Bitcoin Forum

Those of you crying to the state for regulation may be well intentioned but you are unfortunately looking in solutions for the wrong place.  Regulation will do nothing to protect bitcoin users, it would only benefit entrenched interests and the "big boys".  Consider how regulation completely failed to prevent the following calamities:

Enron
Worldcom
Libor Scandal
Bernie Madoff
The greatest theft in human history - the bailout of the "too big to fails"
The massive derivitaives banking scam
MF Global

-These are just the few i can remember and ones that relate soley to finance, there are many more financial examples from the past few years that regulation failed(purposefully) to prevent.

All of these terrible thefts were AIDED by regulation.  Regulatory capture is a term that refers to the situation in which people demand company x to be regulated, as a result, company x colludes/infiltrades these regulatory positions and appoints previous company x employees or friends of company x to these positions.  You can look at literally ANY corporation in america and see this phenomenon; from monsanto heads who are incharge of the FDA, to ex-bankers in charge of banking and finance regulation, defense contractor heads in charge of military budget regulation, the list goes no forever, it literally never ends.  Regulator capture is very real, to think that regulation is created for the intention of protecting the little guy is naieve and akin to saying that the state exists to help people.

Regulation will only hurt bitcoin.  Do you really believe giving the power to regulate bitcoin companies to the state is going to be good for us?  Bitcoin is a dagger to the heart of all fiat currencies, it's intention is to free people from the tyranny of state ass-wipe paper which it does wonderfully.  It is astonishingly stupid to thank that those bitcoin was created to destroy should have power over bitcoin companies.

The market can and will solve all the problems we are currently experiencing.  I feel terrible for people who lost money in Gox, but seriously it was WELL KNOWN that gox has screwed people 5 times in the past.  Why in the world would you keep your life savings on an EXCHANGE for christs sake?  This is the same thing as keeping your money in a bank and then rioting when a bank run occurrs.  I am no bitcoin expert, but i can quite easily do cold storage.  The bitcoin protocol provides all the necessary security you need to keep your bitcoins safe, guides on cold storage are all over youtube and the internet.  

Bitcoin places the responsibility of keeping your coins safe on YOU, it was built with tools in place for you to be your own bank.  The age of trusting others with your money is over.  If you want to have money in a hot wallet, import the full amount from cold storage, send a certain amount to your hot wallet and send the rest back to cold storage.  This is the safe way to store your bitcoin, not in someone else bank who lost the communities trust 5 times before in the past.

The whole point of a free market is that there is no "too big to fail".  Gox is dead, as it should be.  There are already legitimate exchanges in the market like coinbase and others.  It is up to you to do your research and not to leave your money just sitting in exchanges.

Regulators have failed us in every industry, without an understanding of the true purpose of regulation-to keep out small players, protect big players, extract wealth and power-you can't possibly see the natural solutions that will emerge in the market.  Is it not obvious that we live in a fascist country?  Corporations and the state collude to squash competition and enrich themselves, they are the last people that should be in control of bitcoin.  The community of bitcoiners should be in charge of bitcoin by voting with the coins and the market should allow those who suck to fail-as it has in this instance.  We do not have capitalism in America, we have crapitalism or crony capitalism.  In true capitalism the market decides and those who fail don't get bailouts. It sucks people lost their money in a "magic the gathering" bitcoin exchange who repeatedly violated peoples trust and lied, but you are responsible for yourself in a free market and captured regulators will never gives a crap about you.

yeah right buddie your obviously part of this honeypot called gox go lick the honey of mark

regulation will do nothing negative but ensure sites like this can't harbour criminals like you

OP is right. Regulations are terrible.

I inspect my own food at restaurants to ensure I don't shit blood or die of a preventable bacterial infection.
I inspect any bridges and roads myself before I drive over them.
I inspect and audit my own FIAT bank to ensure they are still solvent and haven't run off with my money.


I don't understand why everyone can't just do this.

I don't agree - there must be many examples of where a regulatory framework protects the consumer.

One example that springs to mind is the Civil Aviation Authority - the airline operaters employ actuaries to balance risk against cost -  profit margins are very tight. A lack of sufficient regulation could lead to a real danger of safety standards being compromised (http://www.telegraph.co.uk/travel/travelnews/2687252/Airline-maintenance-cuts-threaten-safety.html) - some airlines are pushing the envelope already, even with stringent regulation in place.

