The Everything Bitcoin Thread

[Grapefruits]

He was reimbursed with interest. So the bank made it all better. He got his 'money' back.

The saddest part of this is the poor family had been saving the 'money' for 50 years starting in 1964. Broken down it is basically the equivalent of ~$35 per week.

What do you think $35 bought them in 1964 versus what it will buy them today?

So it's ok for the bank to take a year to pay him back when they are the ones who screwed up?

Not to mention all the other hoops the guy had to jump through to get his money back.

[mdehaan]

So it's ok for the bank to take a year to pay him back when they are the ones who screwed up?

Not to mention all the other hoops the guy had to jump through to get his money back.

No, not ok. Sounds like they were hoping he'd let it go. That wasn't the point of my post.

[î мцšт вяздк чфµ]

this whole bitcoin thing is a complete joke. anyways, more related news...

http://www.dailymail.co.uk/news/article-2573863/Bitcoin-exchange-CEO-dead-home-suspected-suicide-age-28.html

American Bitcoin exchange CEO found dead in her Singapore home after suspected suicide at age 28

• Autumn Radtke, 28, was discovered on February 28
  
• Previously worked for Apple in Silicon Valley before joining the burgeoning digital currency startup First Meta
  
• Authorities have yet to officially announce the cause of her death and are waiting toxicology reports
  
• Latest disaster to hit the bitcoin digital currency after the collapse of two high-profile exchanges in the past week
  
• Tenth death in six weeks in the global financial services sector
  

By DAILY MAIL REPORTERS

PUBLISHED: 15:23 GMT, 5 March 2014 | UPDATED: 19:45 GMT, 5 March 2014

The American CEO of an exchange for the troubled bitcoin digital currency has been found dead after a suspected suicide at her home in Singapore.

Wisconsin native, Autumn Radtke, 28, was discovered inside her apartment on February 28 and officials in the South East Asian city state are now waiting for toxicology test results to determine the exact cause of death.

Douglas Adams, the non-executive chairman of First Meta confirmed that his colleague had passed away in a statement which said the company was 'shocked and saddened by the tragic loss of our friend and CEO Autumn Radtke.'

The death of Radtke is the latest piece of bad news to hit the crisis-ridden bitcoin currency following the collapse of the Japanese-based Mt Gox exchange last week after $400m went missing and the closure of the Flexcoin bank yesterday in Canada after computer hackers robbed $600,000.

Scroll Down for Video:

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Tragic: Autumn Radtke, a 28-year-old American CEO of bitcoin exchange firm First Meta, was found dead in her Singapore apartment on Feb. 28

According to First Meta’s website, Radke had lived in Singapore since January 2012.

'The First Meta team is shocked and saddened by the tragic loss of our friend and CEO Autumn Radtke. Our deepest condolences go out to her family, friends and loved ones. Autumn was an inspiration to all of us and she will be sorely missed.'

Autumn Radtke began work in the technology sector at the age of 22 as a consultant for Virgin Charter, where she worked with chairman and billionaire entrepreneur Richard Branson.

Prior to her becoming CEO at First Meta in 2012, Radtke worked as a freelancer with Apple to bring cloud-computing software to John Hopkins University and Los Alamos Labs.

More...

• 'Where's our money?': Bitcoin investor may have lost £200,000 in £225million 'virtual bank job' on currency exchange as chief executive breaks his silence
  

She then took up roles at tech start-ups Xfire and Geodelic systems, companies that hat worked closely with giants such as Dell and Verizon, according to her LinkedIn profile.

Friends who worked with her in the past praised her to the hilt on her LinkedIn profile.

'Autumn Radtke offers a rare combination of business smarts and grace,' Brendan Kenney wrote about her time at Geodelic Systems.

'She possesses an amazing ability to connect with people in a real way, building the type of confidence, trust and relationships that open up doors and get business done.'

The exact reason that may have caused Radtke to commit suicide is not yet known, nor is when the police will release their official report to establish the cause of death.

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Entrepreneurs: British billionaire Richard Branson with bitcoin exchange First Meta CEO Autumn Radtke

First Meta offers an exchange where users can buy and sell virtual currencies such as the troubled bitcoin.

Forbes magazine reported in 2012 that the company received $466,000 in funding from Sunnyvale, California-based business accelerator Plug and Play Tech Center and Singapore's National Research Foundation.

On February 10, Radtke posted a link to an essay entitled 'The Psychological Price of Entrepreneurship' and commented obliquely that 'Everything has it's price'.

In comments posted on the day her death was announced, her friend Krystal Choo, who founded the online travel firm ZipTrip, said that 'This exact post has been killing me. I should have known in a way she was reaching out. I failed her.'

Watch Video Here:

Why Bitcoin operations are struggling around the world

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+9

Tragic: Autumn Radtke's official cause of death has not been confirmed to be suicide - although police souces have said that this is strongly suspected

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Sadness: First Meta CEO Autumn Radtke (left) with her friend Katie Stone (right) who wrote an emotional tribute to her friend who was found dead in her Singapore apartment on February 28

Radtke's friend, model Katie Stone posted a heartfelt tribute onto Facebook to her friend who passed away.

