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Bitcoin The Almighty Buck

Bitcoin Exchange Mt. Gox Halts USD Withdrawals 173

Posted by Soulskill
from the keep-your-eye-on-the-other-shoe dept.
hypnosec writes "World's largest Bitcoin exchange, Mt. Gox, has halted U.S. dollar withdrawals of customer funds in the U.S., citing a need for system improvements. According to Mt. Gox, the exchange has experienced a huge number of requests for deposits as well as withdrawals from both established markets and new markets, following which its bank hasn't been able to process transactions on time. This led to difficulties for its overseas clients, especially those in the U.S. The exchange said that the deposits in USD, transfers to Mt. Gox, and deposits and withdrawals in other currencies will remain unaffected during this period. Mt. Gox will be resuming the USD withdrawals for its U.S. clients once the improvement of its systems is complete." Wired suggests the slowness may be due in part to reluctance from banks to get entwined with Bitcoin for a number of reasons. "The problem is that U.S. banks are afraid that doing business with Bitcoin companies might draw the attention of U.S. or state regulators ... This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry. Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees."
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Bitcoin Exchange Mt. Gox Halts USD Withdrawals

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  • by deego (587575) on Saturday June 22, 2013 @01:51PM (#44079405)

    "That's what you get for money laundering". "Why don't they bother to do things properly?" That's the typical knee jerk slashdot reaction I have seen to other such news, such as Liberty reserve crackdown.

    What such comments fail to realize is that doing all the FINCEN and state registration stuff in 50 states easily costs upwards of a million dollars per year, not to mention the need to hire several lawyers. Even FINCEN registration, which is supposedly free, requires an ongoing training program for your employees, among other things.. Complying with myriad financial regulations is not easy, is costly, and takes time. On top of that, interpreting the regulations itself is a nightmare..

    Look up "regulatory capture." The net effect of these laws is that only 4 or 5 companies (paypal, for example) in the whole country manage to check all the dots.

    • by kamapuaa (555446) on Saturday June 22, 2013 @01:54PM (#44079431) Homepage

      You seem to believe the banking industry is over-regulated.

      • Re: (Score:1, Troll)

        by Cryacin (657549)
        You seem to be shilling that more incorrect regulation is the right way.
        • Re: (Score:2, Insightful)

          by kamapuaa (555446)

          Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme. Seems to me that if the banking regulations are keeping that sort of entity out of the market, they're doing exactly what was intended.

          • Re: (Score:2, Flamebait)

            by rockout (1039072)

            Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme.

            How's that different from the US dollar, then?

          • by sacrilicious (316896) on Saturday June 22, 2013 @03:18PM (#44079917) Homepage

            on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme

            Have the courage to speak for yourself and only yourself. Everybody here wants you to do that.

          • by guardiangod (880192) on Saturday June 22, 2013 @03:25PM (#44079983)

            Do you know the definition of Ponzi scheme? Because I don't think that term means what you think it means.
             
            Bitcoin is many things, but it is as much of a Ponzi scheme as gold, real estate, or stock speculations. ie. not a Ponzi scheme at all.

            While one can argue that Bitcoin is a scam (and most definitely a bubble), it does not fit the formal definition of a ponzi scheme.

            http://www.sec.gov/answers/ponzi.htm [sec.gov]

            >>A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

            The key point here is the "solicit new investors by promising to invest funds in opportunities claimed to generate high returns" section. In a normal Ponzi Scheme, the previous investors would attempt to guarantee newcomers that profit is certain.

            In comparison, Bitcoin promises no such thing. While it is true that the profit of previous investors (or speculators) do indeed come from newcomers, the newcomers are not promised anything beyond their belief that the price will continue to rise.

            This key difference makes the Bitcoin phenomenal a 'Bubble', not a 'Ponzi Scheme'.

            • It's definitely a scam at some levels. The entire system was designed to reward the earliest adopters (the creator, for instance) disproportionately.

              The creator being absolutely anonymous, and working very, very hard to remain absolutely anonymous, is also very suspicious. His cited reasons for doing so can be seen as reasonable in one respect, but they also cast large doubts to me -- the justifications come down to an assumption of success (rather than just being a neat little pet cryptography project), and the system has extreme financial rewards for them personally if that success comes. If they were assuming success and didn't intend to exploit it, the system wouldn't have had such large rewards to begin with, with those rewards diminishing so rapidly.