Here (http://www.theguardian.com/world/2013/feb/26/egyptian-ballooning-safety-standards-criticised) is an article about the dangers (and fatalities) that occurred in hot air ballooning accidents in Egypt - where regulations are either not as stringent (as those in the UK for eg.), or not enforced to a sufficient standard.

In finance, in the UK, my understanding is that a firm must comply with the Conduct of Business Sourcebook (http://fshandbook.info/FS/html/handbook/COBS) as specified by the Financial Conduct Authority. Having had a quick skim through, the sourcebook seems to lay a lot of store by transparency; acting fairly,honestly and professionaly;disclosure of information;etc etc

   The principles of the regulation are laid out here (http://fshandbook.info/FS/html/handbook/PRIN/2/1). Please read them and explain to me how the application of these principles would have been counterproductive for the customers of Mt.Gox - or indeed any of us in our BTC dealings with third parties. Especially since it is the case that where a firm has complied with the regulations (and still gone bust) the customer maybe entitled to compensation.

and you died in a plane crash  :D

oh wait you didn't because they force the airlines to do maintenance,

they don't just wait till they drop out of the sky then buy a new plane, or do they ?

I have no affliation with gox at all. I'm just one guy with a very small amount of bitcoin.  I don't even have a bitcoin business-yet.  Nice how you assume i'm a criminal. 

Everything regulation will do will be negative.  If you want to get truthful about it, they will steal money from everyone to pay for their new regulations, steal money from everyone to pay goons to enforce their new regulations and the state will gain more power over this powerful anti-state technology.  It's not my fault you were foolish enough to leave your coins on gox, take responsibility and stop lashing out at others.

You think airlines upkeep thier planes BECAUSE the state goons force them to?  They do it so people will fly their airlines.  If in a free market if they stopped maintaining their aircraft, no one would use their airlines and they would lose business.  It's that simple, that's how the market works, if you don't like something you withdrawl your funding.  Unlike the state, which you cannot say no to.

We already have private organizations that do this function; examples: better business bureau, consumer reports, underwriters laboratories, etc.  We need a bitcoin business bureau to investigate bitcoin companies not a monopolized criminal gang with an interest in squashing competition to their fiat empire in charge of it.

It's not my fault you were foolish enough to left your coins on "magic the gathering" online exchange, take responsibility and stop lashing out at others.  Noone forced you to use gox, there were many warnings.  I never once used gox because I took the time to research them before buying and it wasn't a lot of time, just a few hours.  The same as i did with cold storage, it didn't take an eternity or a masters degree in programming to figure out cold storage, I think anyone who can download an MP3 or burn a cd could do it.

And when your whole family is dead from eating tainted food that didn't receive any oversight, ITS FREE MARKET LOL AMIRITE? BUY MEAT ELSEWHERE NEXT TIME I GUESS! Regulations will never eradicate the problem, but proper regulations can certainly help reduce it more than FREE MARKET.

Seriously, go read Upton Sinclairs The Jungle and tell me how the "Free Market" fixed that.

Everything you said could be done and done better by an organization that is forced to respond to market demand, not by a monopolized organization.  Organizations who extract funds through violence provide little to no service at all unless it benefits them to do so.  Why should you care what you customers say if they are forced to pay you and you don't have to work for their money?  Why should you work to improve your product or service when people are forced to buy it?  Monopolized regulations will not solve these problems, just like they didn't solve them anywhere else.  The state loves to run infront of social progress and say: "look, look what we did, we passed a law and see!! see!! now its fixed", but the truth is that throughout most of history the people have changed and worked for changes and society has changed and thats why the world changed, not because a politician wrote something down on paper.

Regulation should not be monopolized, it should be distributed, examples; bbb, consumer reports, etc.  Businesses should compete to provide you the best regulation service, otherwise they don't care what kind of service they provide.

Essentially what your saying is: Without government who would build the roads? Without government who would regulate the bitcoins? People and businesses voluntarily working together for mutual benefit can.  Blockchain technology makes this exceedingly easy, given the public nature of it.  It needs only to be implemented, customers should demand this transparency from exchanges and if not provided, go elsewhere.

I have one word with regard to UK banking/finance: Libor.

Regulations have created corporations.  Entities which are immune and disconnected from the results of their actions.  A free market would never allow such concentration of wealth to exist given the ease of entry into a market without barriers.  