TRAGIC BEGINNING TO THE YEAR: NINE DEATHS IN FINANCIAL SERVICES IN THE SPACE OF LAST SIX WEEKS

1 William Broeksmit, a 58-year-old former senior executive for Deutsche Bank AG, was found dead in at home after apparently taking his own life in South Kensington in central London, on January 26

2 Karl Slym, the 51 year old Tata Motors managing director was discovered dead on the fourth floor of the Shangri-La hotel in Bangkok on January 27

3 Gabriel Magee, the 39-year-old JP Morgan employee, whodied after plummeting from the roof of the JP Morgan European headquarters in London's Canary Wharf on January 27

4 Mike Dueker, the 50-year-old chief economist of US bank Russell Investments was discovered dead near to the Tacoma Narrows Bridge in Washington State on January 31

5 Richard Talley, the 57 year old founder of American Title Services in Centennial, Colorado, was found dead on February 4 after apparently shooting himself with a nail gun.

6 Tim Dickenson, who was a U.K.-based communications director at Swiss Re AG, died in late January, in as yet unexplained circumstances

7 Ryan Henry Crane, the 37 year old executive at JP Morgan died in an alleged suicide just a few weeks ago on February 3 at his home in Connecticut

8 Li Junjie, 33-year-old banker in Hong Kong jumped from the JP Morgan HQ in Hong Kong on February 19

9 James Stuart, the former National Bank of Commerce CEO was found dead in Scottsdale, Arizona on the morning of February 19. The cause of death has yet to be announced

Calling her 'my first friend in LA', Stone said that Radtke took her 'under her wing' as she recalled spending time with the bitcoin entrepreneur in Singapore.

'I remember sitting on that tree stump with you in that park in Singapore a few months back, one of the nightly walks we would take when sleep was hard to come by and staring at that giant willow tree that was probably a thousand years old...just sitting in silence and taking it in,' wrote Stone in her emotional Facebook post.

'At home in nature. Appreciative of what we take for granted. You were just smarter that way than anybody else. You were a sister to me and I am at a loss.'

Despite Radtke's decision to base herself in South East Asia, the region has not taken well to bitcoin or digital currency exchanges..

On the day that Radtke was discovered in her Singapore apartment, Vietnam's communist government said trading in bitcoin and other electronic currencies is illegal, and warned its citizens not to use or invest in them.

A central bank statement late on Thursday didn't spell out penalties for those who disobeyed the instruction, but it said that virtual currencies are linked to money laundering and other illegal activities.

The collapse of the major bitcoin exchange Mt. Gox in Tokyo this week has drawn renewed attention to the currency.

Late last year, China banned its banks and payment systems from handling bitcoin. Thailand earlier put a blanket ban on its use.

Currencies like bitcoin are unnerving financial regulators in Asia and elsewhere because they are outside of their control. Established banks don't like them because people can send the money around the world with any fees.

Indeed as Bitcoin lurched from one disaster to another, on Wednesday, Flexcoin, a Canada-based bitcoin bank, said it was closing down after losing bitcoins worth about $600,000 to a hacker attack enabled by flaws in its software code.

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Humbled: Mark Karpeles, chief executive of Mt Gox, bows at the start of a news conference at the Tokyo District Court in Tokyo, as the company filed for bankruptcy after losing 850,000 Bitcoins

Flexcoin said in a message on its website that all 896 bitcoins stored online were stolen on Sunday.

Its collapse came after Mt. Gox, once the world's dominant bitcoin exchange, filed for bankruptcy protection in Japan and said it may have lost some 850,000 bitcoins worth $400m due to hacking.

'As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately,' Flexcoin said.

It later posted an update on its site saying that the attack exploited a flaw in its code on transfers between users and involved inundating the system with simultaneous requests to move coins between accounts.

'Flexcoin has made every attempt to keep our servers as secure as possible, including regular testing,' it said, adding it had repelled thousands of attacks over the past few years. 'But in the end, this was simply not enough.'

The Alberta, Canada-based firm, which said it is working with law enforcement agencies to trace the source of the hack, said it would return bitcoins stored offline, or in 'cold storage', to users.

Cold storage coins are held in computers not connected to the internet and therefore cannot be hacked.

Flexcoin said on February 25 it was not affected by Mt. Gox's closure. 'While the Mt. Gox closure is unfortunate, we at Flexcoin have not lost anything,' it had tweeted then.

Last week, prominent bitcoin supporters said the apparent collapse of the Tokyo-based Mt. Gox exchange was an isolated case of mismanagement that will weed out 'bad actors.'

But the setback raised serious questions about bitcoin's tenuous status and even more tenuous future. At least one supporter said the blow could be fatal to bitcoin's quest for acceptance by the public.

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Fluctuating: The current value of bitcoin on Wednesday 5 March currently stands at $654 - which is a rebound from a low of $470 last week after Mt. Gox announced its huge losses

The collapse followed the resignation Sunday of CEO Mark Karpeles, known as the 'French Marck Zuckerberg' from the board of the Bitcoin Foundation, a group seeking wider use of the exotic currency.

Mt. Gox's origins are rooted in fantasy instead of finance. The service originally specialized in trading colorful cards featuring mythical wizards and derives its name from a game. The initials stand for, 'Magic: The Gathering Online Exchange.'

