281–290 of 553 posts
Not to count the drug dealers, cryptolockers, etc. The banksters are bad, but this kind of stuff isn't good for wider adoption. "Hey, invest in bitcoin and watch how the deflation will boost your friendly local crime empire!"
I remember people getting angry whenever anyone pointed out that they were trusting a whole lot of their money to the Magic The Gathering Online Exchange.
And even now, that is not a valid criticism. There are many successful businesses who have started in fields only tangentially related to their final form. There will undoubtedly be many postmortems on what happened, but card trading will have very little impact on what happened.
http://blog.magicaltux.net/2010/06/27/php-can-do-anything-wh...
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> There is no fucking way 700,000 BTC disappears with nobody noticing. The history of Barings Bank is interesting, primarily because the main trader Nick Leeson was in the position to mask hundreds of millions of pounds of losses. In that case, no one noticed the roughly $1.3B loss because he was in a position where the internal controls didn't apply
At Barings, Leeson was trading futures contracts and he was also responsible for accounting for his own positions. There was no segregation of duties, no mark-to-market. At MtGox, it should be much simpler to (1) add up all customer balances, (2) add up all BTC in hot and cold wallets, and (3) compare those two numbers. If the numbers differ by more than timing differences, shut it down, debug it, and prevent a small…
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Yes, trusting a third party with your money, whether MtGox or the US Fed, is a bad idea.
There is no such thing as money without trust of third parties. Transacting under the auspices of a neutral, trusted third party is what money means. The Fed has the backing of a sovereign power with its own currency and is central to the largest national economy in the world, as well as a great deal of the international economy. If MtGox's earned trust was an apple, you could see the Fed's from space.
Can you explain this a little more? How do I need to trust a 3rd party when I use, say, gold as money?
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Well, sure. It would be pretty idiotic to suggest that every rule ever thought up was a good idea.
no but there's a pretty bad track record of currency collapse. Diocletian. Confederate States of America. Weimar. Yugoslavia. Argentina. Zimbabwe. Venezuela. Edit: Looking at my list, I should have listed one for every alphabet Letter, instead of going chronologically.
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Lots of people in the Bitcoin community have been saying for years to not touch MtGox with a ten foot pole.
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[0] http://www.reddit.com/r/Bitcoin/comments/1orvkc/do_not_use_m...
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Yeeaaahh regulated companies that handle vast amounts of money for their customers never get into any trouble.
If you're talking about banks, they're insured and if the bank fails you still get your money back though.
If MtGox were managing real money or stocks, and did what they are alleged to have done, I expect there would be some jail time. I doubt it's worth the Japanese government's time to criminally prosecute a few million dollars of new, unregulated currency-equivalent, but if they do prosecute, I'm guessing there is a serious risk of jail time here.
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There's Bitcoin laundering. https://en.bitcoin.it/wiki/Mixing_service
Interesting. Is it mathematically impossible to trace back to source (and intermediate nodes) or is it just harder?
Trivialized example: a friend and I split a single bitcoin each and send half to address A and half to address B, and we each control one address. Who owns A and who owns B? If A is used to buy something, am I the buyer or my friend? Since the private keys are generated offline, the fact that two sources sent to both A and B is all the information that exists. I've "tainted" both addresses, anyone can see that, but that's all.
But even when done correctly, odds are you still expose your identity through your use of the coins in the future. So you run through a random number of mixers, and then you behave extremely carefully, since there's some taint to everything and someone could be watching any of a billion addresses for signs of you (shipment to your house, for example). Given enough connections, you can get pretty reasonable probabilities and start forming deeper and more confident paths.