I don't have time to invest in learning about hot air balooning in Egypt or other places except to say that there are many factors which could influence such a reduction in fatalities; less people doing it in one area than another, poor quality materials, poor training, etc.  The list goes on, to nail it down and say "BECAUSE OF THIS ONE THING" makes no sense to me.  I am not an expert in hot air balloning and do not have time to be one.  However, market forces are the same no matter what market you are in and if the organization doing the inspecting is monopolized and coercive in nature their incentives will be completely backward-and that does not change no matter the situation.

Private competeing food inspection services can do everything you mentioned and will have their incentives aligned to actually care about the little guy as opposed to monopolized services.  You are essentially saying; without violence, who would inspect the burgers?  What a wonderful state our current food is in america; disgusting fast food, GMOs, pesticides, god knows what else.  All the regulations did was create corporations that dominated the market and thus the small guy can no longer buy food from small farms at the store, no he only gets to chose from giant factory farms who got their people into regulatory positions in their respective industries and pushed the little guy out.  Then quality goes way down.  which is why our food is so disgusting. Don't forget about all the subsidies, fed money and favors these giants get while the little guy struggles to comply with all the regulations that apply to him but not them.  In a free market these giants would be accountable, but now they get that FDA inspected stamp and suddenly everything is ok. Epic fail on your part. 

Federal reserve and Wall street are the biggest scammers on Earth actually as they practice FRB (Fractional Reserve Banking),
but it is 100% legal as long as they are in power and decide the laws.

Mt Gox probably also applied FRB, but since bitcoin cannot be printed out of thin air,
they got problem when bitcoin rallied and people wanted to cash out their dollars or bitcoins.

You don't need to do it yourself, that's why we have the division of labor.  In the absence of monopolized inefficient regulation, private entities would immediately spring up to service you just like they do whenever there is an opportunity to provide a service.  Only the best market regulatory agencies would survive in each industry since they provided the best service to their customers, since they exist on customer funds instead of stolen money they have to be effective and responsive.  Restaurants would have incentives to have the "Food Inspection Guarantee" or "Food Safe Place" seal of approvals, because if they didn't people would think twice about going there.  Do you see now that the market can provide everything you desire and do so without inherent conflicts of interest which a monopolized system of violence has?  Once you have an understanding of market incentives, you can begin to see how these services can exist in a free market and how they will be better provided.

Also, regulations created fractional reserve banking.

You don't need to inspect roads yourself, again, that's why we have division of labor.

You should remove the "in crypto we trust" from your website since clearly you don't trust in cryptography to provide solutions to exchange reserve problems-which it clearly can.

regulation is bad  >:(

the only regulation we need, is to enforce transparency. transparency is important so that consumers can choose the right provider

then, bad providers will vanish from the markets automatically

KYC is bad for consumers, but good for governments. The consumer needs KYP = know your provider. Gox forced their customers to reveal personal details, but did not supply balance sheets themselves. Same with banks. In an ideal world, banks could have anonymous customers but would have to maintain detailed balance sheets!

A market solution is already out: coinkite stores bitcoins and provides a way for people to prove they are not operating a fractional reserve system.  

https://coinkite.com/faq/security

Regulation doesn't stop people from screwing other people.  The financial system is highly regulated and look what has happened in it in the past decade, its laughable to assume regulations are the answer.

  

Here is YOUR post from Feb 2013:

"once again i will say i don't think he will get past first base, please refrain from trying to insult me several forum members are trying to discredit me when its between the SCAM company Mtgox and their customer they are currently scamming, also its not my problem though i really think Mtgox is a pyramid scheme and im surprised a website with thousands of users and people of such high caliber  Cheesy like yourself cannot see it

Let put it in Basic terms

if you give me money or Mtgox  Cheesy for a service and i /they turn around and say please wait 23 days instead of 3-5 plus providing lots of identification is this ok?

why is their so many users that just cannot see the facts being presented ?"

And you want to blame others for losing your money in gox? You knew they were shady.

Of course, the worst part about Bitcoin gaining momentum is that the newer followers cannot keep up or won't participate in the education campaign required for them to understand basic economics.

You should hire a regulator to make a law preventing idiots from handicapping those who can care for themselves responsibly. Then you'd get all the regulation you could ever want.

Or we could just hire a regulator to make a law saying no one can steal anyone else's bitcoin.  That'll teach em.  Or we could have the state sue them and when the state wins it'll keep all the money for us.

Why needs to be black or white ?? Can't be something in the middle, something making sense ? There are things in life that better work regulated and there are others not... The bitcoin community should develop the granularity level of detail to determine what aspect of bitcoin can be regulated and what aspects can not.

