The biggest threat to Bitcoin?

The high percentage of scumbags involved. More than half the exchanges have gone bust, most through "take the money and run" operators. The "Bitcoin stock exchanges" had few, if any, real companies that did anything behind them. The "Bitcoin Ponzis" were even worse. Most of the ASIC system vendors can't reliably deliver ordered products. Some of the Bitcoin Foundation leaders turned out to be crooks.

This is pathetic. It doesn't seem to be getting better, either. Look at the crowd behind Sunlot.

How many wallets have at least 0.01 BTC? It's probably reasonable to only count those.

I'm more interested in the audit being done by the trustee appointed by the Tokyo District Court. I doubt the Sunlot deal will go anywhere until that happens.

Yes, he did. It was taken away from him and given back to investors. Here's the auction of all his personal stuff. Here's the auction of his Manhattan penthouse. The auction of his boat.  You get the idea. Madoff himself is in Federal prison for the rest of his life.

Approach (2) is the standard in US law. This was a big deal in the Madoff case, because there were lots of Madoff customers with huge account balances representing Madoff trades that never happened. But Madoff customers are being paid off based on actual deposits minus withdrawals, ignoring fictitious gains.

(There's some litigation over this in the Madoff case because the scam went on for 20 years, and some long-time Madoff customers want adjustments for US dollar inflation over the years. But that's not a big issue with Mt. Gox.)

Not necessarily. They may be leveraged, operating on borrowed money.

You're missing the biggest factor - the number of Bitcoins mined per week is constant, no matter how many miners there are. All miners compete for a Bitcoin pool of fixed size.

Now go look at the difficulty graph. 

Yes. Mt. Gox went bankrupt. They're in liquidation. Karpeles is out. A court appointed bankruptcy trustee is in charge.  There are hundreds of news stories and posts about this.

For what it's worth, the bankruptcy trustee's office is the old Mt. Gox location, not in the virtual office.

That's not a bad description of China's exchange controls. If you're in  China, and you want to sell goods for dollars, that's fine with the PBOC. You can then exchange your dollars for yuan, if you so desire. That's also fine with the PBOC. If you have yuan in China, and you want to buy something from outside China with yuan, you can do that; import duties may apply. The receiving party can then buy things from China in yuan. They may be able to convert yuan to dollars in Hong Kong.

The key point is that this is tied to goods shipments. China encourages exports, and isn't that hostile to imports. Those are OK. Pure money transactions are subject to capital controls. Part of the purpose of this is to favor doing real business in goods over pure financial transactions.

The big crash of 2008 could have been avoided at the cost of a smaller crash about two years earlier. Without some of the Bush-era stimulus policies, there would have been a crash in housing several years earlier, but it would have been about the size of the savings and loan debacle of the 1980s. There was a mindset, fully endorsed by Alan Greenspan at the Fed, that rising house prices were a good thing and a source of wealth. Greenspan really didn't believe that someday there had to be a crash in housing. ("Houses can only go up!". Wrong.)

A big problem was the earlier elimination of Glass-Stegall, the law which kept commercial banks from getting into the stock market. While brokerages were separate from banking, a Wall Street crash didn't take down the banking system. That separation was put into place in 1933 because of the 1929 crash. It was repealed in 1999. Trouble soon followed.

The Bitcoin world needs suckers like you. This is a zero-sum game; for every winner, there is a loser.

That's an excellent point, and one few people know.

All that gold mining caused inflation. But inflation wasn't understood back then. They thought gold was wealth. So huge efforts were put into gold-mining projects. Remember, this was in an era before cheap transport. Most transactions were local. Most long-distance shipping was for luxuries - silks, spices, gold, jewels, and such. So the country was expending resources developing colonies and gold mining, and becoming poorer by doing so.

Today, despite much noise from the "gold bugs", gold is just a commodity. Its price in dollars has varied over a factor of 6 in the last 20 years without affecting much.

That's illegal for mainland China residents.

Something that so many Bitcoin fanatics don't get: the use of Bitcoin in China wasn't because people wanted Bitcoins. It was because they wanted dollars, euros, or yen, outside China's exchange controls. Bitcoin was, briefly, an easy and legal way to do that.  That's over.

It's a tough question. If Mt. Gox had been a licensed payment service under the Payment Services Act in Japan, then the money belongs to the customers, and if it "disappears", that's theft.  But Mt. Gox wasn't registered, and the Japan Financial Services Agency declined to claim jurisdiction.

If Mt. Gox had been a bank, then they would have been covered under the Japan Deposit Insurance Company policy up to Y10 million. But Mt. Gox wasn't a bank; they don't get that coverage.

I've seen legal opinions both ways on this. This matters; it determines whether Karpeles goes to jail, as well as the order of priority of creditors.

That's backwards. The Winkelvoss Bitcoin ETF is a dump, not a buy. They bought the Bitcoins a long time ago. The ETF is a way to sell them.

The biggest one is simply that the liquidation runs its course. Mt. Gox gets investigated. Bank records are checked to find out where the missing cash went. Enough info comes out to implicate Karpeles. Mark Karpeles gets arrested. The standard Tokyo Metropolitan Police 23-day interrogation makes Karpeles tell where he hid the assets. Karpeles goes to jail for many years. Most of the assets are recovered.

The Sunlot proposal looks like a desperate attempt to gain control of the investigation and prevent that from happening.

Is there a deliberate attempt here to troll the forums to prevent discussion of the merits (or lack thereof) of the proposed Sunlot deal?

More and more, Bitcoin looks like a Pink Sheet stock. Trading continues, even though there's no asset value behind it.

The fundamental problem with Bitcoin is that unidirectional money transfers to remote anonymous parties are the con man's dream. Most "Bitcoin enterpreneurs" seem to be con men. Over half the Bitcoin exchanges have gone bust, even though that should be a low-risk business. Most of the sellers of mining hardware seem to be unable to reliably make, sell, and deliver ordered hardware. The "Bitcoin stock markets" are a joke, and the "Bitcoin Ponzis" are just embarassing.

Bitcoin has become the clown car of money because of all this.

The underlying technology isn't bad. We're about 2/3 of the way there to something that might work. The first generation of crypto-currency was Chaum's DigiCash in the early 1990s. This had protection against double-spending, like Bitcoin, but it relied on a centralized ledger system. Bitcoin is basically DigiCash with a distributed ledger, the block chain. DigiCash failed because of Cham's differences with his backers, and because it was too early. 

With Bitcoin, you still have to trust the receiving party when you order something. From recent experience, that doesn't work. The protocol could in theory be extended to support escrow and arbitration, but it hasn't been.  That's the remaining 1/3 of the problem.

What we have now is too slimeball-friendly.

That's exactly it.

1. The Sunlot deal gives them 84% of any missing assets that turn up later.
2. They're in talks with Karpeles.
3. The original founders of Mt. Gox are involved.

So they probably do know where the missing assets are.

This deal needs to be put on hold until the bankruptcy trustee and the Tokyo police have had more time to find the money.  The trustee has only had a week of being in charge at this point.

Some people haven't been reading the difficulty graph.