LOL people are so flimsy. Did you not expect grand events like this as Bitcoin rises? Did you not expect calamities?

There was no issue with the Bitcoin protocol or code. It was one business (albiet a very important one) that was hacked. Many more will be hacked! Many more will lose money in the ups and downs of a volatile new market. Have some nerve for crying out loud.

Bitcoin is just getting started, calm the F down. And PM me if you want to sell me your coins.

The number of coins that actually left MtGox is small and limited, so while those may be lost for good, the vast majority of the big theft are still with them, and reversing their trades will repair most of the damage. Perhapt Mt. Gox will personally compensate the remaining amount from their own wallets?  

I think it's good this is happening while bitcoins is still so new and "fledgling." It's still in Beta. Anyone who didn't expect crazy stuff like this was naive, but the Bitcoin will emerge stronger. Stronger exchanges, stronger passwords, and lots of new information.

The market will heal.

I can confirm from someone I know that bitcoins were indeed bought at the $0.01 price based on a standing bid that had been there. These coins were then transferred out of mtgox for obvious reasons and have showed up in the wallet, so they're real. 

I guess any standing orders at the low prices were filled if they were "first in line at X price" and trade did occur, and the coins are real.

The question is, whose coins were sold at $0.01?

Let's all stop hating on big corporations. At least trade and interaction with them is voluntary. We can moan about Paypal and eBay fees and policies, but both have revolutionized the world and I would argue deserve a fair amount of respect. Silly to hate on a company that coerces nobody. Disagree on policies, yes, but to call them "evil?"  If eBay is evil, what does that make the Federal Reserve? 

False. You're forgetting that Bitcoin is also a software system that allows ledger transactions to be sent and validated with no central authority. THAT in itself is a huge achievement, and provides a great deal of that "purpose" you seek.  It's easy to confuse these things, of course, because Bitcoin is the name for both the software system and the currency used in that software system. The two should be understood separately, and the latter derives its original value from the former, and it's long-term value from the supply and demand of that original value. Make sense? =)

Gold and silver have use as jewlery and in industrial purposes. Bitcoin has use as a recording and validation mechanism for transactions.  Gold, silver, and Bitcoin all additionally have value as monetary instruments due to their properties.

Standard rebuttal because it's valid, and it does not presume that Bitcoins will be as successful as cars. The rebuttal is simply drawing a reasonable comparison that all great inventions had massive challenges to overcome, many of which the people of the day said were insurmountable.

The difference between Bitcoin and Bernie Madoff's scam, was that Madoff's scam was a scam, and anyone looking deeply at the records could figure that out. Now, might there be something hiding in the Bitcoin code that we've missed? Sure! But you're presenting problems that are entirely solvable, and basing your conclusion that Bitcoin will fail on those problems. Again, it's like saying we'll never go to space because there's no air.

Bitcoin could fail for a fault in its code. It could fail because the government totally stomps it out. It could fail if a better system came along. It could fail if Austrian economics is completely wrong. However, it will not fail because wallets aren't yet encrypted, nor because Mt. Gox has a hard time handling the present volume of transactions.

Shinobi, how can you not see that it takes but a few skilled entrepreneurs to solve the problems you pose? Already TradeHill was created just a couple weeks ago. Dozens more will pop up. I must ask, were you similarly confounded by the seemingly insurmountable problem of a car's inability to drive in the rain, before the marvelous windshield wiper was invented?



You miss the entire point of Bitcoin. Much of its value is the very fact that there is no central group or organization responsible/liable for it. If GoogleCoin came out tomorrow, I might buy some for speculation, but I would not sell my Bitcoins. The unbranded, decentralized, no-single-point-of-failure-or-arrest that is Bitcoin is the brilliant, revolutionary concept. My goodness, it should not be so hard to grasp.

And lest again I point out the wobbly, full-of-problems "internet" in the early 90's, when the powerful, branded, backed-up America On-Line was available.

That is not duplication of Bitcoin. Namecoins and funcoins are different commodities with different properties. Just like silver and copper are alternatives to gold, but are not the same. The marketplace will observe all alternatives and value them as it wishes.

Unless there is some bug in the code of Bitcoin, and coins can be "printed" at whim, then it is a valid, scarce commodity. Similarly with gold, unless some chemist creates a way to cheaply produce artificial gold (which would be no different than real gold since both are the same element) then gold will remain a valid, scarce commodity.  Both gold and bitcoins are limited, and both have alternative substitutes in the marketplace.

