3rd largest Bitcoin exchange lost its wallet.dat • Hacker News Board

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#31

Post by jonknee » Sun, Jul 31, 2011, 5:34 PM UTC

bcl wrote: post #27

jonknee wrote: post #16

Sometimes you don't appreciate regulation until it's gone.

I disagree. Regulation has given people a false sense of security, leading to them trusting these unknown and untested entities. Instead of regulation what they need is more transparency. Tell your customers who you are, how you are building your service, what you will do in the case of a disaster. In this particular case you have someone who is playing with the technology without having even a basic understanding of…

What's to prevent a firm from lying about who they are and what they are doing? Without regulations (and accompanying penalties for breaking the rules), it's the wild West. It sounds good on a libertarian check list, but in practice the people who can least afford it get absolutely destroyed.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#32

Post by kiba » Sun, Jul 31, 2011, 5:34 PM UTC

aw3c2 wrote: post #22

kiba wrote: post #13

Earlier quoted context omitted.

Find a way to easily trade bitcoin without centralizing wallets and you got the thousand bitcoin idea. Next step is to turn the thousand bitcoin idea into an actual reality and get rich.

I thought one can directly send bitcoin to another address without the need for a middleman?

Yes, but dollars and euro and yens almost always require a middleman, unless you're doing cash exchange.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#33

Post by kiba » Sun, Jul 31, 2011, 5:38 PM UTC

jonknee wrote: post #31

bcl wrote: post #27

Earlier quoted context omitted.

I disagree. Regulation has given people a false sense of security, leading to them trusting these unknown and untested entities. Instead of regulation what they need is more transparency. Tell your customers who you are, how you are building your service, what you will do in the case of a disaster. In this particular case you have someone who is playing with the technology without having even a basic understanding of…

What's to prevent a firm from lying about who they are and what they are doing? Without regulations (and accompanying penalties for breaking the rules), it's the wild West. It sounds good on a libertarian check list, but in practice the people who can least afford it get absolutely destroyed.

Bankruptcy.

Plus, backup is just a good policy. Practice it lest you end up homeless or have to find another job.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#34

Post by olex » Sun, Jul 31, 2011, 5:38 PM UTC

aw3c2 wrote: post #22

kiba wrote: post #13

Earlier quoted context omitted.

Find a way to easily trade bitcoin without centralizing wallets and you got the thousand bitcoin idea. Next step is to turn the thousand bitcoin idea into an actual reality and get rich.

I thought one can directly send bitcoin to another address without the need for a middleman?

Of course one can. But what he's talking about are large-scale exchanges, where one makes transactions with funds deposited directly on the exchange.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#35

Post by jonknee » Sun, Jul 31, 2011, 5:38 PM UTC

kiba wrote: post #30

jonknee wrote: post #23

Earlier quoted context omitted.

Except with a lost wallet.dat there will be a lot of BTC that cannot be given back. Customers are likely going to take a haircut because an incompetent exchange lost their money. In the real world the people running the exchange would be going to jail.

I don't understand the point you are trying to make. Incompetent exchange goes out of business. Said exchange try to compensate their customers. Customers learn better to scrutinize other exchanges for their backup policies and how they run their business. Of course, this is the free market. Failure to be competent, either as an investor, user, or exchange, result in monetary loss. To others, this is horrible. To me,…

That there's not a regulated option... To use BitCoins you have to go into the underbelly where you're quite likely to be stolen from and have no recourse. While it's great you enjoy the ability to be mercilessly preyed upon, it's not great that there is no safe option.

This one was just (apparently) incompetence. Wait until the real crooks get going.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#36

Post by jonknee » Sun, Jul 31, 2011, 5:39 PM UTC

kiba wrote: post #33

jonknee wrote: post #31

Earlier quoted context omitted.

What's to prevent a firm from lying about who they are and what they are doing? Without regulations (and accompanying penalties for breaking the rules), it's the wild West. It sounds good on a libertarian check list, but in practice the people who can least afford it get absolutely destroyed.

Bankruptcy. Plus, backup is just a good policy. Practice it lest you end up homeless or have to find another job.

It's hard to go bankrupt when you steal for a living.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#37

Post by aw3c2 » Sun, Jul 31, 2011, 5:43 PM UTC

kiba wrote: post #32

aw3c2 wrote: post #22

Earlier quoted context omitted.

I thought one can directly send bitcoin to another address without the need for a middleman?

Yes, but dollars and euro and yens almost always require a middleman, unless you're doing cash exchange.

Ah, I did not realise that this was about a "transformation" between bitcoin and normal money. But in that case wouldn't it make sense to keep the money on the exchange just as long as needed?

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#38

Post by waterlesscloud » Sun, Jul 31, 2011, 5:44 PM UTC

jonknee wrote: post #23

kiba wrote: post #18

Earlier quoted context omitted.

An exchange failed on its incompetency and now they are trying to liquidate and giving back their customers' money. The market works even if the consequence is quite sour and painful. This will means that exchanges will tend toward competency rather than incompetency. Regulations is something that you will have to design first or else you get regulatory capture or "TOO BIG TO FAIL" or some kind of unjust monopoly. Ad…

Except with a lost wallet.dat there will be a lot of BTC that cannot be given back. Customers are likely going to take a haircut because an incompetent exchange lost their money. In the real world the people running the exchange would be going to jail.

Where do you live that incompetent people who run banks go to jail?

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#39

Post by indrax » Sun, Jul 31, 2011, 5:53 PM UTC

kiba wrote: post #30

jonknee wrote: post #23

Earlier quoted context omitted.

Except with a lost wallet.dat there will be a lot of BTC that cannot be given back. Customers are likely going to take a haircut because an incompetent exchange lost their money. In the real world the people running the exchange would be going to jail.

I don't understand the point you are trying to make. Incompetent exchange goes out of business. Said exchange try to compensate their customers. Customers learn better to scrutinize other exchanges for their backup policies and how they run their business. Of course, this is the free market. Failure to be competent, either as an investor, user, or exchange, result in monetary loss. To others, this is horrible. To me,…

This is an inefficiency of the market. You must have some level (perhaps not rigidly set) of inefficiency at which you would conclude that some type of government regulation would make the market more efficient.

Otherwise you'd accept any level of inefficiency as the market working, at which point it's just an ideological label.

Although it's not clear that regulation of bitcoin is even possible, we can still consider losses due to its absence.

Re: 3rd largest Bitcoin exchange lost its wallet.dat

#40

Post by scotty79 » Sun, Jul 31, 2011, 5:54 PM UTC

jonknee wrote: post #23

kiba wrote: post #18

Earlier quoted context omitted.

An exchange failed on its incompetency and now they are trying to liquidate and giving back their customers' money. The market works even if the consequence is quite sour and painful. This will means that exchanges will tend toward competency rather than incompetency. Regulations is something that you will have to design first or else you get regulatory capture or "TOO BIG TO FAIL" or some kind of unjust monopoly. Ad…

Except with a lost wallet.dat there will be a lot of BTC that cannot be given back. Customers are likely going to take a haircut because an incompetent exchange lost their money. In the real world the people running the exchange would be going to jail.

There is a movement among the users to exchange lost bitcoins into bitomat shares so the owner compensate for his errors with parts of his own company.