Earlier quoted context omitted.
Your unregulated financial institutions fail to take basic security measures to protect consumers, they frequently halt withdrawals without warning, your uninsured deposits are sucked into the void, your speculative 'currency' experiences extreme daily deflation and inflation... Better blame proprietary software. Whatever you do, don't question your assumptions. And under no circumstances should you think about the f…
I heard of a cool tech called the dollar so I figured, what the heck, I'll give it a try. Turns out they try to make you spend it by continually inflating the supply of them out there with no end. In order to keep your head above water, you have to put in a "bank". Fine, it compensates you for the loss of purchasing power, so no biggie, right? Wrong. They actually lend out the dollars that are supposed to be in your…
The troubled history of the Bitcoin exchange MtGox
31–38 of 38 posts
Re: The troubled history of the Bitcoin exchange MtGox
#32Earlier quoted context omitted.
And this, this statement is why I believe that Bitcoin or really any cryptocurrency will never have more than a fraction of a fraction of 1% of any transactions, and will never take off in the mainstream. The reason that people use fiat currencies is because they can trust the institution/government backing them. They can trust that if they are handed a dollar by a business, it's a dollar, no questions asked. If folk…
What does "legit" mean exactly? You can cryptographically verify every transaction.
In this instance, it has nothing to do with being able to cryptographically verify anything. It has everything to do with appearances. Take the average suburban housewife; do you believe that she cares that PinkyPie69 can cryptographically verify anything, or will she care that this person is a full grown human who loves a children's show?
Small-mindedness will usually trump technological ability.
Re: The troubled history of the Bitcoin exchange MtGox
#33Earlier quoted context omitted.
And this, this statement is why I believe that Bitcoin or really any cryptocurrency will never have more than a fraction of a fraction of 1% of any transactions, and will never take off in the mainstream. The reason that people use fiat currencies is because they can trust the institution/government backing them. They can trust that if they are handed a dollar by a business, it's a dollar, no questions asked. If folk…
>The reason that people use fiat currencies is because they can trust the institution/government backing them. Bitcoin is a fiat currency and I trust the Bitcoin specification a lot more than I'll trust any central bank. They're notorious for usury, secret bailouts, and inflation. >They can trust that if they are handed a dollar by a business, it's a dollar, no questions asked. Well you can trust that if you're sent…
>Bitcoin is a fiat currency and I trust the Bitcoin specification a lot more than I'll trust any central bank. They're notorious for usury, secret bailouts, and inflation.
That's great for you. What about the average consumer?
>This is the same thing that happened with online shopping at the end of the '90 and early '00s. Consumers got used to using their credit cards online and they will get used to the notion of owning, transferring, and protecting digital property.
Except with the vast difference that credit card companies were already well established in mainstream life, and people trust them (right or wrong) to keep their information safe. Pair that with a massive PR campaign on the part of credit card companies, and you've got something.
>There is no such headache. The software will improve and the banking infrastructure will grow. I expect to see banks that hold their reserves in Bitcoin and give out lines of credit denominated in Bitcoin. Infrastructure will solve this problem, but first capital is needed to meet current regulatory compliance with the archaic legacy system that is currently in place.
Yes, yes there is. Imagine, again, being an average suburban housewife. Now, try to cash out your bitcoin. Try to wrap your head around the volatility of the currency.
I genuinely believe you're being a bit too optimistic about how banks and bitcoin will interact. After consulting with large and small banks alike, I've learned they are incredibly risk averse. Something as volatile as bitcoin, and as out of their control, is a red flag from day one. There may come a day when banks exchange in bitcoin, with heavy fees, but I'm not certain that they will hold their reserves in it, or extend lines of credit in it, either.
There's more to this than having a secure currency. There is a lot of politics. There is quite a bit of control that banks want to have. They, generally, want to make sure that any bets they make can be insured. Can they do that with bitcoin?
Cryptocurrency in general, but Bitcoin and dogecoin especially strike me as being marketed as the next big get rich quick scheme, and I'm leery of that, regardless of the technology behind it.
