Post Gox - Is it time for a Bitcoin Code Authority and self-regulation?

[lorix]

The only regulation that would make sense would be some kind of self regulation based on math and p2p networking.
Until someone finds a way to make that happen, we got nothing.

Seriously, the regulation people are talking about belongs to the old world. It has no value when it comes to crypto currencies.

It's not complicated, these tools do exist in the form of the blockchain.

A voluntary certification would work in the same way a "Heart Foundation" tick is included on product packaging. Companies agree to be audited and comply with business practices in line with the standards defined by a quorum of public, peers and competitors. Nobody is forced to join, but having the certification logo published on your website (and cross-listed with the authority so it is verifiable) will serve as an assurance that certain publicly verifiable criteria have been met.

[grifferz]

This bank was regulated and still lost over 100 billion $:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372/RBS-has-lost-all-the-46bn-pumped-in-by-the-taxpayer.html
Some people are stealing money regulated.

I don't know about the UK but US regulated banks are insured up to $100K+ per customer per bank, I think the rate has increased

if that was the case for the Mt Gox situation most users would have been covered.

And I don't know how that works in the US, but when this UK bank lost all its money no customers of it directly lost out, because of government regulation. Instead we all paid for it as part of increased taxation. That doesn't sound desirable with bitcoin even if it ever were possible.

[EndTheFed321]

I`ll regulate it for you just send me .000001 BTC

Hell NO! WE DO NOT NEED BTC to be regulated at all 

[lorix]

This bank was regulated and still lost over 100 billion $:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372/RBS-has-lost-all-the-46bn-pumped-in-by-the-taxpayer.html
Some people are stealing money regulated.

I don't know about the UK but US regulated banks are insured up to $100K+ per customer per bank, I think the rate has increased

if that was the case for the Mt Gox situation most users would have been covered.

And I don't know how that works in the US, but when this UK bank lost all its money no customers of it directly lost out, because of government regulation. Instead we all paid for it as part of increased taxation. That doesn't sound desirable with bitcoin even if it ever were possible.

The Bitcoin protocol effectively allows you to "be your own bank" for the want of a better phrase, if you have Bitcoin held anywhere else in trust (Like Gox) then you assume the risk of loss like any investor.

The USA $100K government protection for customers is designed to protect everyday bank users who keep their money in bank out of necessity - salary payments, savings, etc. It's not intended as a safety net for people who take market investment risks for profit gain.

[teukon]

The USA $100K government protection for customers is designed to protect everyday bank users who keep their money in bank out of necessity - salary payments, savings, etc. It's not intended as a safety net for people who take market investment risks for profit gain.

Then at the very least these bank accounts should be true deposit accounts, where the bank simply stores the dollars for you (does not lend/invest them) and charges a storage fee.

[reg]

   
Post Gox - Is it time for a Bitcoin Code Authority and self-regulation?

No-I will repeat that for the hard of hearing No, and finally just one last thought- No.

[verncoin]

Absolutely no, it would be catastrophic for the core ethos the coin was designed around.

[elvizzzzzzz]

I just had a look at the websites of several popular cryptocurrency exchanges.

Bear in mind that these things are essentially, banks. Once you give them your bitcoin,
it is theirs, for all intents and purposes. You are their liability from that time on. The
crisis in MtGOX is not a bitcoin problem, but a manifestation of the problem that bitcoin
is trying to solve.

It takes a fair amount to shock me, but the statements on web pages to the effect that
we will "prepare and publish quarterly accounts" with the "we" being the exchanges, is
just stunning.

I can understand conventional banks running on COBOL having problems reconciling their
books every day, but they try to do it. The thought that cryptocurrency exchanges would
think that publishing information only every quarter, is comforting to their customers shows
a disconnect between what is needed, and what they demand from their customers via
KYC and other questioning.

I see no reason why daily information cannot be published, and would welcome the exchanges
views on that. Similarly, much of the information asked for by exchanges from customers is
valuable in itself. If the exchange gets hacked, and customer data is accessed, the loss of
privacy may be more costly than any bitcoin stolen.

Something worth thinking about: without privacy, there can be no private property.

[lorix]

I see no reason why daily information cannot be published, and would welcome the exchanges
views on that. Similarly, much of the information asked for by exchanges from customers is
valuable in itself. If the exchange gets hacked, and customer data is accessed, the loss of
privacy may be more costly than any bitcoin stolen.

To take it a step further there is no reason such information couldn't be automated and available on demand.

This is exactly the point of making business operating at the fiat/BTC boundary self-regulate rather than wait for government regulation.

Just to be clear on my earlier posts - the Bitcoin Authority regulation is intended for the financial sector - exchanges and currency dealers like Gox where large sums of BTC and fiat are being traded and our problems currently lie.

I do not advocate regulation of individuals or businesses who privately exchange Bitcoins for goods and services.

Correct me if I'm wrong but I believe Andreas Antonopoulos himself said one of the main points of Bitcoin was to change the current paradigm and allow for visibility and accountability at the big end of the market, and opacity and anonymity at the lower end between everyday users. Or something to that effect. Peer regulation is simply an extension of that, the ability of the market to call out bad actors on their own who refuse to open themselves up to true public accountability.

