The Predictable Death of the Mt. Gox Bitcoin Bank - Politics and Economics

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The Predictable Death of the Mt. Gox Bitcoin Bank

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02-24-2014 , 06:13 PM

[Phill]

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De-regulated currency, what could go wrong?

http://valleywag.gawker.com/if-you-h...*ed-1529946212
(note the censor is breaking the URL, the stars are a word starting with f)

Quote:

Imagine if your bank wouldn't let you withdraw money, ignored your complaints, and then moved offices when you showed up at their door? If you put real dollars into Mt.Gox, the erstwhile top dog in Bitcoin trading, you've (sic) probably completely screwed.

Quote:

Trouble began for Mt.Gox when the feds started noticing its financial paperwork was a mess, and it was acting as a middleman for the internet drug trade. Bitcoin prices on the exchange plunged accordingly. That was only the start of the bad news.

Today, people with thousands (or even millions) of dollars or yen in real money tied up in Bitcoins can't touch it—there have been huge delays and blackout periods when customers try to remove their funds. Earlier this month, Mt.Gox stopped all withdrawals completely, and this month has seen the value of a single Bitcoin plunge from around $700 to a low of $75.

02-24-2014 , 07:01 PM

Trolly McTrollson

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Sure, our ACist friends have lost a ****load of money, but now Mt.Gox has reputation points, so everyone will know to invest their money in a different unregulated cryptocurrency dealer next time.

02-25-2014 , 10:41 AM

pvn

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hahaha phill

you might as well say weed is a bad idea because two drug dealers shot each other and the weed they owed some people disappeared. WHERE WILL YOU GET WEED NOW, HAHAHA.

02-25-2014 , 11:05 AM

Trolly McTrollson

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Quote:

Originally Posted by pvn

hahaha phill

you might as well say weed is a bad idea because two drug dealers shot each other and the weed they owed some people disappeared. WHERE WILL YOU GET WEED NOW, HAHAHA.

In this analogy, the anarchists are the ones who thought letting drug dealers hold their weed for them was a sound idea.

02-25-2014 , 11:09 AM

[Phill]

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pvn, that is probably your worst analogy ever. Which says a lot.

02-25-2014 , 11:11 AM

pvn

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Quote:

Originally Posted by Trolly McTrollson

In this analogy, the anarchists are the ones who thought letting drug dealers hold their weed for them was a sound idea.

yeah that was pretty dumb obviously. the market provided the correct incentive. Not sure what the problem is here, everything worked out exactly like it should have.

02-25-2014 , 11:16 AM

FlyWf

It's the other way

Join Date: Apr 2004 Posts: 58,097

By the way, not to be all egghead Mr. Economics degree, but this sort of **** totally used to happen all the time during free banking periods.

It's almost enough to make you think the Fed and FDIC and **** WEREN'T Zionist ploys to keep the poor oppressed, but were in fact reasonable methods of regulating currency.

02-25-2014 , 11:18 AM

[Phill]

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pvn, given that story is a HUGE win for the state and a HUGE loss for anarchy you probably shouldnt raise the flag of this working exactly as it should have.

02-25-2014 , 11:23 AM

ChrisV

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I didn't engage with pvn's analogy because I legit didn't understand what anything in it was supposed to represent.

02-25-2014 , 11:30 AM

#10

spanktehbadwookie

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Quote:

Originally Posted by FlyWf

I wonder if, when developing the A-10, the designers realized that making it all unique and cool would help it in fights like there.

Anyway, more to the point, last night's Daily Show had me bursting with joy:

http://www.thedailyshow.com/watch/mo...n-proclamation

That video is like watching a confederal-libertarian tank getting turned into a burnt husk by a hilarious un****ed fact missile.

02-25-2014 , 11:44 AM

#11

[Phill]

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Update:
http://valleywag.gawker.com/mt-gox-d...-it-1530533538

Quote:

Go to MtGox.com, and you'll see nothing. If you've been using the site to invest your money in Bitcoin, this is a nightmare.

