society want to achieve - something those who believe man is a free-willed spirit and not a cog in a machine would find abhorrent.)

Re:Reality Intrudes

[Sockatume]

Bingo, you got it.

Re:Reality Intrudes

[Rich0]

A lot easier to rob too, just grab the one server with the bit coin data on it and walk out the door, far easier than hanging out and breaking into a big heavy safe.

Except, of course, that any institution with any brains would have multiple copies of that data and it would be encrypted. So stealing it would do no good for the thief as they can't use it, and stealing it would do no harm to the company because they have another copy.

Yup. Nothing prevents the local bank from keeping all their cash stacked on a pallet in the lobby behind non-bulletproof glass after-hours. They're just not stupid.

I merely said that running your own bank based on bitcoin is much more practical than doing the same with cash. Given the problem of securing a few files against loss or theft and the problem of securing a stack of cash against loss or theft I'll take the former anytime.

That will go well!

[Anonymous Coward]

Transcript of a typical call:

Caller:WHE'AS MA FUCKIN MUNNAY?!
Handler:Sir, please calm down and speak a little clearer, we are here to help you.
Caller:Okay, okay, where... is.. ma... fuckin... moneee?
Handler begins to cry.
Call was terminated.

They will need to open a support centre for the people answering the phones eventually.

Re:That will go well!

[Opportunist]

And now you know why the banks didn't install something like that when our money went poof.

Re:That will go well!

[Hognoxious]

The ones in Iceland did.

Re:That will go well!

[Opportunist]

Which in turn explains why Iceland already managed to recover from its recession.

Re:That will go well!

[Hognoxious]

Unfortunately the method of stealing other people's money isn't universally applicable.

We should have invaded the fuckers back in the 70s when they tried to steal all our fish.

Re:That will go well!

[Opportunist]

But the method of stealing everyone's money by blackmailing countries to foot the bill is universally applicable?

That's not even what bothers me most. What really ticks me off is that nothing changed. All we did was send the message "please continue using our money in high risk ventures. If you succeed, you get to keep the profits, but if you fail, don't worry, we'll bail you out and let you continue".

Personally I'd grab those responsible by the ankles and shake them, and if that doesn't suffice, harvest their organs. Fuck, I want my money back from those sponges!

Re:The General consensus is that it was pure fraud

[jythie]

Yeah, but so far it is just group think and says a lot about the community`s self perception.

Another possible ending to that call

[DaveV1.0]

Handler: You didn't have any money with us, sir.
Caller: What?!?!? I had 100 BitCoins with you!!!! I am going to sue you!
Handler:: You just had some bytes with us, sir. Do you remember when you posted that copying music against copyright shouldn't be a crime because it was just bytes and nothing tangible and had little, if any, value? We will gladly compensate you for the value of the bytes you lost, the bytes that you have publicly stated have little if any value. See you in court
Caller:Gahhhhhhhh!!!!!!

Re:The General consensus is that it was pure fraud

[squiggleslash]

Good link, and well written analysis by the author. Thank you for drawing our attention to it.

Must admit I've been surprised to the extent to which the "Immediate reasons why Mt. Gox collapsed" speculation has gone beyond "What Mt. Gox themselves claimed" (transaction malleability/hackers) and "Fraud". It would seem to me there's no reason whatsoever to look at any other reasons. The "Obama closed them down" thing in particular just seems to confirm the views I have about how Bitcoin advocates/users think.

Re:The General consensus is that it was pure fraud

[Opportunist]

And the difference to the stock market would be...?

Rational

[DrYak]

they wouldnt be touching Bitcoins.

or at least, they won't be risking more money than they can afford to lose.
I mean bitcoin is a fun new technology to start experimenting with. And so it might be interesting for some to risk a bit in order to play with it.

But just don't act like those idiots ready to throw tons of money everywhere just on the vague promise that this one scam could help them make bazillions-USD-worth of BTCs.