[Armis]

Self-regulaton is not a promise that some representative can make. To be self-regulative would mean that it is a function of the network itself. The problem is that gox&childporn aren't the problems of currency but problems of specific markets and should be solved as such; we need an open market network with somekind of internal regulation (trust/voting) system implemented.

Don't solve problems with politics like the uncivilized non-crypto barbarians, solve it with technology.

Also:  Isn't the point of bitcoin precisely to destroy the need for trusted third parties, as we have seen in history that there really aren't any third parties that can be trusted.

Let me put this a different way for you pie-in-the-sky folk, it doesn't matter if the socalled protocol for btc is perfect, right now a REAL security issue has been identified, not the problem that MT Gox pointed us to, but the ability to trace 800K btc once controlled by MG, if the cryptocurrency community is unable to find the money then the system cannot and should not be trusted.

If that many Bitcoins could be stolen, missing, or untraced the protocol is unsafe for mass acceptance.   If we don't find the funds before the summer radical change must occur in the system to make up for the failings or weaknesses of the protocol. 

[exocytosis]

Let me put this a different way for you pie-in-the-sky folk, it doesn't matter if the socalled protocol for btc is perfect, right now a REAL security issue has been identified, not the problem that MT Gox pointed us to, but the ability to trace 800K btc once controlled by MG, if the cryptocurrency community is unable to find the money then the system cannot and should not be trusted.

If that many Bitcoins could be stolen, missing, or untraced the protocol is unsafe for mass acceptance.   If we don't find the funds before the summer radical change must occur in the system to make up for the failings or weaknesses of the protocol. 

Exactly!

[exocytosis]

Also:  Isn't the point of bitcoin precisely to destroy the need for trusted third parties, as we have seen in history that there really aren't any third parties that can be trusted.

How can the Bitcoin economy grow without third parties? How can Bitcoin go mainstream without third parties? Should every Bitcoin holder be required to lock down all of their coins in supercold storage? How does that facilitate trade? How user friendly is that?

I thought Bitcoin was supposed to be "the money of the internet", a quick, easy and safe way to move money across borders, making trade easier and cheaper. But with all the thefts happening, most hardcore bitcoiners say that no one can be trusted, and any significant amount of coins should be locked away in fireproof safes inside Faraday cages in steel vaults, just waiting (for years) for their value to somehow magically increase.
But an increase in value won't happen unless Bitcoin becomes userfriendly enough to be used by the Average Joe. And for that to happen, we need safe, reliable exchanges and other service providers (trusted third parties). And, in turn, for that to become a reality, we absolutely need some international regulations and safety nets securing and insuring the crypto-wealth people, for convenience, store on exchanges and online wallets.

Bitcoin must become co-opted/"compromised" by the powers that be -- if it's ever going to reach the mainstream. It must be legitimized, legalised and regulated by the central banks and other authorities many of us dislike and wanted to destroy. That's the only way to achieve truly widespread adoption.

Make no mistake: Mark Karpeles won't be the last exchange owner stealing people's money. This whole Gox thing was only a minor blow to the BTC economy, but when the owners of BTC-e or Bitstamp or other exchanges end up doing the same thing, the blow might just be a major one, hurting Bitcoin in the long-term.

[freebit13]

What about individual regulation? If you don't want to lose your BTC don't deposit it anywhere you don't own the private keys, simple. If one prefer a different regulation, one may just deposit it anywhere even not owning the private keys.

Just make your own set of rules whatever it be and take the responsibility for what you do.

I totally agree!

It's not up to Bitcoin to keep your bitcoins safe, just like it's not up to tcp/ip or "the internet" to keep viruses off your PC. Bitcoin is decentralized, there's no need to introduce a central authority to manage it. If they want to regulate anything then they should regulate bitcoin related services which in effect are just companies so they should follow some rules and have some accountability because they are taking people's money.

Bitcoin never took any money from anybody...

[lorix]

Let me put this a different way for you pie-in-the-sky folk, it doesn't matter if the socalled protocol for btc is perfect, right now a REAL security issue has been identified, not the problem that MT Gox pointed us to, but the ability to trace 800K btc once controlled by MG, if the cryptocurrency community is unable to find the money then the system cannot and should not be trusted.

If that many Bitcoins could be stolen, missing, or untraced the protocol is unsafe for mass acceptance.   If we don't find the funds before the summer radical change must occur in the system to make up for the failings or weaknesses of the protocol. 

Wrong.

The "safety" of the protocol has nothing to do with the Gox situation, as much as they might have wanted the public to think that. Nor was there an unknown weakness, the transaction malleability issue was known since 2011. The failing here as we are given to understand was they they didn't adjust their software to work around it and as a result got robbed blind. That is as inexcusable as if someone intentionally left their antivirus definitions 3 years out of date and then blame the antivirus software for having a fault when they get infected.

Is it a fault in Bitcoin if you logged onto an exchange website and your account there says the 1000 BTC you deposited is currently in your account with them? Because unless you hold the private keys yourself to those coins then the aren't yours. If your account is telling you that the exchange has your coins but you can't withdraw them, and then it turns out they were long gone then isn't that misrepresentation at best, fraud as worst?