Since its creation in 2009, bitcoin has become popular among tech enthusiasts, libertarians and risk-seeking investors because it allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties. Criminals like bitcoin for the same reasons.

For various technical reasons, it's hard to know just how many people worldwide own bitcoins, but the currency attracted outsize media attention and the fascination of millions as an increasing number of large retailers such as Overstock.com began to accept it.

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Bitcoin trader Kolin Burges stands in protest outside an office building housing Mt Gox in Tokyo after claiming he has lost nearly $300,000 in the company's collapse

Speculative investors have jumped into the bitcoin fray, too, sending the currency's value fluctuating wildly in recent months. In December, the value of a single bitcoin hit an all-time high of $1,200. In the aftermath of the Mt. Gox collapse last Tuesday, one bitcoin stood at around $470.

The price has now recovered to $650 dollars.

Central banks across the globe have been hesitant to recognize bitcoin as a form of money, and last Tuesday's vanishing act isn't helping.

On Friday, emerged from hiding and appeared before Japanese TV news cameras in Tokyo, bowing deeply for several minutes. It was the first time he'd broken cover since his exchange, Mt Gox, shut its website last Wednesday.

Major software flaws at Mt Gox allowed the huge theft to go unnoticed for years. As soon as Mt Gox was set up, it appears it fell victim to one of the largest bank heists ever with 1 out of every 20 Bitcoins in the world vanishing.

'I am sorry for the troubles I have caused all the people,' Karpeles said in Japanese at a Tokyo court.

He offered little comfort to thousands of customers facing huge losses when he said of the money: ‘Well, technically speaking it’s not lost just yet, just temporarily unavailable'.

Kyodo News said debts at Mt Gox totalled more than 6.5 billion yen ($65 million), surpassing its assets.

The loss is a giant setback to the currency's image because its backers have promoted Bitcoin as safe from counterfeit and theft.

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Central bankers around the world have warned about the virtual currency bitcoin. Prices have fluctuated as more merchants accept it as payment and investors are pouring money into new bitcoin-related ventures despite increasing high profile exchange thefts

Karpeles and his staff have faced protests outside their offices and the CEO has personally faced death threats.

The threats were driven by fears he could have even run off with the money as he had made no public appearance since the exchange shut down.

One user wrote on a Bitcoin forum 'pay to have Mark Karpeles killed'. Another wrote 'Open Letter to Mark Karpeles: You are a Dead Man'. Both posts have been deleted.

Paul Avel, who knew Karpeles when he was a pupil at the Claude Bernard Lycee, in Paris, said: ‘Mark was a very straight guy – brilliant at what he did, and always wanting to be the best,’

Mr Avel, added: ‘Mark always dreamed of being the French Mark Zuckerberg. He spent all his spare time locked away in his room working on new programmes.

‘The guy’s a genius, but kind with it. He’s a gentle lad – there’s no way he’d do anything wrong on purpose.’

ECHOES OF ANOTHER SUSPICIOUS AMERICAN SUICIDE IN SINGAPORE: THE MYSTERIOUS DEATH OF SHANE TODD

In June of last year, American engineer, Shane Todd, 31, was found dead in his Singapore apartment in mysterious circumstances.

Authorities in Singapore ruled that Todd committed suicide but his family believe that he was murdered because of research into sensitive technology.

Todd's parents have said they believe he may have been murdered over his research in the U.S. into material used to make heat-resistant semiconductors, a technology with both civilian and military applications.

They said they believed the evidence of suicide was faked and that officials had not followed protocol in the investigation.

His parents alluded to corporate espionage and said documents he had backed up from his work computer included a draft of a project outline between Singapore's Institute of Microelectronics - Shane Todd's former employer - and Chinese telecom giant Huawei on the development of a device that utilized gallium nitride.

The heat-resistant material has civilian uses in products like LED screens and cellphone towers, and military applications possibly for radar and satellite systems.

Mr Karpeles, who was born in Dijon, eastern France, but moved to Paris when he was a teenager, describes himself on his LinkedIn profile as a ‘technical geek’.

He arrived in Japan in June 2009 as a 23-year-old with only his hard drives and Tibane and immediately rode the wave of popularity surging around Bitcoin.

When he moved to Tokyo full time in 2009, and posted another blog entry saying: ‘I do computer-related work (a programmer); my goal is world domination.’

Japan's financial regulators have been reluctant to intervene in the Mt Gox situation, saying they don't have jurisdiction over something that's not a real currency.

They pointed to the Consumer Affairs Agency, which deals with product safety, as one possible place where disgruntled users may go for help.

The agency's minister Masako Mori urged extreme caution about using or investing in Bitcoins.

The agency has been deluged with calls about Bitcoins since earlier this year.

'We're at a loss for how to help them,' said Yuko Otsuki, who works in the agency's counselling department.

• If you or anyone you know is considering suicide, call the National Suicide Prevention Hotline at 1-800-273-8255
  
• For confidential support on suicide matters call the Samaritans on 08457 90 90 90 or visit a local Samaritans branch, see www.samaritans.org for details
  

[silverpig]

Sure it does, read the article.

It said they put money away every week. They didn't put $35 away a week, every week.

[Offensive Threat]

Well it appears the MtGox guys werent on the level about the disappearance of all that virtual currency after all. And it took the guys who hacked them to bring it to light. Yeah, I want to get into this type of investing. Its so solid.