What is 'and it's gone' in Japanese?

[Anonymous Coward]

Call this hotline to find out!

Re:What is 'and it's gone' in Japanese?

[mrvan]

Sumimasen! O-kyaku-sama no bitokoinu-wa kietta arimasu! Moushiwake arimasen!

Why not use own wallet?

[Anonymous Coward]

Why did people lose their bitcoins? Surely any sensible person would keep their coins in their own wallet. The nature of bitcoins is that it is a distributed currency, so the only reason for bitcoins to leave your wallet is when you are making a payment. So the only potential for loss when an exchange stops trading should be those who have initiated the transaction to convert bitcoins into fiat currency but have not received it.

Re:Why not use own wallet?

[petermgreen]

Why did people lose their bitcoins? Surely any sensible person would keep their coins in their own wallet.

I can think of a couple of reasons why people would keep their bitcoins in the exchange.

1: they were lazy/ignorant of the risks of storing money (whether bitcoins or dollars) in such organisations.
2: they wanted to be able to execute trades quickly, moving bitcoins into the exchange takes time which may mean that by the time you get them into the exchange the opportunity they were trying to trade on is no longer there.

Re:Why not use own wallet?

[tompaulco]

Why did people lose their bitcoins? Surely any sensible person would keep their coins in their own wallet. The nature of bitcoins is that it is a distributed currency, so the only reason for bitcoins to leave your wallet is when you are making a payment. So the only potential for loss when an exchange stops trading should be those who have initiated the transaction to convert bitcoins into fiat currency but have not received it.

People had bitcoins on MTGox because they were buying and selling them in an attempt to outguess the market. Once upon a time, people had their bitcoins on MTGox only for a short time in order to convert them to a currency and withdraw or to put currency in and exchange it to bitcoin, but at some point, MTGox started to suck at being able to distribute out currencies, so there was no point for the site at all other than speculation.

Re:Why not use own wallet?

[Anonymous Coward]

Same reason people put money into banks instead of keeping huge piles of cash in their homes, even when interest rates are low:
Securing your own system reliably takes knowledge and effort. MtGox was a big exchange, so people assumed them to have somewhat resonable security, at least better than what most individuals would ahve on their own system.

"Bitcoiner"?

[Anonymous Coward]

Is someone who buys dollars a dollarer, or how about a Euroer, or a yener?

Really??

Re:"Bitcoiner"?

[Anonymous Coward]

I thought "bitcoiner" was the actual fool behind the wheel, not the car he is crashing. so a Yener would be a person using (or producing) Yen.

Re:"Bitcoiner"?

[Anonymous Coward]

I like to think of myself as a Dollarist.

Re:"Bitcoiner"?

[Hognoxious]

Well in that case I'm a pounder. // yo mama joke in 5, 4, 3 2, 1...

Call center script...

[msauve]

"Yes, we have no bananas."

Hire refugees from AT&T

[PopeRatzo]

They've already got the script:

"First, let me say that I'm sorry that you're having a problem with your Bitcoin service today..."

Re:Regulation of currency - 2 issues

[meander]

1) bitcoin value goes up and down, so does everything else. Live with it or dont use it.

2) Storing your bitcoins on a server owned by someone else is like giving your cash to someone you dont know. Maybe it will still be there, maybe it wont. If you are on Linux, or Windows or OSX, use a client like electrum (electrum.org). You can store the bitcoin wallet on your own computer, without relying on some not so trusted intermediary. You do do backups dont you?

Yesterday I transferred most of my bitcoin stash (~$500 Aussie) into my own wallet on my own computer, and backed it up elsewhere.

The bitcoin is now safe, the value of it may change up and down. Bit like owning shares, isn't it?

Pay-number

[deroby]

I do wonder what they charge per minute .. might a a lucrative way to squeeze even more money out of their 'clients' =)

Re:The General consensus is that it was pure fraud

[DarkOx]

The problem is of course the flip side where folks like you will endless apologize for big government and the status quo.

