Bitcoin Forum

UPDATE: I've bumped this thread in light of the recent events with Mt Gox which may catalyze the kind of draconian regulation we do not want. Now more than ever is the time for Bitcoin businesses to federate and set their own standards instead of a bureaucrats that have scant idea of what a Bitcoin truly is.
------------------

Let me start by saying I find the idea of regulating Bitcoin a tenuous one at best, but the biggest argument that the pro regulation crowd has in their favor is that it will afford Bitcoin greater legitimacy and accountability as it moves towards mainstream adoption. This may be all well and good, but the biggest problem I have is just who would be providing this legitimacy and accountability.

Already we are seeing pro crowd individuals and companies reaching out to government almost begging for Bitcoin regulation. They are convinced that the legitimacy that would come from it would better allow Bitcoin to spread and support whatever business model they happen to believe in as well as other social benefits to prevent the abuse of Bitcoin.

And they have a point.

There are specific issues around the use of Bitcoin that deserve an answer, things like the sale of child pornography that everyone would agree needs to be stamped out with extreme prejudice. Bitcoin itself is innocent in all this, it's purely a means to exchange value and no different to the dollar note in that regard but unfortunately these issues are going to be repeatedly raised by regulators and anti-bitcoin groups and used to beat Bitcoin over the head with to support their argument and goal of ultimately having Bitcoin banned or regulated into near uselessness.

This is not an ideal outcome, but the thing is if we look back in history something very similar has happened before.

I refer to the inception of the Comics Code Authority back in the 1950's. Have a look at the Wikipedia article about it if you want to know the details: http://en.wikipedia.org/wiki/Comics_Code_Authority (http://en.wikipedia.org/wiki/Comics_Code_Authority)

In short, back in the early days of the comic book industry there were public concerns about the sexual and violent content of comic books and the influence they had on young people. This "wild west" of comic publishing led to - like Bitcoin - Senate inquiries - which gave real concern from publishers that they would become subject to draconian regulation that went far beyond banning the areas of concern but severely limit the creativity and stories that could be told. As a result of this the comic book publishing industry pre-empted laws and regulation by creating a self-regulating code that was run by the comic publishing community and set the standard by which stories and comics would be produced. This body became known as the Comics Code Authority and provided a means for the publishers to deal with the worst of the rogue publishing elements and blunting the argument of the biggest anti-comic proponents. The code remained in place for several decades, but eventually a shift in community attitudes led to it's abandonment by most publishers a decade ago.

So what does this mean for Bitcoin?

Perhaps we should let history be our guide and look at creating a similar institution - a Bitcoin Code Authority under the trusted auspices of say the Bitcoin Foundation. If a common code that address the worst negative criticisms against Bitcoin could be put into play with a seal or badge that business display on their sites to indicate voluntary adherence to the code this may go a long way towards blunting the biggest arguments of Bitcoin's biggest critics and allow the community to retain control of the situation and avoid the risk of becoming over-regulated by government.

I am not advocating this lightly and while it isn't designed to address person-to-person transaction issues it would go a long way to protecting the embryonic Bitcoin marketplace as it develops. And like the history of comic books - one day when the world is more enlightened and used to cryptocurrency we may be able to quietly do away with it completely.

Thoughts everyone?

The ease at which wallets can be hacked and or stolen as apposed to cracking the bitcoin algorithm, is a disparity yet to be addressed.  If Bitcoins were never sold but belong permanently to individuals, and enjoined by a genome dna code,  they might in the longterm be used as chattels for cash rather than sold, Providing the value of btc rose at a greater rate than the amount chattelled. 

The uncrackable nature of bitcoins is only going to last a very short amount of time.  looksee: http://www.foxnews.com/tech/2012/04/26/tiny-crystal-may-hold-key-to-future-computers/  read it and weep.  This 300 atom * 1 atom will solve and crack the bitcoin alg, in seconds once it is set up and aimed at the naughty bitcoin opps.  They have 9 months start so no need to hold your breath...it's moments away.