              It's also been a pretty spectacular failure as a currency (the rapid, vast value fluctuations are a big problem for serious use -- aside from illegal usage, where that can be tolerated for the anonymity benefits), but has been a resounding success as a method of making some people get very, very rich.

            • by jhol13 (1087781)

              Bitcoin is definitely a Ponzi. The fact that it does not "solicit" IMHO does not make it go away. Madoff didn't promise "little or no risk" and still it was a Ponzi.
              Key point is that all money coming in is from new users, there is no real value anywhere.
              When the Bitcoins inventor cashes his 20% of all "currency" he owns, the newcomers will be left emptyhanded. Just like in any other Ponzi.

            • Bitcoin itself is just a currency and it's traded on numerous exchanges. But the latest MtGox move is interesting: A typical sign of a ponzi scheme is that they start limiting withdraws when they start to collapse. Who knows how much MtGox actually lost when DHS took their Dwolla account? And keep in mind that they just announced that there will be no more withdraws on June 20th. There are people who've been waiting for withdraws - still not processed - since June 5th. Also have a friend who managed to with
            • This key difference makes the Bitcoin phenomenal a 'Bubble', not a 'Ponzi Scheme'.

              We should add though, that every new market bubbles: technology that promises, at the least if the quantity restrictions are maintained, to provide a way to exchange value and make currency-like transactions less subject to restrictions and interference by outsiders, is technology that will likely gain "currency" (no pun intended) with conscientious (not to mention unscrupulous) people at the least, especially those worried about inflation. Bubbles eventually pop, but it doesn't mean all real (or real-like)

          • "Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme."

            Only by people who don't understand how it works.

      • by deego (587575) on Saturday June 22, 2013 @01:58PM (#44079467)

        I hope you realize that the regulation in this industry currently serves one purpose: It keeps newcomers, and anyone not "BIG" out of the market.

        Hard to understand it unless you try starting a business in this area and see this firsthand.

        • by stymy (1223496)
          If you can't afford to pay a million dollars a year, then maybe you shouldn't be a bank. Since the government guarantees plenty of deposits in banks, it's quite reasonable that they make sure only banks with enough funds to survive are allowed to be banks.
      • by JDG1980 (2438906)

        You seem to believe the banking industry is over-regulated.

        Banking regulations aren't all the same thing. Regulations that try to prevent insider self-dealing or offloading costs on taxpayers are a good thing. Regulations that basically make banking privacy for individuals illegal are a bad thing.

      • Regulation is not a monolith. There are some good laws and some bad ones. I think we'd like to point out that the ones aroud money laundering are particularly bad in that they are not very effective for catching crooks but very good at stopping normal people from providing for themselves.
      • Yes, it is over regulated in some ways. For instance - there is a requirement that when you deposit or withdraw X amount of dollars, the government be notified. Why? WTF business is it of the government that I am shuffling around money THAT BELONGS TO ME? Suppose I'm just doing some home renovation. I went to the city, got my "building permit", tore down the stuff that's in the way, and now I'm paying the lumber supply for my new stuff. GOVERNMENT NEEDS TO KNOW? Really?

        Every legislator who thought th

    • for all their faults, ordinary banks, in general, do not like dealing with certain types of criminal customers.

      there are a lot of checks and balances inside most banks regarding deposit accounts, and transfers between them. some of it is government regulation, some of it is just because banks dont like being ripped off or having their customers ripped off. no bank wants more regulation, but no bank wants to interface its internal systems to some fucking glorified drug-fencing operation. except maybe Wells F

      • Re: (Score:2, Insightful)

        by ArsonSmith (13997)

        The crash of 2008 was specifically due to regulation. The government thinking that banks we're not loaning enough money to people that were unlikely to pay it back so banks were given incentives to do so by regulation. This made for the artificial bubble in people getting cheap loans. Then as it turns out that these people were a bad risk as the banks estimated in the beginning and didn't pay loans back it crashed.

        If there's a perceived problem with free market, government can usually guarantee there's a

        • It saddens me that a comment that hits the nail on the head like yours will languish at +2 moderation; perhaps if you had blamed it entirely on the banks you might have gotten modded up.