The story http://gigaom.com/20...ealing-malware/

[silverpig]

Well it appears the MtGox guys werent on the level about the disappearance of all that virtual currency after all. And it took the guys who hacked them to bring it to light. Yeah, I want to get into this type of investing. Its so solid.

The story http://gigaom.com/20...ealing-malware/

Again, nothing to do with the currency itself. This is the same as saying you don't want to deal with dollars because of ponzi schemes, drug lords, retirement scams against the elderly...

[Papayas]

Again, nothing to do with the currency itself. This is the same as saying you don't want to deal with dollars because of ponzi schemes, drug lords, retirement scams against the elderly...

it has everything to do with the currency itself. There is no regulations to stop websites doing the same thing like Mt.Gox did, and the currency's value is too unstable to be a good choice of investment because of how easy it is for people to manipulate its value.

And please do not use the "Bitcoin is just a currency, not an investment." type of bull. People buy bitcoins becuase they hope their investment will magically double or times by 10 in a year like it did when was just started. People call it a Ponzi Scheme because only few people made that much profit at the begining and most of them are the ones controlling the virtual currency. They use this aspect to lure people, such as yourself, to join the game because everyone will be a winner. Now Tell me this isn't a ponzi scheme.

just watch the price of bitcoin, it will be bump up again on purpose, then the players will come up with some news to crash the market so they can restock in low price. This had been repeating for quite many tiems and yet people will always fall back into it until they have nothing left.

Telling people Bitcoin is a good investment is like tellign people to move to a new country without laws because the usa government is corrupted. This is insane.

[ronthecivil]

It said they put money away every week. They didn't put $35 away a week, every week.

Well it does say that they had 85k in cash which is a good indication they are financially illiterate ( a common occurance).

[ronthecivil]

Well it appears the MtGox guys werent on the level about the disappearance of all that virtual currency after all. And it took the guys who hacked them to bring it to light. Yeah, I want to get into this type of investing. Its so solid.

The story http://gigaom.com/20...ealing-malware/

If it's just another form of currency (lol) it's still a pretty lousy way to invest. Call me crazy but I think it's better to invest in things that actually produce something tangilble to people or provide some sort of service. Bitcoins are like storing money in your matress but with shockingly greater risk of it randomly disappearing one day....

[mdehaan]

It said they put money away every week. They didn't put $35 away a week, every week.

Ok you pick the number. What difference does it make?

My original comment was 'the equivalent of $35 per week'. Whether it was $100 one week and $0 the next doesn't matter.

[silverpig]

it has everything to do with the currency itself. There is no regulations to stop websites doing the same thing like Mt.Gox did, and the currency's value is too unstable to be a good choice of investment because of how easy it is for people to manipulate its value.

And please do not use the "Bitcoin is just a currency, not an investment." type of bull. People buy bitcoins becuase they hope their investment will magically double or times by 10 in a year like it did when was just started. People call it a Ponzi Scheme because only few people made that much profit at the begining and most of them are the ones controlling the virtual currency. They use this aspect to lure people, such as yourself, to join the game because everyone will be a winner. Now Tell me this isn't a ponzi scheme.

just watch the price of bitcoin, it will be bump up again on purpose, then the players will come up with some news to crash the market so they can restock in low price. This had been repeating for quite many tiems and yet people will always fall back into it until they have nothing left.

Telling people Bitcoin is a good investment is like tellign people to move to a new country without laws because the usa government is corrupted. This is insane.

No, it doesn't have anything to do with the currency itself.

There are regulations to stop Mt Gox from doing what it did.

Anything can be used as an investment. The largest trading market in the world is the forex market. This is nothing but currency trading, and it dwarfs all stock markets combined.

No one who knows anything about how bitcoin works is calling it a ponzi scheme. The value of bitcoin isn't in making you rich later if you buy in now. It's that it actually has utility as a real currency.

The market for bitcoin is volatile not because of "the players" (whoever those are), but because volume is still low. When trading volume is low, and big news comes out (such as China banning BTC exchanges, then re-allowing them), removing or adding significant demand to the market, you see huge price swings because it makes up a significant portion of trading volume.

Go buy $1B in bitcoins. You'll see the price spike from $600/BTC to oh... $6000/BTC (estimating there).

Now go buy $1B in USD. You might bump the value of the USD a few fractions of a penny, but that's it.

BTC can be a good investment if you are able to handle the volatility. In fact, if you want to make money, the easiest way to do it is in a security that is predictably highly volatile. But that's not what I've been saying. BTC as a currency has its merits. Mt Gox failing as an exchange is completely independent of whether or not BTC is a viable currency.

[silverpig]

Ok you pick the number. What difference does it make?

My original comment was 'the equivalent of $35 per week'. Whether it was $100 one week and $0 the next doesn't matter.

That's fair. It doesn't really matter.

[Lancaster]

An alternative storage of value is always a good thing. Gold, jewelry, real estate, equitable position in a stable company, etc.... those are great choices to not holding your money directly in fiat currency.

Bitcoins on the other hand.... there's nothing tangible to back it up. While the USD is still flawed, in theory it's guaranteed by a legitimate government with actual assets, something bitcoin can't claim.