We have seen lots of governments respond in ways that are hostile to Bitcoin, we have seen several of our legislators tirade about it. We have watched as the proof our Security Agencies have repeatedly over stepped and target Americans, and foreign business; they have a long established history of currency manipulation in South America in particular but really around the world.

In what way isn't the hypothesis our government or at least certain parts of it actively sought to destroy Bitcoin reasonable? The fact is nobody knows much of anything about what went on at Mt. Gox; except maybe its operators and I suspect even they don't really know what happened because had they been doing any sort of half way correct book keeping they should have caught the thefts a long time ago. So my bet is even they don't know the details of what happened or they were in on it.

Re:The General consensus is that it was pure fraud

[DarkOx]

s/reasonable/unreasonable

Well, now.

[Anonymous Coward]

So, poetry, art and the humanities do have some value, I guess; well just to an individual.

Business on the other hand, just wants soulless engineers who think literally.

Stupid question

[BlackPignouf]

I don't know much about Bitcoin, and it's probably a stupid question, but where did the BTCs go?
Isn't it possible to trace it, and prove that you owned them?

Re:Stupid question

[Anonymous Coward]

Sort of, kind of, but knowing that what used to be your bitcoins are now at address X (or even knowing that address X belongs to person Y) does not give you any control over them. The moment you sent your bitcoins to MtGox you lost all control over them. Its not possible to get them back unless MtGox gives them back(haa-ha yeah right, when hell freezes over). "No chargebacks" is one of the basic tenants of bitcoin architecture.

Re:The General consensus is that it was pure fraud

[Anonymous Coward]

And the relevance of that comment would be...? Why do bitrcoiners always compare themself to the monetary market when they are nothing more than expensive collectors items?

Re:The General consensus is that it was pure fraud

[Anonymous Coward]

1%er 1st world problems. normal people simply need to make ends meet, they cant be spending their time invesitgating volatile markets to see small not-even-percentage gains on their meager savings. Bitcon people seems to be wanna-be stock-market winners and we all know how honest and trustworthy they are.

Re:The General consensus is that it was pure fraud

[Anonymous Coward]

You missed out criminal negligence, which is by far the most likely explanation. It is mathematically impossible for transaction malleability to explain the loss of so many bitcoins, so I suppose at the very least the ensuing cover-up could be classed as fraud. I doubt Karpeles still has the coins though. He'd be long gone if he did.

This is the second, not first MtGox incident

[xtal]

I had.. a few Bitcoins a very long time ago.

I stopped being interested the first time the exchange went screwy and f--ked over people. I think it was a database hack of some type or DDOS.

It's unregulated, and the problem is you need a exchange to turn Bitcoins into Cash, and Cash into Bitcoins. That means somewhere you have to trust someone.

Call me when a nation state is backing a cryptocurrency. That will change everything. Until then it is a crap shoot.

Re:This is the second, not first MtGox incident

[Anonymous Coward]

There is localbitcoins that allows you to exchange face to face. If you are asked to meet at a dark alley that is probably a bad indicator tho....

Re:The General consensus is that it was pure fraud

[BitZtream]

So your problem is that people (and the government) are talking about BitCoin rather than just worshiping it like you do? I mean thats pretty much what you're saying.

I EXPECT the government to be discussing something like this. I EXPECT them to have opinions on both sides, thats GREAT, it means they are doing their fucking job for a change.

Just because they have vocal opinions, doesn't make them wrong any more than it magically makes them right.