          • by ArsonSmith (13997)

            Blaming the banks is as bad as blaming someone that decided to skip out on a lower paying job because they could continue to collect unemployment for another year or more. They are both in the wrong, but they were put in a government back situation where it would be stupid not to go along with it.

        • by winwar (114053)

          So banks knowingly made bad loans and it was the regulations fault? Regulations that were loosened over time, which is what I assume you meant by incentives.

          Sorry but that is a failure of logic.

          • by ArsonSmith (13997)

            Pushed incentives from the government are a form of regulation. Sorry to have to educate you.

        • by rockout (1039072) on Saturday June 22, 2013 @03:08PM (#44079849)

          I've heard this line of BS many times and it amazes me how many people buy into it.

          It's a nice line that anti-government types like to pull out, and the only problem is that it ignores reality and gets it backwards. Banks basically paid off, through lobbying and "donations", both legal and illegal ones, enough members of Congress to get regulations RELAXED - as in, the law signed in 2000 that made Wall Street exempt from the "bucket shop" restriction. Great idea! Except that it was the biggest contributing factor to sinking the economy. The bad loans themselves, if that were all that were being defaulted on, were a tiny fraction of a percent of our GDP. The bad bets MADE on the loans, however, compounded the problem by orders of magnitude.

          In other words, even if your claim of government forcing banks to loan more money were true (it's debatable, and if you read enough about it it's clear that the banks weren't being forced to do anything they didn't want to do) - it STILL didn't sink the economy. Deregulation, of one specific type, did.

          • by The Second Horseman (121958) on Saturday June 22, 2013 @03:49PM (#44080117)

            The steady erosion of Glass-Steagal through the 20th century, culminating in the 1999 GLBA which repealed sections 20 and 32 certainly had a big part to play in this. Without that, the interdependence effect we saw would likely not have occurred to the same degree.

            The fact is, a lot of people in finance aren't bright enough - or cautious enough - to understand or care exactly what risks they're taking, especially with other people's money. To use an old analogy, the modern financial system is like the ferry service in an impoverished coastal country. Everyone uses it, because it kind of works. It's overcrowded, run by greedy people cutting corners, and every once in a while a ferry sinks, killing somewhere between 800 and 1000 people. But the next day, the rest of the identical ferries are out, and people are lining up to get on board because they don't have a choice.

            At least after the S&L debacle, people got prosecuted. This time, they were let off the hook.

            • The fact is, a lot of people in finance aren't bright enough - or cautious enough - to understand or care exactly what risks they're taking, especially with other people's money. [snip]

              At least after the S&L debacle, people got prosecuted. This time, they were let off the hook.

              If you read these two quotes together, it sounds like these guys -- at least the ones calling the shots -- were clearly very bright: they convinced lots of people to give them money, then lost most of it, in many cases even did things that were probably illegal or at least totally unethical, and almost all of them walked away totally free -- the leaders with a boatload of cash for themselves.

              How many other people can adopt completely ridiculous, irresponsible, and potentially illegal business practices to

              • by ArsonSmith (13997)

                I got a great idea, Lets loan a bunch of money to people we're pretty sure wont pay it back. Sounds like a great business plan right?

                Oh, the caveat, we don't have to worry about the loan because the government will guarantee it for us. We don't even have to worry about it once we have the loan origination fees.

                Of course with out stupid government regulation this business plan would have never worked. It was even worse than most other types of welfare and almost as bad as things like rent control.

                • by rockout (1039072)
                  It's almost like you replied to three posts above you without even reading them. Hmmm.....

                  I got a great idea, Lets loan a bunch of money to people we're pretty sure wont pay it back. Sounds like a great business plan right?

                  This part is sort of accurate but an oversimplification. In reality, they were pretty sure a certain percentage wouldn't pay it back (higher than the normal foreclosure rate), which is why they charged higher interest on those loans. According to the fuzzy math being used, they'd still make money in the long run. They didn't count on a massive real estate bubble that resulted, and the subsequent higher foreclosure r

                  • by ArsonSmith (13997)

                    Ohh yea, sorry, government good, private industry bad. What was I thinking, let me bow to my masters.