Volatility should not be a reason to dive into bitcoins either. If you're just speculating (gambling), there are other better avenues to explore. Penny stocks, derivatives, leveraged etf's, angel investing... heck, even a casino/betting might give you better odds.

[Papayas]

No, it doesn't have anything to do with the currency itself.

There are regulations to stop Mt Gox from doing what it did.

Anything can be used as an investment. The largest trading market in the world is the forex market. This is nothing but currency trading, and it dwarfs all stock markets combined.

No one who knows anything about how bitcoin works is calling it a ponzi scheme. The value of bitcoin isn't in making you rich later if you buy in now. It's that it actually has utility as a real currency.

The market for bitcoin is volatile not because of "the players" (whoever those are), but because volume is still low. When trading volume is low, and big news comes out (such as China banning BTC exchanges, then re-allowing them), removing or adding significant demand to the market, you see huge price swings because it makes up a significant portion of trading volume.

Go buy $1B in bitcoins. You'll see the price spike from $600/BTC to oh... $6000/BTC (estimating there).

Now go buy $1B in USD. You might bump the value of the USD a few fractions of a penny, but that's it.

BTC can be a good investment if you are able to handle the volatility. In fact, if you want to make money, the easiest way to do it is in a security that is predictably highly volatile. But that's not what I've been saying. BTC as a currency has its merits. Mt Gox failing as an exchange is completely independent of whether or not BTC is a viable currency.

lol

first of all, list the "regulation" that prevented Mt.Gox from doing what it did, and we will continue the topic...

i mean holy cow, even typing that sentence above is so contradictory I will need to rest my brain after typing that

[nuckin_futz]

No, it doesn't have anything to do with the currency itself.

There are regulations to stop Mt Gox from doing what it did.

Anything can be used as an investment. The largest trading market in the world is the forex market. This is nothing but currency trading, and it dwarfs all stock markets combined.

No one who knows anything about how bitcoin works is calling it a ponzi scheme. The value of bitcoin isn't in making you rich later if you buy in now. It's that it actually has utility as a real currency.

The market for bitcoin is volatile not because of "the players" (whoever those are), but because volume is still low. When trading volume is low, and big news comes out (such as China banning BTC exchanges, then re-allowing them), removing or adding significant demand to the market, you see huge price swings because it makes up a significant portion of trading volume.

Go buy $1B in bitcoins. You'll see the price spike from $600/BTC to oh... $6000/BTC (estimating there).

Now go buy $1B in USD. You might bump the value of the USD a few fractions of a penny, but that's it.

BTC can be a good investment if you are able to handle the volatility. In fact, if you want to make money, the easiest way to do it is in a security that is predictably highly volatile. But that's not what I've been saying. BTC as a currency has its merits. Mt Gox failing as an exchange is completely independent of whether or not BTC is a viable currency.

As Papayas stated there are no regulations to stop MTGox from doing what it did. It is a completely unregulated industry.

Today FINRA issued an alert regarding BTC. It can be found here: http://www.finra.org...ndScams/P456458

All the feds can do is charge them for violating existing laws such as fraud or charge them with theft, or wire fraud etc. They cannot stop them from operating the exchanges.

If you lost money in MTGox you're only recourse is to sue civilly in Japanese court. Good luck with that.

Trading volume in BTC is low for a reason. There is only a certain amount of BTC. Unlike the USD which is created endlessly. Unless more BTC is created the volume will never increase much and it will always be thinly traded and volatile. However, creating more will dilute the value of each coin. It would be wise to split the coins ala a stock split but since it's unregulated you'll never see that happen as there's "too many cooks"/exchanges so to speak to agree on anything.

As for it having it's merits an a currency. Warren Buffet who is a pretty knowledgeable guy had this to say about BTC......

"NEW YORK (MarketWatch) -- Bitcoin is "not a currency" because it doesn't meet the criteria of a currency, including being a store of value, said Berkshire Hathaway Chairman and CEO Warren Buffett. In an interview on CNBC Monday, the American business magnate said that he would not be surprised if bitcoin is not around in 10 or 20 years because it is used as a speculative bet. The price of bitcoin is inevitably based on the value of the dollar he said, which means that it is not a currency in and of itself"

http://www.marketwat...ency-2014-03-03

Nouriel Roubini was the latest to take a dump on BTC. ..........

"Roubini tweets dismissively of bitcoin, calls it Ponzi scheme" .........

"New York University professor of economics and markets guru Nouriel Roubini has whipped up a Twitter frenzy aimed at bitcoin and its advocates. Roubini’s consistently bearish economic views have earned him the nickname “Dr. Doom” but he is not a man to be ignored. In early 2007, Roubini accurately predicted that a collapsing US housing market would trigger a worldwide recession.

On Sunday, the guru tweeted that “apart from a base 4 [for] criminal activities, bitcoin is not a currency as it is not a unit of account or a means of payments or store of value”. He elaborated first that the self-styled crypto-currency is not a unit of account because prices of goods and services are not first set in bitcoins, nor they would ever be.

Taking the argument further, Roubini asserted that bitcoin isn’t a means of payment because there are only a handful of transactions with the e-currency. “And given its volatility all who accept it convert it right back into $/€/¥”, he pointed out. Any retailer accepting BTC in payment is likely to convert them immediately into traditional fiat currencies since the huge price volatility of bitcoin implies equally sizeable market risk.

