Sure, there's a piece of a solution for everything. But it's unreasonable to expect someone to put all those pieces together. A program that produces cut-apart paper wallets with barcoded public and private parts would be a great part of a solution.

That's probably a better idea. However, to make that work, people would have to know a key to encrypt messages to Goat with and would need a contact address at Tormail. This scheme could have been made to work, but it would have required a process like the following:

1) GLBSE suspends trading and deletes orders on Goat's assets. GLBSE gives its customers who hold Goat assets a message saying that the stocks are in the process of being delisted by GLBSE, that trading is suspended, and that a claim process will be offered as soon as possible.

2) GLBSE and Goat work out a redemption plan. They decide if there's a fixed timeframe for claims, who will handle the claims, how they will be sent, and so on.

3) GLBSE forwards to asset owners a letter from Goat documenting the agreed redemption plan.

That it does not seem GLBSE even attempted this is a *big* problem. That GLBSE doesn't have a policy on how delisting will proceed is a *big* problem. That GLBSE appears to completely disregard its obligation to secure its customers' ownership interests in their assets is a stunning problem.

This is, of course, assuming that they didn't attempt to work out a delisting agreement with Goat. We haven't heard GLBSE's side yet really. But they better say something soon, because it looks *really* bad. Goat has already publicly stated that he has no problem with them issuing a statement. But it's possible they have information they can't share with us that might change this view. But GLBSE, heads up, this is a serious PR problem. You need to do something about it.

That's extremely inconvenient. But you could probably draw a bit of a compromise and use a scheme where any time you need to get money from one of your paper wallets, you empty it and put the change (if it's a large amount) into a new paper wallet. If you need a larger amount, you grab multiple paper wallets and empty them all. That's still pretty inconvenient though.

But their claim code scheme makes using a cut out almost impossible. If someone uses a cut out, what happens if the cut out tells them that Goat said the claim code was already used? If the idea of the claim code scheme was to facilitate using a cut out, it's even more poorly designed than I thought.

Primarily how you securely withdraw from it. It's not bad for long-term storage.

I don't understand why people would prefer to exchange something other than what they prefer to hold. Any argument that the additional hold value would make people less willing to part with it equally well argues that others would be more willing to offer them benefits in exchange for it. The added inefficiency of not exchanging a currency one likes to hold should tip the balance in favor of all parties preferring to exchange whatever is best to hold. (Since they can then either hold or exchange it with no conversion required.)

In many countries, banks are insured by government agencies. That's pretty close to fool proof. You can also hide fiat and/or lock it securely. Of course, that's not 100% reliable, but its risks are very easy to understand and not that difficult to reduce. People have many years of experience protecting fiat and have gotten very good at it. It's rare for a person to be a victim of a large theft of fiat.

The problem is that there's no good way to keep your coins secure. It's not so much a matter of blame -- it's just that there's no good way to keep your coins secure. Every reasonable suggestion I've heard is so complicated it's just not practical. And there's no good way to balance being sure you don't lose access to your own coins with being sure nobody else gains access to them. This is one of the two biggets problems facing Bitcoin today.

Try this thought experiment: Reason out an explanation of how to securely hold thousands of dollars worth of Bitcoins such that a typical American adult with somewhat above average computer skills could understand the process and the reasoning behind each step.

This is a strategic decision. Think about it. Now that the Internet is here, not even the most repressive government can keep their citizens from blogging and reading western media. But that only happened because the Internet got here.

You have just exhausted my ability to presume you are arguing in good faith. Have a nice day.

I believe your position is blatantly unreasonable and I would be shocked if GLBSE took this position. This leaves GLBSE's customers with no recourse whatsoever if Goat says, "Sorry, that code wasn't on the list I got from GLBSE." I cannot believe GLBSE would construe their agreement with their customers as allowing them to do that. But if it surfaces that they share your position, I will begin recommending to everyone who will listen that they refuse to do business with GLBSE since GLBSE seems to be shirking their primary obligation -- to secure their customers' ownership interest in the assets they purchase. I would consider GLBSE taking this position reneging on their agreement with their customers.

I thought we had already agreed that this was insufficient. Specifically:

1) It doesn't allow the issuer to contact the owners. This makes a two phase redeem impossible. There is no way other than a two phase redeem to avoid having to honor a claim code twice.

2) It gives the issuer no way to handle earnest claims that don't match the list of codes.

Didn't you agree that this was insufficient? What happens if an asset owner sends a claim code and the issuer says that claim code wasn't on the list? They claim the issuer is scamming. The issuer claims the code wasn't on the list. How can that possibly be resolved if GLBSE doesn't assist?

It seems it has just changed and you are back to the position I thought I had argued you out of.

True.

If Goat is unable to get GLBSE/Nefario to work with him in private, what else should he do? I am not saying that Goat's conduct has been a shining example of reason and patience, far from it. However, GLBSE's complete abandonment of its obligation to protect its customers' interest is, frankly, stunning to me. From where I'm sitting, it doesn't look like Nefario/GLBSE has lifted a finger to help those who held Goat's assets, their customers. This is a much bigger deal. (Although, it's entirely possible that GLBSE is trying hard to work with Goat in private and Goat is stonewalling. I don't know. I'm just trying to provide a fairer balance.)