                    • by rockout (1039072)
                      Nobody talked in such absolutes except for you. Wake up. The world is a complicated place. Maybe you try to oversimplify it into black and white for a personal reason.
          • by ArsonSmith (13997)

            Of course they only did what they wanted to do. The government didn't force anything but they sure as hell incentivised them to the point they couldn't really do anything else. I suppose you could call that "RELAXED." in some kind of twisted way. What you call relaxed was quite the opposite. The government basically paid banks to originate loans that would be bought up by government funded entities.

        • It would be nice if that were the truth. Yes, the Bush administration made it a priority to get people into homes.
          The mortgage brokers cheated lenders with subprime mortgages. They got their commissions and people lost the houses they couldn't afford in the first place.
          The lenders then sold bad loans to investors like Goldman Sachs.
          When the bottom finally fell out, two financial instruments companies went down. The rest got their money back from the government.
          To explain exactly how much cheating was going on, the utter trash that GS knew was trash, they sold to investors. They also took out insurance policies on it.
          Then AIG collapsed because of those policies and the government paid their policies. GS took that money and used it to buy securities.

          So, GS engaged in quasi-criminal behavior and fraud. They bought, packaged, and sold turds. Took out turd insurance and then used the insurance to buy money.

          In case some can't follow along, the took the government bailout and loaned it back to the government with interest.

          So, no, the crash of 2008 wasn't due to regulation, it was due to fraud. And no one went to jail.

          • by Vaphell (1489021)

            the whole thing wouldn't fly in the first place if the government mandated rating agencies didn't give AAA status to that junk (mandated because the law requires to use *their* ratings to evaluate portfolio risk). You could argue that these agencies are private, but time and time again it was shown that once you get that special privilege granted by the govt, you may stop trying and still do just fine.
            While GS are scum, they did a perfectly rational thing and exploited the shit out of a severely mispriced a

          • by schnell (163007)

            So, no, the crash of 2008 wasn't due to regulation, it was due to fraud. And no one went to jail.

            In my experience, any explanation for a calamity that casts blame on only one "side" is usually incomplete or overly simplistic.

            The best explanation I have ever heard of the crash came in NPR's "Planet Money" reporting series on the crash, specifically their Peabody-winning show "The Giant Pool of Money [thisamericanlife.org]." To give you the short version:

            • Global private investors and government-backed investment funds got greedy. They liked US treasury bills for being stable, but they hated the low interest rates. They yelled
            • by DragonTHC (208439)

              I can appreciate your interest. The paraphrasing is much like the original and it's not wrong.

              But you left out two key points.

              GS knew the instruments were bad investments when they sold them to customers.(there are internal documents proving this).
              GS also used the insurance money paid by the government bailout of AIG to buy securities.

              The public at large didn't defraud the government, the government didn't defraud itself.
              GS engaged in fraud.

              So when you say everyone is to blame, you really mean financial ins

      • Re: (Score:2, Interesting)

        by PPH (736903)

        for all their faults, ordinary banks, in general, do not like dealing with certain types of criminal customers.

        Only because the gov't has criminalized the free movement of funds. Banks could care less about their customers so long as they behave themselves while in the lobby. But they have been pressed into service by the state as quasi-police. Because the state cannot detect (or be bothered with identifying) actual criminal activity.

        The amount of funds that move per unit time for legal purposes is orders of magnitude more than those supporting criminal activities. Compliance with FINCEN regs for all of these legal

    • aka shunned by markets.

      if it was labelled a CDO and Mt. Gox was named instead Bear, Stearns, and Co., perhaps those who followed the international credit crisis in 2008 would understand the relationship to established markets better.

      there's a reason I call it BiteCon. it's like a Left Pocket Bank.

  • by brunes69 (86786) <slashdot@nOsPAm.keirstead.org> on Saturday June 22, 2013 @02:10PM (#44079541) Homepage

    The idea that banks are hesitating to do business with these exchanges because Bitcoin is posing as a "thread" is hilarious on it's face.

    Ask any average person on the street what a bitcoin is and you will be greeted with nothing but blank stares.

    People who use bitcoin and drive up it's value are living inside a reality distortion field of their own making. This supposed currency is going nowhere.

    • by Nrrqshrr (1879148)
      Well, color me ignorant, because I am, but it seems that banks feel indeed threatened by it because, as you said, it IS something unreal, and those who use it and believe in it are deluded. But if "Famous Bank X" starts dealing with it, bitcoins will have that one proof of existence and even your average joe will now hear of it.
      But then again, this is my personal take on the situation, and am just a dude watching the news on his laptop.
      • it seems that banks feel indeed threatened by it because, as you said, it IS something unreal, and those who use it and believe in it are deluded. But if "Famous Bank X" starts dealing with it, bitcoins will have that one proof of existence and even your average joe will now hear of it.