Wonderful; we'll finally be able to fool people into thinking Bitcoin isn't being used for nefarious purposes.  Even when it is.

http://bitcoinism.blogspot.com/2013/06/i-love-smell-of-crony-capitalism-in.html

I've edited and bumped my original post follow the events of the past week with MtGox. There is a perfect storm forming in the path of Bitcoin with mainstream media just beginning to report on the situation, we need to be prepared for the worst.

$400mil potential theft vs. the prospect of breaking your pinky swear to the Bitcoin Foundation is not really going to cut it as a code of laws in my opinion.

I'd rather see how it goes with the exchanges not having access to the private keys first.

But even the kind of self regulation that says to keep all fiat and btc off the exchange until it absolutely needs to be there would have saved a lot of people a lot of money. I know it's been repeated too much but the thing is it's actually true.

One would hope the industry comes up with a set of rules that can prevent a situation like this again. Like setting limits on how many BTC can be stored in a single wallet, implementing M of N keys where the authority holds a shared key in trust, regularly signing public audits using their keys as proof of control.

This is all about putting good Bitcoin business practice in place and making it as publicly accountable and verifiable as the blockchain itself is.

This bank was regulated and still lost over 100 billion $:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372/RBS-has-lost-all-the-46bn-pumped-in-by-the-taxpayer.html (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372/RBS-has-lost-all-the-46bn-pumped-in-by-the-taxpayer.html)
Some people are stealing money regulated.

The CryptoCurrency Council, the council would design regulations that would be voluntarily adopted by those who seek certification from the CCC (cryptocurrency community council).

The council would essentially serve as an example and vehicle for integrity in the cryptocurrency industry.  

Yes it is centralized, however it would have a decentralized feel since it would be made up of people from all over the world, and the majority of decisions would be determined by vote

In this way the CCC can experience and recommend thought their certification process good businesses (and pros), so that all cc users can have easier and safer way do do cc business.

I don't know about the UK but US regulated banks are insured up to $100K+ per customer per bank, I think the rate has increased

if that was the case for the Mt Gox situation most users would have been covered.

that individualistic mentality isn't the key in a community driven industry and community

I agree that there needs to be a cryptocurrency school, and perhaps even a cryptocurrency university, complete with cc professors, providing cc degree, and certifications however an endeavor such as bitcoin which is just one part of a much larger system of coins will need specialization in order to maximize resources.

It's ridiculous to need to have 3 computers, cold and hot wallet storage, 2 level verification on every account, because they system is so corrupt.  The system itself needs more security, accountability, self-regulation, verification, validation, valuation, certification, assurances, insurances, guarantees, and integrity. 

And it will get all those things.

No new organization will be required to do that, however. Just code.

Yes, it is the TIME !

And I want to be vice-president of this Bitcoin Code Authority.
Vote for me !

bounty: 1 DOGE per 1 vot !  I will open soon even a faucet on my webpage !

This is fine provided you cut the centralisation and authority crap out.

Let us have many different groups that offer to check Bitcoin sites and hand out seals of approval.  A group with no reputation will have to earn it by repeatedly making good calls on the reliability of Bitcoin sites.  A group with a strong reputation can charge sites that want to be checked and try to earn its approval.

The only regulation that would make sense would be some kind of self regulation based on math and p2p networking.
Until someone finds a way to make that happen, we got nothing.

Seriously, the regulation people are talking about belongs to the old world. It has no value when it comes to crypto currencies.

2009 market cap $0
2013 market cap $10B

2009 users 0
2013 users 700K

there is absolutely no reasonable reason why it is not already in place, how much money needs to be "lost" in order to have put a lock on the front door?

it's precisely because there was no regulation, no security, and no lock on the door, that thieves on all levels saw it as an open invitation to come in and plunder.

Code is good, but it still can be manipulated, everything counts all hands on deck  

What about individual regulation? If you don't want to lose your BTC don't deposit it anywhere you don't own the private keys, simple. If one prefer a different regulation, one may just deposit it anywhere even not owning the private keys.

Just make your own set of rules whatever it be and take the responsability for what you do.