You can't fix the incentives in a monopolized regulatory framework that is captured every time.  That's why we don't see regulation as a solution, plus its immoral.

In a free market the savings from less maintenance will be passed on the customer and people will risk flying with the cheaper but less safe airline.  

Your claim "Regulators have failed us in every industry" is either ignorant or stupid, i don't know which but it certainly isn't correct.  Then you've gone on to advocate private inspection companies - which is just regulation in another form.  So are you against state regulation or all regulation?

You can't unequivocally say regulation is bad.  It's just as ironic as the "fuck the government" crowd who then goes and whines to the police when they get hacked.  Can't have it both ways. 

Regulation isn't the problem, corruption is.  Too much power in the hands of a few.  What needs to happen is regulation should be put on an even playing field, not be made so that only banks and wealthy individuals/corporations can afford money transmitter licenses and the like.  There need to be small business options.

Why do you assume there will be less maintenance in a free market where the state does not exist to protect the big boys?  On a fundamental level, what your saying is: "mommy, daddy, do it for me".  The beauty of the market is that the market will actually do it for you given the chance because someone will benefit from doing it for you.

I am for voluntary free market regulation, not regulation which extracts its funding through theft and enforces its whims at gunpoint and is not effective due to regulatory capture.  In a free market, organizations actually suffer as a result of their bad service-there are no bailouts(with stolen money).

If there a monopoly of violence, it will always be captured and controlled by the powerful-that;s why the state can never be reformed or made better by "getting the right guy or group in there".  Power should be distributed not centralized, you would think bitcoin users would understand this given their preference for decentralization and a free market currency.  As you have rightly pointed out, the licensing scheme is nothing more than a massive barrier to entry that affected me personally by preventing me from opening a bitcoin atm.

see, regulations can be good or bad, in the case of pharma or airplanes:

pharma: good regulation ensures substances are clean and properly labelled. bad regulations outlaw substances and deprive you from free choice what to put into your body.

airplanes: good regulation makes sure planes don't fall from the sky and ticket pricing is proper. bad regulations create no-fly-lists and deprive you from free choice where to travel.

It is the government's job to keep the roads in good conditions, not to impose speed limits, generally speaking.

exactly, could be good or bad and main thing required to be good is transparency and honest people.

fda has killed millions due to keeping drugs off the market or allowing unsafe drugs.  Again, a monopoly that does not have to compete in the market has no incentive to do a good job, especially when they can extract their money from "customers" at gunpoint.

I wish what you said was true, but there is a reason why the state monopolizes certain services like road building, policing, judging, etc.  it's because they want people to see them as essential: "But without the state, who would police, build the roads, etc?"  The truth is all of these services could be provided without coercion and violence and provided better with competition within the market.  Would people continue to pay a private security firm if they killed thousands of their customers every year and raided them at night for non-crimes?  I doubt it. The detroit private police have been in business for 20 years without killing a single person, for them, their main priority is to keep the people safe whereas state monopolized police's main incentive is to "officer safety" at the expense of people.

Power corrupts, absolute power corrupts absolutely.  Transparency/honesty and monopoly are antithetical.

100% agreed, monopolies are a bad thing.

The truth is that we need no governments, just large powerful consumer protection organizations that ensure that everybody is well informed and free to choose at all times. I need no FDA to allow or disallow a drug as long as they do a thorough investigation and publish the results so that I (or an expert that works for me, like a doctor) can make an informed decision.

But the sad truth is also that there are many mentally disturbed people who just want to be in power.

Which is why the existence of that power should not be tolerated.  Don't hit, don't steal, don't kill, should apply to all regardless of what costume they are wearing.  Governments get a "morality pass" in our modern world and they use double speak to do so; murder is collateral damage or war, stealing is taxes or eminent domain or asset forfeiture, beating someone to death is protecting and serving, it goes on forever.  

Its astonishing to me that in countries like greece and egypt, people overthrow a state only to impose a new state.  They have some leader they like and they think that their problems are solved once he/she is in.  What happens when he/she is gone? Now your "enemy" has control of the reigns of power and can undo everything you wanted.  Plus, its immoral to force your ruler on people who just want to be free and left alone and who are not harming anyone else.  Its immoral to force others to pay for what you want, you can use lies like "greater good" but that's just a smoke screen.  When will people get it that freedom and responsibility are the actual real greatest good for all and that they don't need a master? It's better to be a free than a slave.