Then you just go off into government conspiracy land blah blah blah whatever

Copycat scam

[Anonymous Coward]

Mt. Gox would have to be almost impossibly incompetent to lose all their coins to TXID malleability. One possible theory is that they are using the Mybitcoin scam. Claim all the coins are gone then miraculously say that users will be able to get some of their coins back while keeping the majority and saying hackers got them. More likely they lost a bunch of coins and were running on fractional reserve. They used customer money to buy coins and used their power to control the price to try and crash the price to buy enough cheap coins to cover their ass. I don't see any possible explanation that doesn't involve massive fraud or outright theft by Gox. This has hurt a lot of users but the math behind Bitcoin is still the same. Cleaning out the bad actors is just the next step in bitcoin's evolution.

A call to the call center

[Esteanil]

Here's how I see it going:
"Are all my bitcoins gone?"
-"Yes."
-"Oh..."
-"Have a good day"
*click*

Re:A call to the call center

[Anonymous Coward]

Yep. It's another delaying tactic while the crooks behind the scenes make off with their stolen cash. Anyone with half a brain and one eye open would know this is happening.

Re:A call to the call center

[Anonymous Coward]

I am on of the people who 'got goxed' and I strongly agree with Daniel Negreanu's idea in this video: http://www.youtube.com/watch?v=_KGujM316-U
Bashing Mark Karpeles in the nuts with a baseball bat!

Re:A call to the call center

[Anonymous Coward]

Maybe like this: "If you deposit another 10 bitcoins we can look into where your coins went." -or- "HOONNNNNKKK" This is your Captain speaking, and you've won two free tickets! Just deposit 5 bitcoins to claim your prize.

Re:A call to the call center

[houstonbofh]

No personal responsibility or anything... It is not like you trusted your money to an unregulated foreign business with well known and unpatched security issues. I am sorry for your loss, but it is not just one person's fault.

Re: A call to the call center

[Anonymous Coward]

All the money and Bitcoins are long gone. I'm not sure what the purpose of the call center is, but it's not to help the MtGox crooks/morons get out of town.

Re:A call to the call center

[Anonymous Coward]

Daniel is a professional Gambler, He can afford to lose a chunk of change. investing in bitcoin is a gamble, yes you can be upset you lost your wad, but being surprised is just silly. Many more people will go down the shitter in the coming 12 months, if you think Gox is the only one screwing people over then you are in for a rude shock.

Re:A call to the call center

[MRe_nl]

Mt Gox call-center
Are all my bit-coins gone sir?
That is a bingo.

Re:A call to the call center

[CodeArtisan]

I am on of the people who 'got goxed' and I strongly agree with Daniel Negreanu's idea in this video: http://www.youtube.com/watch?v... Bashing Mark Karpeles in the nuts with a baseball bat!

This is the same Daniel Negreaneau who thinks it's fine that his good buddy Erik Lindgren stiffs people on his gambling debts because he is an "old school" poker player.

We are having trouble transferring your funds

[Anonymous Coward]

You only need to send us a small amount to cover the cost of us transferring you your bitcoins....

MtGox is proved to be a scam, massive one at that, if you lost bitcoins there, tough luck, be smarter next time. Do NOT give them more bitcoins, under any circumstances, no matter what they promise you. What you had at MtGox is gone, forever, you are not seeing these bitcoins ever again. Throwing more at the black hole does not solve the problem. Cut your losses.

Lets call FBI

[Anonymous Coward]

Don't you have to speak Japanese to be able to talk someone ? I always wonder what all this computer power is being used for. People mining bitcoins could be adding NSA or other federal agency. The draw to the currency is that is not regulated,but is tractable. Everyone remembers stories about scientist tracing silk road transactions. Why doesn't the exchange hires those scientist to trace were bitcoins went.

Re:The General consensus is that it was pure fraud

[squiggleslash]

If your aim was to portray Bitcoin advocates as a bunch of out of touch extremists who argue only against strawmen, you couldn't have done a better job. I "apologize [endlessly] for big government and the status quo" huh? And despite no signs it's relevent, you're refusing to accept either that Mt. Gox is telling the truth, or that it's engaged in fraud, and instead prefering to believe that a foreign government is involved?

