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40% of Bitcoin Exchanges Fail; only 30% of those refund your Bitcoins...
Posted on 4/28/13 at 12:26 pm
Posted on 4/28/13 at 12:26 pm
LINK /
quote:
An extra risk for customers is losing their money from exchanges closing. Of the 18 closed exchanges, there was evidence that only six reimbursed their customers. Five did not, while there was not evidence enough to make a judgement regarding the remaining seven.
2
Posted on 4/28/13 at 1:21 pm to GFunk
But that can't happen, the technology is too advanced. frickin Statist propaganda 
Posted on 4/28/13 at 1:46 pm to Vols&Shaft83
quote:This is not a technological issue. This is a AnCap issue. These unregulated operations failed from their own either incompetence or due to malfeasance by the operators. Those who suffered losses can only hope for assistance from government if they expect restitution.
But that can't happen, the technology is too advanced. frickin Statist propaganda
Posted on 4/28/13 at 1:52 pm to Poodlebrain
quote:
This is a AnCap issue.
quote:
Those who suffered losses can only hope for assistance from government if they expect restitution.
The definition of irony
In Wiki, Gmorgan and gizmoflak's (not sure what his ideology is) defense, I believe they have all said that you should never trust an intermediary with your bitcoins.
But if everyone adheres to that, then we're back to the question of how in the hell this will ever function as a currency or an investment.
Posted on 4/28/13 at 4:20 pm to ZereauxSum
Posted on 4/28/13 at 6:01 pm to gizmoflak
In this article, he poses a hypothetical:
Then bases his solution on the opposite of his hypothetical:
Besides, isn't this just the introduction of a central bank that has zero authority or credibility? Bitcoin's value has always been 100% supply/demand. Now I'm supposed to believe a bunch of anonymous people when they tell me nothing is worth something?
quote:
but what if all the exchange markets are shut down?
Then bases his solution on the opposite of his hypothetical:
quote:
I have suggested that some entity, possibly the Bitcoin Foundation (and this can be done on a non-profit basis), make a market in bitcoin and broadcast a current price for bitcoin (a peg) that various exchanges and merchants can use as a benchmark.
quote:
maintaining this peg would require lots of buying and selling on the various exchanges to maintain an inventory (of bitcoin) that is necessary to maintain a peg
Besides, isn't this just the introduction of a central bank that has zero authority or credibility? Bitcoin's value has always been 100% supply/demand. Now I'm supposed to believe a bunch of anonymous people when they tell me nothing is worth something?
This post was edited on 4/28/13 at 6:02 pm
Posted on 4/28/13 at 6:24 pm to ZereauxSum
Maybe we should embrace the wonder currency of the future and start BitcoinDroppings.com (sorry Chicken) to create just such an exchange? There are all sorts of sources of revenue we could generate, not just trading fees. We could sell advertising to merchants who accept Bitcoins. We could mine data from visitors to the website. We could even get lucky and mine a few Bitcoins. Then when we get tired of the venture, or filthy rich enough, we can just pull a disappearing act like 40% of our competitors.
Posted on 4/28/13 at 6:59 pm to Poodlebrain
I tried to get Russian to co-found an Ultra-Short Bitcoin ETF with me, he never got me to me though 
Posted on 4/29/13 at 7:28 am to GFunk
Posted on 4/29/13 at 8:53 am to LSURussian
quote:
Where is Wiki to assuage our fears?
Posted on 4/29/13 at 10:49 am to Captain Ron
He will tell us that the exchange operators are not part of the Bitcoin network. They are auxillary service providers who seek to capitalize off of Bitcoin users. The Bitcoin community is not responsible for any misfeasance, or malfeasance, of these entities that could be symbiotic, but turn out to be parasitic. The real issue is whether he will admit the only method of finding out whether an entity is symbiotic, or parasitic, is by trial and error. And that exposes the users of Bitcoins to risks it they want to convert from other currencies to Bitcoins, or vice versa.
Posted on 4/29/13 at 12:05 pm to Poodlebrain
quote:
The Bitcoin community is not responsible for any misfeasance, or malfeasance, of these entities that could be symbiotic, but turn out to be parasitic.
I do agree with the proponents when they say the failure of exchanges has nothing to do with the integrity of the technology behind bitcoin, but it certainly has everything to do with the success or failure if bitcoin as a currency/asset class.
Posted on 4/29/13 at 12:24 pm to ZereauxSum
Bitcoin is the wild wild west
Some people will find gold. Many others will get eaten by wolves and die from typhoid.
Stability will take time to develop.
Meanwhile I'm gonna sit back in my comfy chair and
Some people will find gold. Many others will get eaten by wolves and die from typhoid.
