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Author Topic: 2013-04-12 ZeroHedge: 11 economic crashes happening RIGHT NOW... #1Bitcoin  (Read 778 times)
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April 13, 2013, 11:39:44 AM

Quote from: TylerDurden
The following are 11 economic crashes that are happening RIGHT NOW...

#1 Bitcoins

As I write this, the price of Bitcoins has fallen more than 70 percent from where it was on Wednesday.  This is one of the reasons why I have never recommended Bitcoins to anyone.  Yes, alternative currencies are a good thing, but there are a lot of big problems with Bitcoins.  Why would anyone want to invest in a currency that could lose 70 percent of its purchasing power in just two days?  Why would anyone want to invest in a currency where a single person can arbitrarily decide to suspend trading in that currency at any time?

An article by Mike Adams of Natural News described some of the things that we have learned about Bitcoins this week...

#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.
#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a "cooling period." This is nearly equivalent to a financial dictatorship where one person calls the shots.
#3) Every piece of bad news will be "spun" by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a "victim of our own success!" So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A "raging" success?

#2 Gold
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April 13, 2013, 11:51:01 AM

So much fail. Oh well, this means more cheap coins for us, yay  Cheesy

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April 14, 2013, 04:29:59 AM

Yes, but I can agree with them on the part regarding Mt. Gox's utter public relations failure and insensitivity to its customers in saying they were a "victim of our own success".  If anything, they were victims of Bitcoin's success, not their own.  Mt. Gox needs to hire more competent management/public relations & programmers with Wall Street experience so they can rewrite their trade engine, deliver more reliable data feeds and better protect against DDoS attacks, etc.

Also, Mt. Gox should know better by this point.  A firm managing finances should not refer to its customers as "you guys".  We are not little kids trading cards (i.e., Magic the Gathering Online Exchange), but adults who have entrusted our money to them, which is pretty serious.  This requires a much higher level of professionalism.  Hopefully Mt. Gox learns from their mistakes gets its act together, or else the price will continue to fall.

In the meantime, let's develop infrastructure for other exchanges, and support them by bringing our business and trading volume to exchanges such as Bitloor and CampBX.  In addition, I look forward to the openings of upcoming exchanges such as KRAKEN and Coinsetter which I hope will develop better platforms and draw additional people.

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