        The reason why banks aren't interested is probably because it's just not worth caring about. It has nothing to do with a "threat."

        There are two types of users of bitcoins (now, and likely in the foreseeable future):

        (1) the same kind of anonymity-seeking people who do things like use Tor, a combination of (a) people who need secrecy for illegal (or questionably legal) activities, (b) anti-authoritarian extremists, and (c) other people with strong ideological perspectives on privacy

        (2) speculators who

    • by ArsonSmith (13997)

      I'm pretty sure you'd get a blank stare from a large portion of the different names of the so called "Legitimate" moneys

      http://www.science.co.il/International/Currency-Codes.asp [science.co.il]

    • by david.given (6740)

      ...Bitcoin is posing as a "thread" is hilarious on it's face.

      Bitcoin raining down from the Red Star, threatening to destroy all life on our planet, and only an elite squad of fire-breathing US drone fighter aircraft can save us? I agree that this does seem a little hard to believe.

    • by xiando (770382)

      People who use bitcoin and drive up it's value are living inside a reality distortion field of their own making

      lol, ever tried paying for something using Bitcoins? It's way faster and cheaper than paying using credit cards. A lot of places give you a discount if you pay using Bitcoin. Saying people who use Bitcoin are "living inside a reality distortion field" is as silly as saying the same thing about people who use other currencies like USD and EUR.

      As for it's current value and those driving up the price.. my USD/BTC position is currently minus a three digit figure (yes, everyone on ##BTCPro is net short right

  • by Animats (122034) on Saturday June 22, 2013 @02:14PM (#44079563) Homepage

    That's a typical Mt. Gox excuse. "We're going to hold onto your money for some vague amount of time for some vague reason." Note that they're only stopping withdrawals from Mt. Gox, not inbound transfers. That's very suspicious. If they'd lost their banking relationship for wire transfers, they couldn't do inbound transfers either.

    I've mentioned before that Mt. Gox's withdrawal limits are suspicious. They should be able to pay out 100% of funds they hold on short notice. They're not a bank, and are required by the Payment Services Act of Japan [amt-law.com] to have 100% of the assets entrusted to them. Even more suspicious is that as Bitcoin has grown, Mt. Gox withdrawal limits [mtgox.com] have become smaller.

    If you have assets in Mt. Gox, get them out now. There are too many red flags about that business.

    • by tepples (727027)

      Mt. Gox withdrawal limits

      Can be increased if you provide photo ID. For comparison, you have to provide photo ID to get a bank account or even to verify a Facebook account without having your own cell phone number that isn't shared with another Facebook user.

      • by Animats (122034)

        Their highest tier is "Maximum monthly withdrawal of 500,000 USD (or equivalent) capped to a maximum of 100,000 USD per 24 hrs and a 10,000 BTC withdrawal per 24hrs without any monthly limit." That's small in financial terms.

    • by xiando (770382)

      Note that they're only stopping withdrawals from Mt. Gox, not inbound transfers

      As said in another comment above: A typical sign of a ponzi is that they start to limit withdraws when they start to collapse. The problems with withdraws isn't new, btw. There are several people I know who are still waiting for five figure USD withdraws initiated in the beginning of this month. Do they have the money? You'd think so, but nobody really knows how much DHS took from their Dwolla account. And then there is the coinbase debacle

  • This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry.

    Or more likely from the sense it could draw the full weight of federal law down on them for facilitating money laundering.

  • But can you withdraw Euros, or Pounds (Sterling) or Yen or Lunies ?

  • by shentino (1139071)

    I wonder if Mt. Gox having their bank accounts seized by the feds has anything to do with it.

    That's the thing about asset forfeiture. If the feds drop a nuke on you, anyone you owe money to gets shafted by the fallout even if they're completely innocent.

  • Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees.

    In other words, it's a lot more efficient and cuts out the now unnecessary plethora of middlemen.

    Welcome to the future!

    I'd would short sell stocks in banks & credit card processors if you're dumb enough to still have any. It may not be bitcoin, but it will be a digital distributed currency that kills the banks.