I invite you to become a part of the cyptocurrency council advocates for a responsible cryptocurrency community

without intergrity you could loose your btc BEFORE you get it, there have been many miners burned by mining pools
there are developers who have devised wallets that steal your coins once it reaches a certain level
there are developers who create websites that offer you free coins but place viruses on your computer that raid your wallets

at every turn you could lose your coins, your coins are vulnerable as long as they are connected to the internet and useless as long as they are not connected to the internet, so at some point in order to used them you must expose them to many risks.

There are tons of on and offline p2p scams.  

if you think there is any safe point in the btc system you need to remove your money from it

Bitcoin exists because code is safer than regulation.

It's not complicated, these tools do exist in the form of the blockchain.

A voluntary certification would work in the same way a "Heart Foundation" tick is included on product packaging. Companies agree to be audited and comply with business practices in line with the standards defined by a quorum of public, peers and competitors. Nobody is forced to join, but having the certification logo published on your website (and cross-listed with the authority so it is verifiable) will serve as an assurance that certain publicly verifiable criteria have been met.

And I don't know how that works in the US, but when this UK bank lost all its money no customers of it directly lost out, because of government regulation. Instead we all paid for it as part of increased taxation. That doesn't sound desirable with bitcoin even if it ever were possible.

I`ll regulate it for you just send me .000001 BTC

Hell NO! WE DO NOT NEED BTC to be regulated at all  ;D

The Bitcoin protocol effectively allows you to "be your own bank" for the want of a better phrase, if you have Bitcoin held anywhere else in trust (Like Gox) then you assume the risk of loss like any investor.

The USA $100K government protection for customers is designed to protect everyday bank users who keep their money in bank out of necessity - salary payments, savings, etc. It's not intended as a safety net for people who take market investment risks for profit gain.

Then at the very least these bank accounts should be true deposit accounts, where the bank simply stores the dollars for you (does not lend/invest them) and charges a storage fee.

   
Post Gox - Is it time for a Bitcoin Code Authority and self-regulation?

No-I will repeat that for the hard of hearing No, and finally just one last thought- No.

Absolutely no, it would be catastrophic for the core ethos the coin was designed around.

I just had a look at the websites of several popular cryptocurrency exchanges.

Bear in mind that these things are essentially, banks. Once you give them your bitcoin,
it is theirs, for all intents and purposes. You are their liability from that time on. The
crisis in MtGOX is not a bitcoin problem, but a manifestation of the problem that bitcoin
is trying to solve.

It takes a fair amount to shock me, but the statements on web pages to the effect that
we will "prepare and publish quarterly accounts" with the "we" being the exchanges, is
just stunning.

I can understand conventional banks running on COBOL having problems reconciling their
books every day, but they try to do it. The thought that cryptocurrency exchanges would
think that publishing information only every quarter, is comforting to their customers shows
a disconnect between what is needed, and what they demand from their customers via
KYC and other questioning.

I see no reason why daily information cannot be published, and would welcome the exchanges
views on that. Similarly, much of the information asked for by exchanges from customers is
valuable in itself. If the exchange gets hacked, and customer data is accessed, the loss of
privacy may be more costly than any bitcoin stolen.

Something worth thinking about: without privacy, there can be no private property.

To take it a step further there is no reason such information couldn't be automated and available on demand.

This is exactly the point of making business operating at the fiat/BTC boundary self-regulate rather than wait for government regulation.

Just to be clear on my earlier posts - the Bitcoin Authority regulation is intended for the financial sector - exchanges and currency dealers like Gox where large sums of BTC and fiat are being traded and our problems currently lie.

I do not advocate regulation of individuals or businesses who privately exchange Bitcoins for goods and services.

Correct me if I'm wrong but I believe Andreas Antonopoulos himself said one of the main points of Bitcoin was to change the current paradigm and allow for visibility and accountability at the big end of the market, and opacity and anonymity at the lower end between everyday users. Or something to that effect. Peer regulation is simply an extension of that, the ability of the market to call out bad actors on their own who refuse to open themselves up to true public accountability.