Rounding off his argument, Roubini said that bitcoin isn't a store of value because comparatively little wealth is currently held in the product and it has no asset backing. And the volatility of bitcoin’s exchange rate with the USD makes it “a lousy store of value”.

http://invezz.com/ne...it-ponzi-scheme

Edited March 12, 2014 by nuckin_futz

[silverpig]

lol

first of all, list the "regulation" that prevented Mt.Gox from doing what it did, and we will continue the topic...

i mean holy cow, even typing that sentence above is so contradictory I will need to rest my brain after typing that

Before we continue, please tell us what you think Mt God did that was:

1. Wrong AND

2.Could have been prevented by regulation AND

3. Is inherent to bitcoin

Just so we are on the same page here

[silverpig]

As Papayas stated there are no regulations to stop MTGox from doing what it did. It is a completely unregulated industry.

First, it is not completely unregulated. As you mention below, Mt Gox had to comply with standard fraud, money laundering, and theft laws. In fact, Mt Gox registered as an exchange to comply with these laws.

So no, it isn't completely unregulated.

Today FINRA issued an alert regarding BTC. It can be found here: http://www.finra.org...ndScams/P456458

Yes, what is your point? They have alerts on all sorts of topics, from ETFs and mutual funds, to stocks and bonds, to text message based pump and dump schemes on penny stocks.

All the feds can do is charge them for violating existing laws such as fraud or charge them with theft, or wire fraud etc. They cannot stop them from operating the exchanges.

Right. And what's wrong with that? Operating an exchange isn't illegal. Forex is the largest market in the world, by far.

If you lost money in MTGox you're only recourse is to sue civilly in Japanese court. Good luck with that.

If you lost money in a Japanese penny stock...

If you're trying to say your BTC weren't covered by CDIC or FDIC insurance, that's because Mt Gox wasn't a chartered bank. It was an exchange. If your investment in Zimbabwean dollars goes tits up, you can try complaining to the Zimbabwean government, but that's about as far as you'll get.

Trading volume in BTC is low for a reason. There is only a certain amount of BTC. Unlike the USD which is created endlessly. Unless more BTC is created the volume will never increase much and it will always be thinly traded and volatile. However, creating more will dilute the value of each coin. It would be wise to split the coins ala a stock split but since it's unregulated you'll never see that happen as there's "too many cooks"/exchanges so to speak to agree on anything.

Okay, you should read more about how bitcoin works. New coins are being created all the time. This is what "mining" is. There is a rate at which they are being created, and there is a maximum number that there will ever be: 21 million. That said, they are divisible up to 8 (I think) decimal points, so you can have tiny fractions of a dollar if you want. As demand grows, people will talk about millionths of a bitcoin instead of tenths of a bitcoin. Of course, this is a property of bitcoins specifically - other crypto-currencies don't necessarily have this upper limit built in.

Also, the reason there isn't much volume in BTC has nothing to do with the number of BTC there are. You could trade $1T in BTC tomorrow if you wanted. You'd of course be disrupting the market significantly, would need $1T to buy the BTC, and would be setting the price of BTC worldwide, but you could do it.

Let me give you a real world example. Back when the rain storms hit Vancouver and caused all that "turbidity" in the reservoirs, people were looking to buy mass quantities of bottled water. You could go to Safeway and get a 4L jug of water for $3, but once those ran out, you'd be buying Evian for $5/L. Once that ran out, I witnessed a guy come in to a Starbucks and buy 2 flats of their water - I think he got 8L of water for $120. The price of water in Vancouver varied from free (in some places) to 75c/L to $15/L. This is because the spike in demand for bottled water was larger than the standard base demand.

The way a market works is can submit buy and sell orders of a security, and the exchange will post those buy and sell orders and attempt to match them. Let's say a stock is trading at $10. Let's say there are 3 people willing to buy the stock, and they submit buy orders for 10 shares each at $9.90, $9.80, and $9.70. Let's also say there are 5 people willing to sell the stock, 10 shares each, at $10.10, $10.20, $10.30, $10.70, and $15.00. To say "a stock is trading at $10" is to mean that the last trade that closed happened at a price of $10. There are unfilled orders at other prices because they haven't been matched yet.

Volatility is a measure of how much the price of the last trade fluctuates. So let's say the next orders that are posted are:

BUY 10 $10.20

BUY 10 $10.10

SELL 10 $10.00

BUY 50 $ANY

The first order will clear at $10.10 for 10 shares. The second order won't clear. The third order won't clear, and the 4th order will clear, buying 10 shares at $10.00, 10 at $10.20, 10 at $10.30, 10 at $10.70, and 10 at $15.00. The stock will then be trading at $15.00.

This happened because a big investor came in with a large order that was able to clear all of the existing sell orders. Now, for a stock with high trading volume, there will be hundreds or thousands of shares sitting in buy/sell orders just pennies or nickels off of the last traded price. Buying $100k of a well traded stock will clear a bunch of sell orders, but won't make a dent in the overall queue of orders. Dropping a few billion will (hence why we see huge price movements during takeover offers).