    If it weren't for the continuous and ongoing bailouts they would have already c

    • by stymy (1223496)
      The reason no digital currency will ever be used to such an extent is that they are truly worthless. Just because something is rare doesn't mean it's valuable. Also, I've yet to see a digital currency that can scale with a growing economy in order to avoid deflation. That instantly makes hugely widespread adoption impossible, as if a currency starts growing in value, then people will just hoard it, its velocity will fall off a cliff, and it'll just lose the value it gained and then some.

      Government-issued c
      • by xiando (770382)

        The reason no digital currency will ever be used to such an extent is that they are truly worthless.

        The vast majority of USD and EUR are digital. Only a small percentage exist as cold hard cash. Bitcoin is just another digital currency, just like USD, EUR and JPY. Yes, USD and EUR and JPY also have non-digital versions - but the amount is insignificant.

  • by EdgePenguin (2646733) on Saturday June 22, 2013 @03:59PM (#44080175) Homepage

    Surely having your Bitcoins held by a third party (especially one that, going on this story, might not be entirely honest about its internal workings) defeats the point of a 'decentralised' currency? How is being at the mercy of these clowns any different from being at the mercy of your governments central bank?

    Well, one difference is that you can vote for the government that controls your central bank. With this lots its just caveat emptor

    • by gl4ss (559668)

      well.. you need to keep them in there for trading - at least for transient amount of time.

      but this could be one thing why they can't comply with US regs.they cannot seize the bitcoins that have been bought through their system. even if the culprits could turn them back into cash through their system. if you just look at it as a website that you put money into and take money in it acts like a bank, so you would need to convince the lawyers that it's not just a semantic trick why you are unable to seize asset

      • If I understand Mt. Gox's website correctly, they do hold your BitCoins in their own wallets, and they can be transferred to the client upon request. If true, this raises the question of whether they actually hold a full reserve of the BitCoins they claim to.
    • by stenvar (2789879)

      No, it doesn't defeat the point at all. A "central bank" controls the money supply according to political and economic whims. Nobody can do that for Bitcoin. Bitcoin works like gold and banknotes used to work, not like fiat currency in an account.

      • Unless its in the wallet on your own computer, how do you know its not fiat money? When your bitcoins are with Mt. Gox, how can you verify that they haven't been shuffled off somewhere else?
        • by stenvar (2789879)

          Unless its in the wallet on your own computer, how do you know its not fiat money?

          One can debate at length about what "defines" fiat money. But the distinguishing property that Bitcoin has (and that fiat currencies don't have) is that no political entity can control the money supply.

          When your bitcoins are with Mt. Gox, how can you verify that they haven't been shuffled off somewhere else?

          Because ensuring that is the primary purpose of the Bitcoin protocol (however, as noted above, that has nothing to do wit

    • by gox (1595435)

      My disagreement about the extent of power you ascribe to voting aside (i.e. by comparison, choosing another exchange over MtGox is practically easy, whereas succeeding in changing how the central bank is managed even if you dedicate your whole life to it is a daydream), keeping bitcoins on MtGox surely defeats the purpose of Bitcoin.

      Having said that, the issue seems to be about the USD kept in MtGox, which is equivalent to any sort of exchange trading on any sort of regulated institution. The exchange rate

    • Surely having your Bitcoins held by a third party (especially one that, going on this story, might not be entirely honest about its internal workings) defeats the point of a 'decentralised' currency?

      Surely having a currency that relies on the whole network knowing every transaction and approving isn't actually decentralized. More to the point though, even if it were decentralized in truth, its point wouldn't be defeated just because some people decided to pool their resources like this.

  • Bitcoin is really an amazing thing. The ability and ease by which you can send any fraction of money anywhere rather easily is quite an accomplishment. Yet, without any sort of insurance I do not believe this market can stand. Sure you can keep your coins in a paper wallet offline, but those coins have to come back online sometime. When they do, you may just be the victim of just the right 0-day exploit and suddenly all your coins have been sent off to a mysterious Bitcoin address.

    Was that the majority o
  • by stenvar (2789879) on Saturday June 22, 2013 @05:57PM (#44080891)

    Bank (US and European) also hate the competition; Bitcoin undermines and threatens a lot of the traditional revenue sources for banks.

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