Let me put this a different way for you pie-in-the-sky folk, it doesn't matter if the socalled protocol for btc is perfect, right now a REAL security issue has been identified, not the problem that MT Gox pointed us to, but the ability to trace 800K btc once controlled by MG, if the cryptocurrency community is unable to find the money then the system cannot and should not be trusted.

If that many Bitcoins could be stolen, missing, or untraced the protocol is unsafe for mass acceptance.   If we don't find the funds before the summer radical change must occur in the system to make up for the failings or weaknesses of the protocol. 

Exactly!

How can the Bitcoin economy grow without third parties? How can Bitcoin go mainstream without third parties? Should every Bitcoin holder be required to lock down all of their coins in supercold storage? How does that facilitate trade? How user friendly is that?

I thought Bitcoin was supposed to be "the money of the internet", a quick, easy and safe way to move money across borders, making trade easier and cheaper. But with all the thefts happening, most hardcore bitcoiners say that no one can be trusted, and any significant amount of coins should be locked away in fireproof safes inside Faraday cages in steel vaults, just waiting (for years) for their value to somehow magically increase.
But an increase in value won't happen unless Bitcoin becomes userfriendly enough to be used by the Average Joe. And for that to happen, we need safe, reliable exchanges and other service providers (trusted third parties). And, in turn, for that to become a reality, we absolutely need some international regulations and safety nets securing and insuring the crypto-wealth people, for convenience, store on exchanges and online wallets.

Bitcoin must become co-opted/"compromised" by the powers that be -- if it's ever going to reach the mainstream. It must be legitimized, legalised and regulated by the central banks and other authorities many of us dislike and wanted to destroy. That's the only way to achieve truly widespread adoption.

Make no mistake: Mark Karpeles won't be the last exchange owner stealing people's money. This whole Gox thing was only a minor blow to the BTC economy, but when the owners of BTC-e or Bitstamp or other exchanges end up doing the same thing, the blow might just be a major one, hurting Bitcoin in the long-term.

I totally agree!

It's not up to Bitcoin to keep your bitcoins safe, just like it's not up to tcp/ip or "the internet" to keep viruses off your PC. Bitcoin is decentralized, there's no need to introduce a central authority to manage it. If they want to regulate anything then they should regulate bitcoin related services which in effect are just companies so they should follow some rules and have some accountability because they are taking people's money.

Bitcoin never took any money from anybody...

Wrong.

The "safety" of the protocol has nothing to do with the Gox situation, as much as they might have wanted the public to think that. Nor was there an unknown weakness, the transaction malleability issue was known since 2011. The failing here as we are given to understand was they they didn't adjust their software to work around it and as a result got robbed blind. That is as inexcusable as if someone intentionally left their antivirus definitions 3 years out of date and then blame the antivirus software for having a fault when they get infected.

Is it a fault in Bitcoin if you logged onto an exchange website and your account there says the 1000 BTC you deposited is currently in your account with them? Because unless you hold the private keys yourself to those coins then the aren't yours. If your account is telling you that the exchange has your coins but you can't withdraw them, and then it turns out they were long gone then isn't that misrepresentation at best, fraud as worst?

I do agree with what you said about finding out where the BTC went, but we also need to find out what was going on behind the scenes at Gox. Hopefully there will be further leaks of documents from them so a proper autopsy can be performed here.

I could hardly imagine a worse example than the censorship body known as the Comics Code Authority, that bowdlerized and basically wrecked comics as anything but a corporate, commercial product for literally decades.  Unlike what Congress was considering, which would certainly have been found unconstitutional if fought in court, the CCA was not a government body and therefore not subject to constitutional review.  Therefore, it could basically do whatever it wanted, as it was a "voluntary" association.

Further, while some kind of self-regulation would be nice in Bitcoin, look at the leading lights, such as they are.  Even the Foundation supposedly set up to serve BTC interests turns out to have had some of the biggest crooks in the nascent industry on it.  Given past history, how would the community ensure that such an authority would serve BTC interests and not simply the selfish interests of the members of the authority?

My driving point was: 'don't get distracted by the malleability issue, or the ridiculous notion that the btc protocol is perfect, the focus should be on finding the money.