Now, how does this matter with BTC? Well, it doesn't matter how many BTC there are, what matters is how many buy/sell orders are in the queue, what their sizes are, and how big the new orders are in relation to the value of the queue. There could be trillions of BTC and this wouldn't change.

As for it having it's merits an a currency. Warren Buffet who is a pretty knowledgeable guy had this to say about BTC......

"NEW YORK (MarketWatch) -- Bitcoin is "not a currency" because it doesn't meet the criteria of a currency, including being a store of value, said Berkshire Hathaway Chairman and CEO Warren Buffett. In an interview on CNBC Monday, the American business magnate said that he would not be surprised if bitcoin is not around in 10 or 20 years because it is used as a speculative bet. The price of bitcoin is inevitably based on the value of the dollar he said, which means that it is not a currency in and of itself"

Buffett is famous for only in "investing in what he knows and understands" - things like railways. There are a ton of things he doesn't understand, and he fully admits it. That doesn't mean they aren't good investments (i.e., tech stocks).

http://www.marketwat...ency-2014-03-03

Nouriel Roubini was the latest to take a dump on BTC. ..........

"Roubini tweets dismissively of bitcoin, calls it Ponzi scheme" .........

"New York University professor of economics and markets guru Nouriel Roubini has whipped up a Twitter frenzy aimed at bitcoin and its advocates. Roubini’s consistently bearish economic views have earned him the nickname “Dr. Doom” but he is not a man to be ignored. In early 2007, Roubini accurately predicted that a collapsing US housing market would trigger a worldwide recession.

On Sunday, the guru tweeted that “apart from a base 4 [for] criminal activities, bitcoin is not a currency as it is not a unit of account or a means of payments or store of value”. He elaborated first that the self-styled crypto-currency is not a unit of account because prices of goods and services are not first set in bitcoins, nor they would ever be.

Taking the argument further, Roubini asserted that bitcoin isn’t a means of payment because there are only a handful of transactions with the e-currency. “And given its volatility all who accept it convert it right back into $/€/¥”, he pointed out. Any retailer accepting BTC in payment is likely to convert them immediately into traditional fiat currencies since the huge price volatility of bitcoin implies equally sizeable market risk.

Rounding off his argument, Roubini said that bitcoin isn't a store of value because comparatively little wealth is currently held in the product and it has no asset backing. And the volatility of bitcoin’s exchange rate with the USD makes it “a lousy store of value”.

http://invezz.com/ne...it-ponzi-scheme

As for Roubini, well, the experts of the day back in FDR's time thought it was economic suicide to decouple the USD from gold. They were wrong.

But again, this is all beside the point. We are talking about whether or not Mt Gox's implosion means that BTC isn't viable. It doesn't. Whether BTC (or some other crypto-currency) becomes widespread is independent of what happened at Mt Gox.

Roubini is also just flat wrong about it being a Ponzi scheme. It just isn't, and calling it so doesn't make it so.

Also, just for added thought: NY state just today started accepting applications for licenses for BTC exchanges. I think the procedure is you apply, and in the fall they will grant you a license and tell you what rules you have to play by.

[mdehaan]

First, it is not completely unregulated. As you mention below, Mt Gox had to comply with standard fraud, money laundering, and theft laws. In fact, Mt Gox registered as an exchange to comply with these laws.

So no, it isn't completely unregulated.

Yes, what is your point? They have alerts on all sorts of topics, from ETFs and mutual funds, to stocks and bonds, to text message based pump and dump schemes on penny stocks.

Right. And what's wrong with that? Operating an exchange isn't illegal. Forex is the largest market in the world, by far.

If you lost money in a Japanese penny stock...

If you're trying to say your BTC weren't covered by CDIC or FDIC insurance, that's because Mt Gox wasn't a chartered bank. It was an exchange. If your investment in Zimbabwean dollars goes tits up, you can try complaining to the Zimbabwean government, but that's about as far as you'll get.

Okay, you should read more about how bitcoin works. New coins are being created all the time. This is what "mining" is. There is a rate at which they are being created, and there is a maximum number that there will ever be: 21 million. That said, they are divisible up to 8 (I think) decimal points, so you can have tiny fractions of a dollar if you want. As demand grows, people will talk about millionths of a bitcoin instead of tenths of a bitcoin. Of course, this is a property of bitcoins specifically - other crypto-currencies don't necessarily have this upper limit built in.

Also, the reason there isn't much volume in BTC has nothing to do with the number of BTC there are. You could trade $1T in BTC tomorrow if you wanted. You'd of course be disrupting the market significantly, would need $1T to buy the BTC, and would be setting the price of BTC worldwide, but you could do it.

Let me give you a real world example. Back when the rain storms hit Vancouver and caused all that "turbidity" in the reservoirs, people were looking to buy mass quantities of bottled water. You could go to Safeway and get a 4L jug of water for $3, but once those ran out, you'd be buying Evian for $5/L. Once that ran out, I witnessed a guy come in to a Starbucks and buy 2 flats of their water - I think he got 8L of water for $120. The price of water in Vancouver varied from free (in some places) to 75c/L to $15/L. This is because the spike in demand for bottled water was larger than the standard base demand.

