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Originally Posted by Hehe
You have a point. Poorly run exchanges/banks/whatever can make catastrophic damages no matter what kind of asset we hold.
Nevertheless, it still doesn't change the fact that BTC is fundamentally unable to do what regular currency can because of its nature.
BTC is unregulated and untraceable; making nerds and hippies to go nuts because now it's "free" of control. However, without a governing body, very little (if any) can be done when shit happens.
For this reason, it's very hard to believe that BTC would be able to sustain any long term stability because the more stable BTC becomes, the more valuable it is. And the more valuable it is, the more incentive it gives people to go bad. It's simply human nature. And the best part? There is really no serious law in any country that penalize such.
There are people suing MtGox in US... and from my understanding in some commercial law in US, the most they would get from MtGox or its founder would be a few years of prison (up to 5years from what I read) and minimal financial penalty because the status of BTC is null in a court of law. Even if convicted and the judge feels like setting a precedent, there is no law they can use as BTC is not part of the financial system and therefore the laws applied on financial market don't mean jack here.
And even if he gets the full setence, 5 years in a low security jail for 400M? Heck, I wouldn't think twice.
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However, without a governing body, very little (if any) can be done when shit happens
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So let's compare "shit happens" with losing your bitcoin wallet, and losing the wallet in your pocket that has money in it.
What do 'regulations' do when someone steals your bitcoin wallet? The police can look into the theft. Maybe they'll recover it.
What happens when someone steals your wallet and cash? Police can look into the theft. Maybe they'll recover it. At most, you'll get your wallet back.
How do regulations help you in this case?
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And the more valuable it is, the more incentive it gives people to go bad. It's simply human nature.
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So just like money then...
The funny thing about the anti bitcoin sentiment is that people seem to forget that there is no inherent safety in dealing with cash either, for the most part. You are protected if you keep your deposits in a bank that goes under, but beyond that, how else are you more protected? If you invest with some shitty mutual fund and they lose all your money, where are you going to go to get your money back? So instead, you would smartly go to a more established institution. You would do the same with Bitcoin. Thing is, it is literally brand new, and these institutions are in the process of establishing themselves right now.
As for suing Gox, who knows. Everything is so new right now. Which is why i keep saying it is literally stupid to say you know something has failed or not failed, or will fail. It may, but I think enough people WANT it to work, and the design is nearly perfect (if not perfect) that I don't see how it would. So far some things have happened, but people kept it going. It is going through growing pains, and each time something happens, the old school crowd says "bitcoin failed, I was right". Only to see it bounce back, because so many people want it to work.