Let me put this another way it doesn't matter if Mt Gox was operated in prison by the incarcerated hackers using computers littered with viruses of all sorts, and everyone could do anything they wanted with the funds, the btc protocol must allow us to find, trace, or track all of the 800K btc that once existed in MT Gox.   It doesn't matter if it was stolen, got stuck in a hole, was put in cold storage, used to pay rent, etc ... we must be able to track it, trace it, and follow the money, that is the NUMBER 1 purpose of the block chain, and the blockchain is the core of the btc protocol.

If you don't find the money, then every exchange has a recipe for doing the same thing on purpose, over and over again.  

That's why if the problem isn't solved via the btc protocol very soon (before the summer), then a "work around" will be necessary -- exchanges will have to adopt very serious changes to INSURE safety, accountability, transparency, solvency, etc ...

As the title of the thread suggests it's either secure the system with code or with self-regulation at this moment we have neither, but only now did we realize that the king had no clothes we have until the beginning of the summer to fix this or else its back to single digits for btc with no hope for a rise without the safeguards.

I must admit that I didn't even bother reading the OP.
Just the title was enough to say: NO

Let me say that again: NO

That is completely against the entire Bitcoin movement.

That is the very definition of the word prejudice -  making a determination on a matter without having reasonably sufficient info to draw a rational conclusion.

If the bitcoin movement is unsafe for worldwide consumption and only for a niche community then keep it to yourself, but if you want worldwide acceptance it must be safe.

Agreed.


Yes.


No.  Market forces would cause safe, reliable exchanges to emerge with time.

You get fooled by Gox multiple times, and you call for regulation for everyone? Please.
Should have stayed away, long ago.
Sorry, I do not support this.

There are other approaches to avoid an exchange taking your money.

So you are saying that Bitcoin should be regulated and controlled to make it "safe"?

My name is Idea AtM 23, Im CEO and Founder of. Celebrity Green Room. Bit coin in general is a no/super-fail! Btc makes no sense if you understand economics big picture. If any of you will google this info you can avoid the cheat: http://www.washingtonsblog.com/2013/06/microsoft-programmed-in-nsa-backdoor-in-windows-by-1999.html
I told them long ago not to do Mt. Gox, him filing with US Regulators wasn't enough????, its bit coins right?!? Fact that those bit coins cant be excluded from market and new ones generated to repair client accounts is a very big deal, do they not know the bit coin info, there's only 22 mil btc should be an easy fix but they told clients it was missing/stolen and gave up so the loss stays a loss. Plenty of brite minds in btc ;) Now with $480 mil missing Mt. Gox/he can and did file for bankruptcy ( kiss your money good buy :), premeditated or not had your money been with Celebrity Green Room you would still have it and making another 30 mil annually in passive income. Btc has thousands of vulnerablilties, Celebrity Green Room is unhackable!, that means zero chance you can lose even a peso. Unless you know of another site where you cant lose any money and if site went down you can get your cash at local safety deposit boxes

Wow, thanks for the info but I must say,
it is the first time that I have met a CEO that cannot spell properly.

It is bright, not brite!

Also, it is 21 millions not 22.

Thanks for stopping by.

Thread should have ended after this post.  Concise and correct.

Frankly, the proposal is antithetical to everything the Bitcoin community values.  It is like suggesting a synagogue raise money by holding an all you can eat pork BBQ.  It doesn't take long to reject it.  First, even if there were a way to impose a top-down solution on Bitcoin (how would this happen), nobody has even presented a proposal detailed enough to judge it.

The moment we're trusting some dictatorial authority instead of the protocol itself, we might as well just be trading Linden dollars or some wholly imaginary currency.

I think some consensus-based best practices might be in order, but you simply can't expect that everyone will accept even those, and as long as people insist on doing dumb things like leaving money on exchanges and "investing" in Ponzis, there's not much a central authority can do.  How are you going to stop Bitcoiners from doing whatever they please?  Guys with guns?

Let's leave that kind of thing to governments.