GLBSE's position seem to be that as soon as they delist a stock, which they can do at any time for any reason, they have no obligation whatsoever to the holders of that stock. That despite the fact that they're the only entity that can communicate with them and there is no known way to redeem the assets without their cooperation. There also seem to be no controls on who can order a delisting and who decides how customers' interest will be protected. There is no evidence GLBSE/Nefario thought for even a second about the collateral damage a delisting would cause, and it appears that nobody did. This is completely unacceptable and goes way beyond the present issue with Goat.

I agree. But this doesn't really hurt gold or silver. In fact, it tends to make them better investments.

Sadly, it seems that the only way to learn that you can't spot a scam is to become the victim of one. Until that happens, everyone thinks they are a better judge of character than they really are. And professional gamblers, particularly Poker players, have to learn how to read people and spot scams. Patrick is 100% wrong on this. (It's not so much that people are stupid or naive. It's just that they don't realize how good con artists are at manipulating people. Education doesn't really fix that, only experience does.)

That really doesn't answer my question.

Okay, so then is this what happened:

1) Goat and Nefario talk in private.

2) Goat claims Nefario is holding his bitcoins hostage.

3) Nefario publicly claims that all he needs is a withdrawal address and he'll pay Goat back.

4) Goat publicly says to Nefario/GLBSE that if all he needs is a deposit address, here is one. Now pay me.

5) You claim this is evidence Goat was lying back at 2.

If Goat was telling the truth back at 2, isn't what he did in 4 exactly what you would expect -- calling Nefario's on his claim?

It is, by the way, entirely possible that Goat and Nefario simply came back from the discussions at the beginning with different impressions. Goat may genuinely have believed Nefario expected concessions for him to get the undisputed coins back and Nefario genuinely believed he had simply asked Goat to direct him how to repay him. Everything I've seen after that is consistent with this, and we do know that communications broke down at least to some extent.

I believe that Nefario was making Goat conditional offers to return the coins that Goat reasonably interpreted as waiving some of his claims against GLBSE. So Goat did exactly the right thing -- he put an unconditional request for the return of undisputed amounts on the table. If you have any evidence that Nefario or GLBSE ever offered to return the funds that didn't require Goat to waive claims he considered legitimate, please cite it. But the lack of such an offer can reasonably be described as holding the coins hostage.

Goat is documenting his side in the forums in great detail. That makes it very easy to find some minor thing you think is inconsistent. And you keep imagining perfect conduct on the part of GLBSE and Nefario, despite their total silence. If Nefario or GLBSE made an unconditional offer, let them say so. Otherwise, it's grossly unfair for you to imagine that they must have been perfectly willing to do the right thing all along.

By the way, I'm not sure how you figured that this was the first time Goat offered him an address to send the coins to. This may have been one in a long series of similar requests from Goat, just the first he chose to make public. I don't know either way. Without Nefario or GLBSE's side, we can only guess. And again, it appears you made the assumption most unfavorable to Goat. You may know. You may be right. But the rest of us don't know.

Do you at least agree that now there is no excuse for Nefario/GLBSE not returning to Goat amounts that are not in dispute?

In a healthy economy, rational people should prefer a slightly deflationary currency if they have a free choice. Basically, someone would prefer to hold an asset that was increasing in value if they had a choice. A free market economy should only produce predominantly inflationary currencies if there is somehow too much long-term investment and not enough short-term consumption. This could happen due to a crisis such as a collapse in the housing market. It's hard to say though because we've never had such a market. Perhaps the demand will create a new kind of currency (like Bitcoin was a new kind of currency) that can tap into supply and demand to optimize its inflationary/deflationary characteristics to balance investment, consumption, and savings. To date, currencies for modern economies have always been fixed or centrally controlled. Free market currencies are in their infancy.

Hopefully, people reading this thread will learn two very important lessons:

1) High yield with low risk basically doesn't exist. As the E*TRADE baby says, the probability that any such scheme will actually work out is about the same as the chances of you getting mauled by a polar bear and a regular bear on the same day.

2) Most likely, you are not nearly as good a judge of character as you think. You are used to being in a world where most people you encounter are not out to scam you and where there are very real consequences for dishonesty. But you acting in a world that is fully of scammers and where there don't seem to be consequences for dishonesty. Con men know how to exploit this and are very, very good at it. (Watch a few episodes of The Real Hustle sometime.)

Also, for what it's worth, I think Meni was very careful to try not to vouch for the repayment of the bonds. His involvement did add a credibility, and I think he came through with what that credibility promised. He acted, and continues to act, as an advocate for the bond holders. I think he made some very bad decisions, trusted some people he shouldn't, and suffered as a result of people who took advantage of him. The list of good people who have done that is pretty long. I made a mistake like that myself not too long ago. Hopefully, each person will only only need this lesson once. (Actually, now that I think about it, I actually made this mistake twice, and both times over five figure dollar amounts. So I know how easily people can be made into suckers. *sigh*)