Stability will take time to develop.
Meanwhile I'm gonna sit back in my comfy chair and
Posted on 4/29/13 at 12:26 pm to ZereauxSum
quote:Well put and I agree.
the failure of exchanges has nothing to do with the integrity of the technology behind bitcoin, but it certainly has everything to do with the success or failure if bitcoin as a currency/asset class.
Posted on 4/29/13 at 12:46 pm to LSURussian
Until Bitcoins are universally accepted there will need to be exchanges for conversion to and from other currencies. The Bitcoin community's desire for zero government oversight means unregulated exchanges will contine to exist, and prey upon Bitcoin users. Legitimate Bitcoin users will probably use regulated exchanges to eliminate the risk of malfeasance by the exchange operators, but there will be many Bitcoin users who patronize the unregulated exchanges.
I doubt Bitcoins survive that long though.
I doubt Bitcoins survive that long though.
Posted on 4/29/13 at 12:46 pm to ZereauxSum
quote:
I do agree with the proponents when they say the failure of exchanges has nothing to do with the integrity of the technology behind bitcoin
quote:
but it certainly has everything to do with the success or failure if bitcoin as a currency/asset class
Agreed. In the short term, bitcoin lives and dies by the exchanges.
However, I think some perspective and foresight is necessary here.
The early exchanges were mostly started by amateurs with little to no true corporate backing. They were often hastily built by amateur coders who had little knowledge of financial markets, etc. This has led to numerous problems, like lax security which exposes sites to hacking vulnerabilities.
We are now entering the second phase of bitcoin exchanges: Professional exchanges. There are exchanges being developed right now with solid corporate and VC backing, with the professional expertise that money brings. This is going to change the game and make it safer for more people to enter the bitcoin arena.
Posted on 4/29/13 at 12:48 pm to Poodlebrain
quote:
Legitimate Bitcoin users will probably use regulated exchanges to eliminate the risk of malfeasance by the exchange operators
yep!
Poodlebrain, you've been doing you're homework, haven't you? You certainly seem to be more and more educated on the topic as the weeks go on.
quote:
but there will be many Bitcoin users who patronize the unregulated exchanges.
Yep. And that's a risk they choose to take.
quote:
I doubt Bitcoins survive that long though.
Why do you feel that way?
Posted on 4/29/13 at 1:10 pm to WikiTiger
quote:
Why do you feel that way?
Don't want to put words in Poodle's mouth, but I think it all comes back to regulation as he said earlier.
I agree with you about the exchanges; amateur hour seems to be just about over and we should see more legit exchanges pop up. But without oversight, nothing will stop a major player from picking a side and manipulating the price in it's favor.
Posted on 4/29/13 at 1:29 pm to ZereauxSum
quote:
Don't want to put words in Poodle's mouth, but I think it all comes back to regulation as he said earlier.
I disagree that regulation will have any significant impact on crypto-currencies in the long term, but it may hamper its growth in the early stages.
Besides that, however, I think a good discussion to have is this:
What defines success for bitcoin? If it operates successfully for 10 years and then is replaced by one or more crypto-currencies that are better, does that mean bitcoin was a failure?
If it succeeds at opening the crypto-currency door, and leads to a long term change in the way humanity views money, is it successful even if it's a footnote of history?
To view it another way: Was the original incarnation of Napster a success or failure? After all, it did get shut down....but it also created a major paradigm shift and led to the develop of protocols like BitTorrent which are still going strong.
This post was edited on 4/29/13 at 1:30 pm
Posted on 4/29/13 at 2:26 pm to WikiTiger
For Bitcoins to succeed they need to be widely dispersed among tens of millions of users ready to use them without concern about exchange rates. Right now, and for the foreseeable future, most Bitcoin owners are more concerned with exchange rates than ability to spend Bitcoins. And ownership of Bitcoins are relatively concentrated. When you have douchebags like the Winklevoss brothers bragging about owning 11% of the existing Bitcoins you realize they are not holding the Bitcoins as an alternative form of currency. They are holding it as a commodity. It is safe to presume that many other Bitcoin owners have the same intentions.
Any event that causes a loss in confidence in Bitcoins as a commodity will be detrimental to Bitcoins' survival. I think the chances are that a catastrophic event will occur before Bitcoins become widely distributed among those who wish to use Bitcoins as currency rather than commodities.
Any event that causes a loss in confidence in Bitcoins as a commodity will be detrimental to Bitcoins' survival. I think the chances are that a catastrophic event will occur before Bitcoins become widely distributed among those who wish to use Bitcoins as currency rather than commodities.
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