Cannot regulate a mathematical exercise but you can regulate buying and selling the mathematical solution. Just like you can regulate a football game but not the concept of a football game.

It doesn't matter if Mt Gox was run by scammers working with viruses infected computers and the stupidest customers on earth, the btc protocol via the blockchain MUST enable us to find all of the funds that entered and left Mt Gox.   As such, this emergency isn't about Mt Gox, they were just the ones who pulled the alarm, this emergency is about the btc protocol working for the benefit of the btc society.  

If you can't find the "missing" money what is to stop all other exchanges from duplicating the disappearing btc trick over and over again?  If the protocol allows for this sort of thing, evidently it does, then the protocol must be changed, if the protocol cannot be changed then the service providers must change their ways of operation to make up for the short coming of the protocol.  

However the protocol can be changed, major security upgrades can be instituted and other responsible measure can be taken to secure accountable operation of the system.   But in addition to that, which might take lots of time, exchanges must now step-up and show themselves worth by proving solvency via blockchain, becoming community  certified, subscribe to high ethical standards, upgrade security features, and be bonded, insured and able to provide performance guarantees.

Otherwise the market value of btc will continue to sink to the level at which the market feels the btc experiment is worth, in less than a month it will be less than $100.   Now before you think that would be a great buying opportunity, THAT VALUE WILL NOT INCREASE ABOVE THE $100.   Without the trust the system cannot scale.

I've estimated that we have until the beginning of the summer, approx 1 mos to make something meaningful happen.  

The markets lost 30% because of Mt Gox, but it has lost another 30% because the missing money issue is real and can EASILY happen again.

It doesn't matter if your money is in cold storage, it will devalue where ever it stands $0 is $0 in all temperatures.

OP: There already exists such authority. You can talk to him in #bitcoin-assets (https://webchat.freenode.net/?channels=bitcoin-assets).

Awesome, I look forward to seeing you on the cover of Time.

Nothing stops an exchange from doing this, but such an act will trash its reputation and therefore reduce its profit potential.  This mechanic is sufficient to eventually bring the probability of such an event down to a level that customers are happy with on balance.

This mechanic is also useful in lowering the barrier to entry for competing exchanges.

A common set of standards and checklists easily verifiable would be better than a central authority.

Nope. Now that other exchange owners notice that Mark Karpeles is getting away with his massive theft, they'll have every incentive to replicate that theft. And they'll do so. Repeatedly. And they'll use the same type of lame excuse as Karpeles and his defenders have used, i.e. that hackers and/or the US Gov. stole all the BTC and the fiat. And that they're under a gag order, etc.

Reputation?  If they take a couple hundred million over 2 yrs, they won't give a F about reputation.  

Nevertheless, that is NOT the issue, the issue is that they can take it if they want to, that ability must be "balanced" with 'checks and balance', certifications, guarantees, audits, financial security, electronic security, protocol security, transparency, and accountability so as to minimize the possibility of that happening.

take a look at this: https://bitcoinaverage.com/markets.htm#USD, http://coinmarketcap.com/ ignored secific exchanges from their btc avg because of the following:

btctrade   volume data suspect
coinbase   volume data not published
mtgox   withdrawals blocked
okcoin   volume data suspect


There is no market "barrier" for integrity, accountability, transparency, and financial security  - if you are only worth 2 btc, then only say you are worth 2btc, only show 2btc, and secure that 2btc with all of your might; allow the blockchain to show your name for incoming/outgoing funds this make it easier for everyone to track your performance, and to trace things.  

This is the kind of fundamental misunderstanding that needs to be corrected.  

Hats are designed to be worn on your head.  If you wear them on your foot and they don't work correctly, there isn't a fault with the way the hat is designed, there a fault with you not using it as intended.

Bitcoin is designed as peer-to-peer money.  One Sender and one Recipient.  If you leave someone else in charge of your coins, there isn't a fault with the way Bitcoin is designed, there a fault with you not using it as intended.

If someone was standing on a street corner with a glass box full of money and they said they'd look after your cash for you, and you were stupid enough to put your money in the box and find that they are not there the following day, is that a fault with the way money is designed?  Or is that a fault with you being reckless and naive?