This is a large part of why I don't take Bitcoin particularly seriously. Between wild swings of value, a deflationary end point (and a deliberately failure to link money supply and money demand), the eye-swivling tirades against any government action, good or bad, simply because governments do bad things on occasion (therefore all government is bad? You should see corporate behavior! We should immediately switch to an anarcho-trotskyite economy right now!) by Bitcoin's staunchest defenders, and the refusal of Bitcoin's largest defenders to even see problems that need fixing, let alone actually attempt to fix them, the entire concept is essentially a wash. It's not even useful: the only real application people have suggested it could be good at is as a transaction system, and the free market's found plenty of ways that are infinitely more user-friendly to do that already.

Re:The General consensus is that it was pure fraud

[squiggleslash]

I'm not sure it's the most likely explanation, but yes, it's kinda a good one. The issue with it though is that it relies upon Mt. Gox making one of the mistakes the author of the linked article addressed and debunked as seriously unlikely. Which is why it's more likely that Mt. Gox are either telling the truth, or serious fraud occurred.

Me Japanese, Me Make Joke

[JoeyRox]

Me make your bitcoins go up in smoke.

Re:The General consensus is that it was pure fraud

[Opportunist]

Both are markets where buying and selling, and the price at which it happens, is dictated by the hopes, dreams and expectations of the participants rather than business facts.

Re:Regulation of currency - 2 issues

[Anonymous Coward]

1) bitcoin value goes up and down, so does everything else. Live with it or dont use it.

Some things aren't supposed to go up and down. For example, currencies. When they go rapidly up or down, that's a serious bug.

If you would prefer to agree that bitcoin isn't really a currency, but rather a speculative investment and tool for money launderers, then that's fine, but be aware that if everyone starts thinking of it that way, your bitcoin stash will drop to about $5 AUS.

And here's the call centre script

[Minwee]

Lister: Where are everyone's Bitcoins Hol?
Holly: They're gone Dave.
Lister: Whose are?
Holly: Everybody's Dave.
Lister: What Captain Holister's?
Holly: Everybody's Bitcoins are gone Dave.
Lister: What Todd Hunter's?
Holly: Everybody's Bitcoins are gone Dave.
Lister: What Selby's?
Holly: They're all gone, everybody's Bitcoins are gone Dave.
Lister: Peterson's aren't, are they?
Holly: Everybody's Bitcoins are gone Dave.
Lister: Not Chen's?
Holly: Gorden Bennet, yes Chen's, everybody's. Everybody's Bitcoins are gone Dave.
Lister: Rimmer's?
Holly: They're gone Dave, everybody's Bitcoins are gone, everybody's Bitcoins are gone Dave.
Lister: Wait, are you trying to tell me everybody's Bitcoins are gone?

Re:The General consensus is that it was pure fraud

[H0p313ss]

In what way isn't the hypothesis our government or at least certain parts of it actively sought to destroy Bitcoin reasonable?

How about a complete lack of evidence?

But I'm sure that's going to be as successful an argument with the Bitards as it is with anyone who believes in things without evidence.

Let me guess

[slapout]

Press 1 for Japanese
Press 2 for Spanish
Press 3 for English

Cool economic theory, bro!

[Anonymous Coward]

Good god I'm glad I don't have to argue with you people anymore. I suggest you put your money where your mouth is, and short BTC today!

Re: Regulation of currency - 2 issues

[Anonymous Coward]

or a tool for people that dont want fucking fees?

I doubt it!

[slashmydots]

"to help allay your fears"
They own half the bitcoins they owe and are filing for bankruptcy. Considering that I can do 1st grade math, what could they possibly say that would allay my fears?
P.S. I don't actually have a balance at MTGox and haven't for many months :-P

Re:Regulation of currency - 2 issues

[Anonymous Coward]

The bitcoin is now safe, the value of it may change up and down. Bit like owning shares, isn't it?