I do agree with what you said about finding out where the BTC went, but we also need to find out what was going on behind the scenes at Gox. Hopefully there will be further leaks of documents from them so a proper autopsy can be performed here.

[darkmule]

I refer to the inception of the Comics Code Authority back in the 1950's. Have a look at the Wikipedia article about it if you want to know the details: http://en.wikipedia.org/wiki/Comics_Code_Authority

I could hardly imagine a worse example than the censorship body known as the Comics Code Authority, that bowdlerized and basically wrecked comics as anything but a corporate, commercial product for literally decades.  Unlike what Congress was considering, which would certainly have been found unconstitutional if fought in court, the CCA was not a government body and therefore not subject to constitutional review.  Therefore, it could basically do whatever it wanted, as it was a "voluntary" association.

Further, while some kind of self-regulation would be nice in Bitcoin, look at the leading lights, such as they are.  Even the Foundation supposedly set up to serve BTC interests turns out to have had some of the biggest crooks in the nascent industry on it.  Given past history, how would the community ensure that such an authority would serve BTC interests and not simply the selfish interests of the members of the authority?

[Armis]

Let me put this a different way for you pie-in-the-sky folk, it doesn't matter if the socalled protocol for btc is perfect, right now a REAL security issue has been identified, not the problem that MT Gox pointed us to, but the ability to trace 800K btc once controlled by MG, if the cryptocurrency community is unable to find the money then the system cannot and should not be trusted.

If that many Bitcoins could be stolen, missing, or untraced the protocol is unsafe for mass acceptance.   If we don't find the funds before the summer radical change must occur in the system to make up for the failings or weaknesses of the protocol. 

Wrong.

The "safety" of the protocol has nothing to do with the Gox situation, as much as they might have wanted the public to think that. Nor was there an unknown weakness, the transaction malleability issue was known since 2011. The failing here as we are given to understand was they they didn't adjust their software to work around it and as a result got robbed blind. That is as inexcusable as if someone intentionally left their antivirus definitions 3 years out of date and then blame the antivirus software for having a fault when they get infected.

Is it a fault in Bitcoin if you logged onto an exchange website and your account there says the 1000 BTC you deposited is currently in your account with them? Because unless you hold the private keys yourself to those coins then the aren't yours. If your account is telling you that the exchange has your coins but you can't withdraw them, and then it turns out they were long gone then isn't that misrepresentation at best, fraud as worst?

I do agree with what you said about finding out where the BTC went, but we also need to find out what was going on behind the scenes at Gox. Hopefully there will be further leaks of documents from them so a proper autopsy can be performed here.

My driving point was: 'don't get distracted by the malleability issue, or the ridiculous notion that the btc protocol is perfect, the focus should be on finding the money.

Let me put this another way it doesn't matter if Mt Gox was operated in prison by the incarcerated hackers using computers littered with viruses of all sorts, and everyone could do anything they wanted with the funds, the btc protocol must allow us to find, trace, or track all of the 800K btc that once existed in MT Gox.   It doesn't matter if it was stolen, got stuck in a hole, was put in cold storage, used to pay rent, etc ... we must be able to track it, trace it, and follow the money, that is the NUMBER 1 purpose of the block chain, and the blockchain is the core of the btc protocol.

If you don't find the money, then every exchange has a recipe for doing the same thing on purpose, over and over again.  

That's why if the problem isn't solved via the btc protocol very soon (before the summer), then a "work around" will be necessary -- exchanges will have to adopt very serious changes to INSURE safety, accountability, transparency, solvency, etc ...

As the title of the thread suggests it's either secure the system with code or with self-regulation at this moment we have neither, but only now did we realize that the king had no clothes we have until the beginning of the summer to fix this or else its back to single digits for btc with no hope for a rise without the safeguards.

[S4VV4S]

I must admit that I didn't even bother reading the OP.
Just the title was enough to say: NO

Let me say that again: NO

That is completely against the entire Bitcoin movement.

[Armis]

I must admit that I didn't even bother reading the OP.
Just the title was enough to say: NO

Let me say that again: NO

That is completely against the entire Bitcoin movement.

That is the very definition of the word prejudice -  making a determination on a matter without having reasonably sufficient info to draw a rational conclusion.

If the bitcoin movement is unsafe for worldwide consumption and only for a niche community then keep it to yourself, but if you want worldwide acceptance it must be safe.

[teukon]

But an increase in value won't happen unless Bitcoin becomes userfriendly enough to be used by the Average Joe.

Agreed.

And for that to happen, we need safe, reliable exchanges and other service providers (trusted third parties).

Yes.

And, in turn, for that to become a reality, we absolutely need some international regulations and safety nets securing and insuring the crypto-wealth people, for convenience, store on exchanges and online wallets.

No.  Market forces would cause safe, reliable exchanges to emerge with time.

[Lauda]

You get fooled by Gox multiple times, and you call for regulation for everyone? Please.
Should have stayed away, long ago.
Sorry, I do not support this.

There are other approaches to avoid an exchange taking your money.