I hope bitcoin destroys their monetary monopoly.

So....Government?

Because there already is less maintenance where regulation is lax or not followed.  There's starkly different safety records between European/US airlines than those from some other, less rigorous parts of the world.  

You are making the misguided assumption that regulation has to be heavy handed, restrictive and only compliance only possible for large organisations.  Consider wine making, wouldn't you wont some approval process to confirm that the small winery is really making wine from only grape juice not from mixing it a bit of anti-freeze?  What about technology, would you be happy for all mobile phone networks to use their own technology, so you can only get phones on specific network through them.  Or would you rather a standard where the same phones are usable across continent and the world, including those made by new start ups that only have to conform to the specification not get buy in from the network?  Maybe you wouldn't mind if cars didn't have brake lights or indicators mandated?

Its certainly true that some regulation can be put up to protect established players and vested interests, but equally it can sometimes level the playing field.  And some is just downright practical and sensible, outweighing the drawbacks.  Regulation isn't bad itself: bad regulation is bad.

I would disagree that they would need to be large and poweful, they would be naturally limited since they are market based they cannot use coercion.  Imagine if your restaurant got F's on BBB, consumer reports, urban spoon, etc.  Do you think you would get less or more business?  Do you think you would possibly fail?

Government is based on violating everyone's rights by it's very existence and extracting it's funding involuntarily using force and using force up to the point of death or caging to enforce its whims which it calls law.  Government created law is not true law.  Market organizations cannot initiate force, so therefore they cannot be government.

I would again contest that there is less maintenance where regulation is lax or not followed, bear in mind that we exist in an entirely fascist crapitalist economy.

I never said regulation had to be restrictive to large organizations.

Of course i would want someone to regulate wine production, that would occur in a free market because people don't want to drink wine made from antifreeze and anyone trying that would soon go out of business especially in this age of information.  People are not stupid cattle, they can tell when something sucks but even more than that, private quality assurance companies would simply assert more influence over the market than they already do-filling the gap left by ineffective monopolized services.

About phones, it would not benefit phone companies to do so, they benefit from people talking to each other so they would be severly limiting themselves and customers do not want phones that only work on one platform so they would not tolerate that either.  think about incentives.  why would it benefit phone companies to restrict connections from competitors in the absence of the state?  In truth, in a free market you wouldn't have 3-4 big phone companies, you would have hundreds of small ones most likely.

Cars would still have breaklights in the absence of government since in the absence of government people still want to be safe, probably even more since the onus of safety would be on the care manufactures even more since they would be routinely reviewed by inspection companies or if they refused would lose reputation and business.  How would it benefit car companies to stop installing breaklights when the state goes away?

Eveything you said the market can and would provide better.  Who knows, we might have flying cars or be using drone transportation if the state did not prevent drones for commercial use or stifle emerging technologies which would damage big corporations.  Imagine, in a free market no one would be able to stop an emerging technology.  Bitcoin probably would have been invented 20 years ago.

At least the Federal Reserve doesn't feel a need to regulate bitcoin. Chair Janet Yellen just testified before the Senate Banking Committee today. You'll remember Senator Manchin is the committe member who called for bitcoin ban yesterday. She said “It’s important to understand that this is a payment innovation that’s happening outside the banking industry. The Federal Reserve simply does not have the authority to regulate bitcoin in any way.” http://bitjuice.com/2014/02/27/janet-yellen-fed-will-steer-clear-of-bitcoin/

I don't believe anything they say given what they do for a living.  They may not go after it in the open, but i would not be surprised if the ddos attacks, other attacks and bad press are a result of an organized campaign to attack bitcoin.  There is now way they would just allow bitcoin to take their power away.

"private quality assurance companies" So regulation then.  I take from this you are anti government, not anti regulation.  We just have to trust the private regulator has our best interest in mind, they have an incentive to, right?  Who pays for them?  The party being regulated.  Hang on...
cf. credit rating agencies for example of how this can work out.

"it would not benefit phone companies to do so [use their own technology]".  I think maybe you misread this, you could still terminate on any other network. I take from this you are poorly informed.  This used to be the model of mobile phones in the US, consequently the handsets and their functionality were years behind what was available in Europe and Korea where common standard was observed.  And in a previous era phone company's did restrict you to their network, as did early electricity companies: to lock you in to their eco-system, forcing you to buy appliances from them.  You don't believe in a free market people will happily get locked into a private eco-system?  cf. Apple.  (fortunatly there's broad enough market to exist outside the Apple Appstore: this is only an illustration that incentives differ between business models, im not saying Apple should be regulated).