Maybe I'm wrong, who knows; I'm just fascinated to see this develop, and am generally as cynical as possible.
Re: The troubled history of the Bitcoin exchange MtGox
#34Earlier quoted context omitted.
meh ... "those that can get the political connections" ... if you have the capital and do the paperwork and follow the regs, you can start a bank and get access to the discount window. "insurance fund couldn't handle yada yada yada" ... the FDIC is implicitly backed by the full faith and credit of the US government. As long as the Treasury exists and has the ability to tax and borrow, your deposit is money good up to…
> ... if you have the capital and do the paperwork and follow the regs, you can start a bank and get access to the discount window. Not true. There's this little extra step where first the regulatory authority gets to decide whether your state needs another bank.
sorry, I have no idea WTF you are talking about
Re: The troubled history of the Bitcoin exchange MtGox
#35Earlier quoted context omitted.
>The reason that people use fiat currencies is because they can trust the institution/government backing them. Bitcoin is a fiat currency and I trust the Bitcoin specification a lot more than I'll trust any central bank. They're notorious for usury, secret bailouts, and inflation. >They can trust that if they are handed a dollar by a business, it's a dollar, no questions asked. Well you can trust that if you're sent…
>Bitcoin is a fiat currency and I trust the Bitcoin specification a lot more than I'll trust any central bank. They're notorious for usury, secret bailouts, and inflation. That's great for you. What about the average consumer? >This is the same thing that happened with online shopping at the end of the '90 and early '00s. Consumers got used to using their credit cards online and they will get used to the notion of ow…
>am generally as cynical as possible
Then Bitcoin really isn't for you. Bitcoin requires faith in mathematics and humanity.
Re: The troubled history of the Bitcoin exchange MtGox
#36Earlier quoted context omitted.
> ... if you have the capital and do the paperwork and follow the regs, you can start a bank and get access to the discount window. Not true. There's this little extra step where first the regulatory authority gets to decide whether your state needs another bank.
sorry, I have no idea WTF you are talking about http://www.federalreserve.gov/faqs/banking_12779.htm
>>Before granting a charter, the OCC or state must be able to determine that the applicant bank has a reasonable chance for success
Re: The troubled history of the Bitcoin exchange MtGox
#37Earlier quoted context omitted.
I heard of a cool tech called the dollar so I figured, what the heck, I'll give it a try. Turns out they try to make you spend it by continually inflating the supply of them out there with no end. In order to keep your head above water, you have to put in a "bank". Fine, it compensates you for the loss of purchasing power, so no biggie, right? Wrong. They actually lend out the dollars that are supposed to be in your…
Amount of losses due to depositary institution failure since 1934: $0. This is a rather good record compared to bitcoin.
Assuming I can go global, here's an example where you are wrong: http://inequality.org/great-cyprus-bank-robbery/. I'm pretty sure Goldman Sachs got their asses bailed out as well by the taxpayers.
You shouldn't play a shell game with the money and say then say there are "zero losses", but people do. It's called cognitive dissonance and it sucks.
Re: The troubled history of the Bitcoin exchange MtGox
#38Earlier quoted context omitted.
Your unregulated financial institutions fail to take basic security measures to protect consumers, they frequently halt withdrawals without warning, your uninsured deposits are sucked into the void, your speculative 'currency' experiences extreme daily deflation and inflation... Better blame proprietary software. Whatever you do, don't question your assumptions. And under no circumstances should you think about the f…
You might want to question your own assumptions as well. Couldn't the fact that Bitcoin is less mature in many ways than fiat currencies be a result of the fact that Bitcoin was invented just 5 years ago? There was no involuntary deposit insurance for USD when USD was 5 years old.
Thank you. It is very frustrating to have a conversation with someone expecting a new technology to be fully baked upon delivery. Everything takes time, although in Bitcoin's case, it seems like a rocket ride compared to other technology adoption curves.