Exchanges should never have become as popular as they are in the first place.  People just need to learn the difference between the fiat money world and the digital world.  Exchanges are not banks and you should not trust them, or anyone else, to look after your money for you.  Use it properly and you won't get burned.

Bitcoin itself hasn't ever had major problems, it's always been the people who use it and that's something that regulation won't ever solve.

MTGOX - A corrupt organisation that decided to take the money and run, this happens in all economies, any of us who were in the know avoided MTGOX because of all the problems they were having prior to declaring bankruptcy

People getting their wallets hacked - That's the fault of people who refuse to listen to the constant warnings about using online wallets

People getting virus'/keyloggers which hijack their PC - This has been a problem since the internet first began, people will continue to ignore warnings about this no matter what economy we're in

People getting scammed - Even I have gone out of my way to warn people about internet scammers and people I've identified as potential scammers yet they still ignore it and get scammed

Child Pornography - This is just another pile of bullshit invented by media outlets to attack Bitcoin, no, I'm not denying that some people won't use Bitcoin or other cryptocurrencies to buy child pornography but this kind of argument is exactly the same sort of argument that people use against homosexuals by saying that they're child molesters etc. etc. there's no need for 'more' regulation because there are already laws against child pornography

In a simple response, you can't regulate other peoples' stupidity, these problems will exist no matter how much regulation you put in.

Because they stand to profit - for example, Vessenes was slobbering over the chance to run the only "government approved" exchange.

Has the US government done a good job regulating financial companies for the last 20 years?  NO - they've simply printed more money for Goldman Sachs, one of the biggest thieves in the world! What makes you think that they would like to "legitimize" bitcoin? They want to BURY it under a mountain of bureaucracy and fees! 15 years ago, Paypal started off trying to do what Bitcoin is doing, look where they ended up...


Bitcoin has plenty of legitimacy amongst people who UNDERSTAND how tenuous the global financial system really has become.

If the owners of an exchange are being trusted with more wealth than their reputation is worth then they likely will.  The idea of feigning a hack or bug and running with the money is not new.

I agree that this can happen repeatedly, but argue that the frequency of such events will decrease as people become wary of trusting large amounts of money to highly indebted entities with little reputation.


Yes.  This highlights what can happen when people trust more money to an entity than its reputation is worth.

On the flip side of the coin, imagine I trust Gavin Andresen to hold 0.01 BTC for a week.  He certainly has an incentive to steal that money; He'd be destroying his reputation, but would be up 0.01 BTC!  I hope you can appreciate that this is not in Gavin's best interest; his reputation is worth much more than 0.01 BTC.


You're simply asserting that regulations are the only thing that can "minimize the possibility of this happening".  I'm describing a regulation-free mechanism that I claim would have precisely this effect.


Certainly, these tactics all boost a newcomers trustworthiness (at the expense of extra work).  I have no problem with an exchange experimenting with such things.  If people eventually tire of having their money stolen, then doubtless such exchanges will have an advantage.  If not, exchanges designed to steal people's money will continue to dominate.

Not sure if you read the comments in this thread, but i posted a link that shows the NSA has back door access to Windows Laptops/devices, so how can ppl silly enough to use windows going protect their btc from them or hackers on that level??? YOU'RE GETTING ALL THE BTC NUMBERS THRU YOUR 'WINDOWS' DEVICE! Even if this wasn't the case, not being able to fix electronic money makes no sense. You could simply reset the market size down to the unstolen btc, that would effectively freeze out stolen coins, Exchange that get hacked can use a digital miner to restore customer accounts, litecoin or dif crypto currency. Common sense would dictate imitating the strengths and safe gaurds of current monetary systems, or be ok with losing it. At Celebrity Green Room our first conversation with customers is how safe thier money is, how impossible it is to lose because it never leaves thier account til we see them on live camera. Compare that for a second, do you want unsecure, difficult to use digital currency that can easily be stolen or would you rather just use your face everywhere YOU go, no ID or cards needed. Easy money easy life, hard money hard life :)

The link said 10 to 20 years.