Patently false. Backing requires a promise of exchange - a promise to exchange one thing for another. When dollars were backed, the US Gov promised to exchange gold for those dollars. When private banks distributed paper notes that were backed by silver, they promised to exchange silver for those notes.

The concept of "backing" requires a specific party to be the "backer," and with Bitcoin would thus remove one of its primary advantages - that it is not the liability of any specific party. 

You mean paper dollars were backed by gold, because gold is real money. And gold is "real money" because it's been chosen by the marketplace to act as such, due to its properties that make it effective as money.

I think society has been so far removed from open markets that it doesn't understand how they work.

If all traders expect the price to fall on the weekend, they will sell earlier, and buy into the weekend. This will push the dip earlier in time, and in the long run will level it off and make it disappear completely.

This is a great example of how "evil speculators" actually make markets more efficient and smooth out the variance. The physical constriction of MtGox wire limits, and weekend bank issues, is being smoothed over by speculators who are each trying to profit on that known constriction.

Markets FTW

True. And similarly, Bitcoin has unique properties. It shares some of these properties with gold (divisibility, homogeneity, scarcity, etc) and has unique ones additionally (instant transfer across thousands of miles, a billion dollars-worth can be put in your shoe, it's not subject to supply fluctuations, etc.).

Both gold and btc are valuable as money precisely because of their unique properties. Neither needs to be, or ought to be, or even can be, backed by another commodity.

Yes let's compare Bitcoin's security holes to those of the internet itself in the 90's, and still today.

I have an awesome solution for your "game ending security hole" of unencrypted wallets... the solution is to encrypt wallets!

The OP is the same kind of person who would've dismissed the crazy motor car because gasoline explodes. Do you know that in my great grandmother's college science textbook, it told her that man would never venture into space because there was no air?

Give free markets a chance to solve problems and they tend to do so.

Every letter that goes to them like this one is good, and while I think the letter should've been proofread by a native English speaker, the raw authenticity of it perhaps makes it more compelling =)

It is sucks... hahaha that's how I feel about our current fiat monetary system as well!

Good insight. Not being a liability or responsibility of any party is where Bitcoin derives some (but not all) of its value.

LOL  the Starcraft Prediction Metric!!!!  BUY BUY BUY

That statement is a contradiction of itself, no? =)

People do behave in predictable patters... however this doesn't mean one can precisely predict individual choices.

Case in point - if I throw a $10 bill on the ground, we can fairly accurately predict that someone will pick it up. However, we can't quite predict who, or when. When I say predictability, I don't mean 100% accurate... and we don't perfect accuracy to make predictions that are valuable.

You propose backing Bitcoins with something of value, and then suggest the USD as that backing? One of the primary draws of Bitcoin is that it's an alternative to the dollar, which is manipulated at whim by the Federal Reserve System. The dollar is fiat - it's mandated to have value by the coercion of government. Bitcoin is not fiat, because it is chosen openly in a free market as money.

Further, your proposal is not actually backing Bitcoin in the meaningful sense of the term. For something to be "backed" it means there is a guarantor of another good for the one in question. When the dollar was backed by gold, the US government guaranteed to hand you a fixed amount of gold for your dollar. Unless I misread your proposal, no party is guaranteeing payment of dollars in return for Bitcoins.

Further still, the notion of "backing" is silly, unless you're using something like paper as a substitute for another good that has "real" value. Bitcoins has "real" value by itself, because it offers a revolutionary distributed payment system, and is allegedy secure, and is fast, and almost free to use, etc.

Further still again, gold is not backed by anything, and yet remains a great and valuable money commodity.

A great money doesn't need backing, because it IS valuable in its own right. Bitcoin is indeed valuable, for the distributed payment mechanism (among other features) mentioned above.

Are you joking?! Bitcoin is WAY more important than just some neat tech innovations. Politics, economics, even philosophy have been involved in these discussions and I think it's great. Bitcoin, if nothing else, is disruptive, and there are a whole world of effects that need to be explored.

Noobs being scared about Bitcoin shouldn't bother anyone who is secure and confident about their own reasoning for standing behind the currency.

Sorry this is nitpicky, but that statement IS true if one really "holds all else equal." By holding all else equal, one is cancelling out price elasticities and time preferences and thus a doubling of quantity would equal a halving of price.

However, in the real world one can never hold all else equal, so it's correct to say that just because money supply doubles, it does NOT mean prices will double. This is because price elasticity curves are not linear, they are curved - and people will thus behave in a predictable, but not linear, pattern.

But I concur with your general sentiment, OP