Likewise people did (possibly still do) buy cheap anti-freeze wine because its cheap and didn't know any better.  Car manufactures had to be forced to add safety features and do so consistently.  I didn't chose the examples at random, they are all good references to why some central regulation is necessary sometimes.

Because I am for regulation, I want the strictest and strongest regulation which can only be provided by a free market.  I have some ideas on how free market regulation may be profitable, but remember, the free market is unlimited and it's ways to produce value are infinite so there is no way i could know the most efficient way it would work.  I would guess that businesses could pay a membership or fee to be inspected by a private regulatory company who would then endorse them as long as the paying company met certain requirements per their industry.  Insurance companies would benefit from having healthy and safe locations to reduce the number of claims so therefore they may have an incentive to pay.  I would also assume some individuals would pay to benefit from these services as well. You just have to follow the incentives.   These are just a few ideas, I am no expert.

I was aware that this was the model of phone companies previously, but again, remember that corporations are creations of the state and would not exist at such a large scale in a free market to do practically no barriers to entry other than natural ones.  Under our current crapitalism system, if the government disapeared tomorrow, some people may get locked into systems, but given the complete openness of the market, providers link ting and smaller services would have a much easier time stealing customers from the locked down services.  It would only be necessary to say: "On our service, you can talk to this many more people than you can on x locked down service."  Problem solved.

That wine company would be out of business nearly immediately, especially if they damaged their customers bodies.  Remember that in a free society, property rights are not weakened by government; eminent domain, asset forfeiture, theft by taxation, corporate corruption, etc.  Insurance agents for the damaged party would have claim to the assets of the wine seller and they would be able to prove the wine was tainted.  Dispute resolution organizations would work with both insurance organizations to make the victim whole.  No one would ever buy wine there again, problem solved and the incentives are correct.

I just want to point out (partially to Pening's point), that countries like Russia, Sudan, Turkmenistan and some others have horrific fatality / poor maintenance airline records going back years because there is such lax or nonexistant regulation, and they still do a shit ton of business so I'm not sure why "Free Market" hasn't wiped them out yet.

edit: forgot the word Airline

Those are all states not free markets.  That's like saying somalia is a anarchist libertarian paradise when in reality it is a failed state that is now being torn to pieces by states trying to take it over.

"I have some ideas on how free market regulation may be profitable..."  I have some ideas how profitability is probably the worst motive for regulation.  No, not ideas, actual real examples.  Already mentioned the credit rating agencies.  Paying a "private regulatory company" is how alot of industry used to work, and some low key areas still do.  Where  quality rather than safety is prime concern, or it doesn't really matter.  We turned to the state to regulate because private or industry regulation often doesn't work very well - the regulators in a competitive regulation world are likly  to undercut each other in cost and standards to get the business.  Then which one do you trust?  

Really the idea of commercial regulation in some areas isn't just daft it seems like a contradiction.  If there's a company signing off restaurants as clean, are they going to be as rigorous as a local authority?  One sends round an agent who does some checks and refuses to issue a sticker if the standard isn't met.  The other sends round an agent who does some checks and shuts you down if the standard isn't met.  Which one are you really going to take your family to?  

Clearly, i'm not going to convince you, there some deep ideological objection to the state going on.  At least understand that some industries are large because they have to be, for the capital required to invest in them, not because of the state.   I dont *like* regulation, only recognise theres a place for it, and sometimes the state is the only* trustworthy regulator (* or most? least worst?  :D).  

First off, thanks for having a polite discussion!  I really enjoyed it.  Well the model you have proposed is only one model, businesses like the BBB, underwriters labs, consumer reports, etc could all be applied to bitcoin.  Those models are private and have already proven quite successful, i have no doubts that the same type of system could be applied to bitcoin.  I dont know about you, but before I buy a product or go out to eat, i look at amazon reviews and urban spoon everytime.  Its just part of my life, millions of other people do as well.  i see no reason why bitcoin accountability could not be privatized, especially given the public nature of the blockchain.

Great conversation friend, best of luck to you.  Put your coins in cold storage if you have not already.  I prepared a guide on it here for anyone who wants to know how, its a bit long winded but thats how i speak:

http://www.reddit.com/r/Bitcoin/comments/1u5yn6/easy_to_use_guide_how_to_get_bitcoin_safely_store/

Everybody be safe and do your due diligence.