121–125 of 125 posts
Mark decided that he would do what he thought was right: he would slowly earn back the lost bitcoin with MtGox trading fee profits and eventually make his customers whole again. He still had over 500,000 BTC left—he moved 424242.42424242 BTC between bitcoin addresses and convinced the community that MtGox was solvent. So, bitcoin is actually a hybrid fiat+cryptocurrency? Since there is little transparency, a signific…
Earlier quoted context omitted.
>>> it is likely that private insurers wouldn't have fared much better. Why is it likely? There are many private companies controlling amounts of money comparable with amounts of money controlled by some governments. I'm not talking US government of course but there are many smaller ones. Such companies are usually multinational corporations carrying much less local political risks and less prone to engaging in stupi…
> Why is it likely? There are many private companies controlling amounts of money comparable with amounts of money controlled by some governments. You assume complete rule of law is maintained in the absence of government, which is a non-trivial assumption. To exercise control of said money, especially in times of turmoil, you need an underwriter, usually in the form of police and/or army, which usually require the g…
You seem to operate under impression there's only one government. That is not so - in fact, there are many different governments and many different ways to store money, which allows to hedge the risks.
>>> It's a game of semantics.
It's not. There's a point when failing government resorts to actions which go beyond regular taxation - such as hyperinflation, confiscations, defaults, etc. In such cases governmental insurance is no good as there's much more chance it will hurt you than benefit you. For the private company, the minimum you get is zero, but for the government it can get way worse than that.
Mark decided that he would do what he thought was right: he would slowly earn back the lost bitcoin with MtGox trading fee profits and eventually make his customers whole again. He still had over 500,000 BTC left—he moved 424242.42424242 BTC between bitcoin addresses and convinced the community that MtGox was solvent. So, bitcoin is actually a hybrid fiat+cryptocurrency? Since there is little transparency, a signific…
"Fiat" does not mean "accounting fraud".
When bitcoin started it was touted as anonymous, reliable and secure against fraud and theft by central authorities (especially government.) I had some doubts (and other interests) so didn't bother getting into bitcoins. Now we find out that bitcoin definitely isn't secure, and fraud by central authorities is just as possible as with any complex system of representing monetary value. I really think it's a universal L…
It's actually less possible. It's just that the community lets the central authorities get away with it. With BTC, the exchanges can publically prove their assets. (Of course, if all of them got together to collude...)
Earlier quoted context omitted.
> Why is it likely? There are many private companies controlling amounts of money comparable with amounts of money controlled by some governments. You assume complete rule of law is maintained in the absence of government, which is a non-trivial assumption. To exercise control of said money, especially in times of turmoil, you need an underwriter, usually in the form of police and/or army, which usually require the g…
>>> . To exercise control of said money, especially in times of turmoil, you need an underwriter, usually in the form of police and/or army, which usually require the government to be functional. You seem to operate under impression there's only one government. That is not so - in fact, there are many different governments and many different ways to store money, which allows to hedge the risks. >>> It's a game of sem…
For the omnipresent omnipotent investor, that might be true , but probably is not true even for that investor -- e.g. the US government can and does have a wealth tax in the form of inflation, that applies to every single asset class anywhere in the world, enforced through FATCA/FBAR; You have no legal way to protect your assets against inflation+taxation).
If you're in Cyprus, and you need money usable in Cyprus, you are dependent on a functional Cypriot government, one that did not employ capital controls (But they did...)
Furthermore, a lot of people here are unaware, but for at least 3 months, there was more than one currency called "Euro": The Greek Euro, and the non-greek Euro. Banks in Germany would NOT accept greek Euro, or remit non-greeo Euro to a greek bank without collateral or other guarantees. All fiat money is fungible.
>> It's not. There's a point when failing government resorts to actions which go beyond regular taxation -
Your statement is ironic. Who gets to define what "regular taxation" is? The US had, at times, 80% taxation. Is that regular? The US government has been running a much higher than reported inflation for years. Is that regular?