The way a market works is can submit buy and sell orders of a security, and the exchange will post those buy and sell orders and attempt to match them. Let's say a stock is trading at $10. Let's say there are 3 people willing to buy the stock, and they submit buy orders for 10 shares each at $9.90, $9.80, and $9.70. Let's also say there are 5 people willing to sell the stock, 10 shares each, at $10.10, $10.20, $10.30, $10.70, and $15.00. To say "a stock is trading at $10" is to mean that the last trade that closed happened at a price of $10. There are unfilled orders at other prices because they haven't been matched yet.

Volatility is a measure of how much the price of the last trade fluctuates. So let's say the next orders that are posted are:

BUY 10 $10.20

BUY 10 $10.10

SELL 10 $10.00

BUY 50 $ANY

The first order will clear at $10.10 for 10 shares. The second order won't clear. The third order won't clear, and the 4th order will clear, buying 10 shares at $10.00, 10 at $10.20, 10 at $10.30, 10 at $10.70, and 10 at $15.00. The stock will then be trading at $15.00.

This happened because a big investor came in with a large order that was able to clear all of the existing sell orders. Now, for a stock with high trading volume, there will be hundreds or thousands of shares sitting in buy/sell orders just pennies or nickels off of the last traded price. Buying $100k of a well traded stock will clear a bunch of sell orders, but won't make a dent in the overall queue of orders. Dropping a few billion will (hence why we see huge price movements during takeover offers).

Now, how does this matter with BTC? Well, it doesn't matter how many BTC there are, what matters is how many buy/sell orders are in the queue, what their sizes are, and how big the new orders are in relation to the value of the queue. There could be trillions of BTC and this wouldn't change.

Buffett is famous for only in "investing in what he knows and understands" - things like railways. There are a ton of things he doesn't understand, and he fully admits it. That doesn't mean they aren't good investments (i.e., tech stocks).

As for Roubini, well, the experts of the day back in FDR's time thought it was economic suicide to decouple the USD from gold. They were wrong.

But again, this is all beside the point. We are talking about whether or not Mt Gox's implosion means that BTC isn't viable. It doesn't. Whether BTC (or some other crypto-currency) becomes widespread is independent of what happened at Mt Gox.

Roubini is also just flat wrong about it being a Ponzi scheme. It just isn't, and calling it so doesn't make it so.

Also, just for added thought: NY state just today started accepting applications for licenses for BTC exchanges. I think the procedure is you apply, and in the fall they will grant you a license and tell you what rules you have to play by.

Please explain..

[silverpig]

Please explain..

Before / during the great depression, the US was on the gold standard. That is, you could go to a bank with your paper money and exchange it for gold at a set price (I think it was just over $20/oz). The banks HAD to have this gold - it was their guarantee that the paper money was worth something real. In fact, that's what money actually was - a claim on a deposit of gold in a bank.

This caused a lot of problems in the financial system (I won't explain them all - it would take too long and there are many better articles out there), so FDR decided to drop the gold standard.

This caused the economists of the time to basically go apecrap. The assistant secretary of the treasury resigned.

Though some contemporary critics of Roosevelt never forgave him -- gold retained an alchemical power to turn nonsense into received wisdom -- others eventually endorsed his policy. The banker James Warburg initially complained that “sacred cows were being slaughtered,” but later reversed himself, as he said in an oral history he gave decades later. “I had to learn through being wrong that none of these things worked by the book,” he said. “A man can do idiotic things, but if the man in the street thinks the fellow is all right and going in the right direction, they don’t notice the idiotic things,” Warburg reflected. “So all you do is scare a bunch of orthodox economists and bankers, and they’re scared anyway, so it doesn’t make any difference.”

The recovery of the US economy started almost immediately.

The fear was that you were converting the monetary system from something real (gold), to something that had no inherent value (paper). People wanted gold, prices were set in dollars backed by gold, and if things went nuts, you could always go to the bank and take out your gold.

This sounds like a lot of the arguments against bitcoin right now. Prices set in dollars, BTC always being converted to dollars, what BTC needs is a set exchange rate so that it is linked to dollars. These are all the exact same arguments people were making against the dollar back in 1933.

Now however, the vast majority of economists think going back to the gold standard is a stupid idea.

[mdehaan]

Before / during the great depression, the US was on the gold standard. That is, you could go to a bank with your paper money and exchange it for gold at a set price (I think it was just over $20/oz). The banks HAD to have this gold - it was their guarantee that the paper money was worth something real. In fact, that's what money actually was - a claim on a deposit of gold in a bank.

This caused a lot of problems in the financial system (I won't explain them all - it would take too long and there are many better articles out there), so FDR decided to drop the gold standard.

This caused the economists of the time to basically go apecrap. The assistant secretary of the treasury resigned.

The recovery of the US economy started almost immediately.

The fear was that you were converting the monetary system from something real (gold), to something that had no inherent value (paper). People wanted gold, prices were set in dollars backed by gold, and if things went nuts, you could always go to the bank and take out your gold.

This sounds like a lot of the arguments against bitcoin right now. Prices set in dollars, BTC always being converted to dollars, what BTC needs is a set exchange rate so that it is linked to dollars. These are all the exact same arguments people were making against the dollar back in 1933.

Now however, the vast majority of economists think going back to the gold standard is a stupid idea.

I don't want to hijack the bitcoin thread, but your view of the gold standard is a little short sighted.

We can get into it in a PM or a different thread.