Is IS a lot like owning shares in a volatile company, except nobody blogs about trading those for goods or how they make great investments.

Re:Regulation of currency - 2 issues

[Anonymous Coward]

1) bitcoin value goes up and down, so does everything else. Live with it or dont use it.

The problem here is that unless this (and many other problems with BTC) are fixed, we choose not to use it.

You guys do want to trade with other people, right?

We don't need no stinkin' call center!

[jtara]

Why do they need a call center?

They just need a recorded message, and to hire DeForest Kelly to record a one-liner:

        "It's dead, Jim!"

Re:We don't need no stinkin' call center!

[freakmn]

Why do they need a call center?

They just need a recorded message, and to hire DeForest Kelly to record a one-liner:

"It's dead, Jim!"

Good luck with that. He's dead, jtara!

Re:We don't need no stinkin' call center!

[avandesande]

I know you are posting this for fun- but my guess it is something legally they have to do as part of their bankruptcy plan.

Re:The General consensus is that it was pure fraud

[viperidaenz]

But stock markets are regulated.
The FBI sent Leonardo DeCaprio to jail.

--
Why does Firefox spell check tell me DeCaprio is spelt Decapitator?

Re: Another possible ending to that call (5, Not s

[Anonymous Coward]

>it was just bytes and nothing tangible and had little, if any, value?

The computation behind copying a music file is obscenely miniscule, the computation to mine a bitcoin is tremendous, which is what helps gives it value.

Re:Regulation of currency - 2 issues

[johnwallace123]

1) bitcoin value goes up and down, so does everything else. Live with it or dont use it.

Not everything goes up and down at the rate of bitcoin. Over the past year, the exchange rate of a bitcoin has ranged from $36 to $1151. If we consider BTC the "currency" and a single USD the "commodities basket", that gives us a deflation rate of 96%! Even if you look at today's exchange rate of ~$650, it still gives us a deflation rate of 94.5%. Never in the history of the United States has deflation gone higher than 20%. Deflation is generally considered a very bad thing in economics, and it usually coincides with a major recession.

2) Storing your bitcoins on a server owned by someone else is like giving your cash to someone you dont know. Maybe it will still be there, maybe it wont.

I just gave my entire pay check to someone I don't know! I don't know the teller at my local bank! HOLY CRAP! I should run over there to make sure that my money is still there!!! Oh, right, that's what this whole FDIC thing is meant to prevent; I like the regulation of my bank. It means that I don't have to hoard my cash and hire an armed guard to protect it while I work.

As many have stated, BTC is an investment, and a speculative one at that. A currency, it is not.

Re: Another possible ending to that call (5, Not s

[Anonymous Coward]

The computation behind finding a good place to fart in public is also tremendous but it doesn't make the act valuable.

Re:Regulation of currency - 2 issues

[Trogre]

But then it wouldn't be in the Cloud, so it's immediately uncool! Because Cloud!

Cloud.

Re: Regulation of currency - 2 issues

[Anonymous Coward]

I will take a 1 or 2% transaction fee over a 50% daily fluctuation in value thanks!

Re: Another possible ending to that call (5, Not s

[Anonymous Coward]

that all depends on when the bitcoin was mined. Are you saying each bitcoin has differing values? The computation behind a bitcoin from 2 years ago is only a small fraction of one from today.

Re:Regulation of currency - 2 issues

[DanielRavenNest]

2) Storing your bitcoins on a server owned by someone else is like giving your cash to someone you dont know.

My analogy is "Bitcoin exchanges are like having sex with an alligator. You want to withdraw as soon as you are finished, or else you might get bitten."

Re:Regulation of currency - 2 issues

[Trogre]

If you would prefer to agree that bitcoin isn't really a currency, but rather a speculative investment and tool for money launderers, then that's fine...

Well, more of a scam run by coal and other energy companies who have managed to con people out of trillions of CPU/GPU/FPGA/ASIC cycles.