According to a leaked document, purportedly from Mt.Gox itself, the exchange has lost 744,408 BTC (around $350 million) in theft and fraud that was never reported, and has nowhere near enough real money to satisfy all its existing customers who want to pull their virtual money out. In short: Mt.Gox users are ****ed, and Mark Karpele (above), the exchange's CEO, is gone without owing anything to anyone. Whether he disappeared with millions of dollars of his customers' money is anyone's guess—it sure looks bad. Financial regulators in Japan, where Mt.Gox was based, say they won't intervene, because virtual money is not their problem.

pvn:

Quote:

Not sure what the problem is here, everything worked out exactly like it should have.

ACism, ladies and gentlemen.

02-25-2014 , 11:53 AM

#12

FlyWf

It's the other way

Join Date: Apr 2004 Posts: 58,097

Guys nobody will ever trust that guy with $350M again. He'll be ostracized!

02-25-2014 , 11:59 AM

#13

MrWookie

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Join Date: Feb 2005 Posts: 94,159

Yep. I expect the most thorough of shunnings.

02-25-2014 , 12:01 PM

#14

Trolly McTrollson

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Quote:

Originally Posted by ChrisV

I didn't engage with pvn's analogy because I legit didn't understand what anything in it was supposed to represent.

I kinda get his point (and it's telling that someone else has to articulate it for him): the problem here is unregulated banks, not Bitcoins themselves. Like, in theory, you could have legit, FDIC-insured banks selling Bitcoins.

ofc, since pvn is also against banking regulations, it's not really a great time for him to be running a victory lap.

02-25-2014 , 12:04 PM

#15

bobman0330

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If only we had a state to regulate brokerage houses and financial intermediaries.

02-25-2014 , 12:32 PM

#16

pvn

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It's not even a problem with "unregulated banks." That's, again, like saying a drug dealer shootout is a problem with "unregulated capitalism". When particular economic activity is pushed out to the margin then bad **** happens (of course people like phillll have trouble with this line of thinking because he only thinks in positive terms, drugs are illegal ergo bad). And the nature of bitcoin makes using a "bank" like mt gox generally a weird idea. It's like buying a buggywhip for your new car.

02-25-2014 , 12:34 PM

#17

MrWookie

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No true Scotsman. A strawman. And no true Scotsman again. Three classic fallacies in four sentences. Nice work, pvn.

02-25-2014 , 12:43 PM

#18

AlexM

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Join Date: Dec 2003 Posts: 20,655

i'm far more "disturbed" by his used of quotations.

02-25-2014 , 02:45 PM

#19

pvn

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don't worry guys, nobody ever gets ripped off in a regulated financial system.

Spoiler:

02-25-2014 , 03:01 PM

#20

Trolly McTrollson

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Don't be fooled by the fact every one of our ACist friends uses FDIC-insured banks, unregulated banking is the nuts!

02-25-2014 , 03:04 PM

#21

MrWookie

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Join Date: Feb 2005 Posts: 94,159

Quote:

Originally Posted by pvn

don't worry guys, nobody ever gets ripped off in a regulated financial system.

Spoiler:

One more sentence, one more fallacy, and a novel one this time. Tu quoque up in this bitch.

02-25-2014 , 03:06 PM

#22

goofyballer

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Quote:

Originally Posted by pvn

And the nature of bitcoin makes using a "bank" like mt gox generally a weird idea.

Why? I have no desire to become the kind of security expert needed to safeguard my Bitcoin wallet from hacking, similar to how I have no desire to purchase a safe and firearms to guard my liquid net worth.

02-25-2014 , 03:09 PM

#23

[Phill]

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pvn, trying to score with kiddy game moves at the big boy game. I bet JPM would totally not screw people over if they had even less regulation. That is the problem, too much regulation. If JPM were unregulated they, err, would have no customers I guess?

When Madoff steals investor's money he goes to prison. When Karpeles stole investor's money he, well, seemingly he is just free to enjoy that money because he didnt break the law because Japan doesnt regulate fake money.

02-25-2014 , 03:40 PM

#24

Huehuecoyotl

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If anyone's curious, here's a repeat of the forum a few months ago played out on TV

http://www.mediaite.com/tv/the-daily...slavery-facts/

02-25-2014 , 03:57 PM

#25

pvn

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Quote:

Originally Posted by [Phill]

When Madoff steals investor's money he goes to prison. When Karpeles stole investor's money he, well, seemingly he is just free to enjoy that money because he didnt break the law because Japan doesnt regulate fake money.

How many wall street CEOs were prosecuted by your awesome banking regulators again? Was that a bigger or smaller problem than mt gox?

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