Posted on 02/25/2014 8:42:32 PM PST by BenLurkin
In a stunning blow to a novel way to buy products and services, the world's largest exchange for trading bitcoin currency shut down Tuesday, triggering a massive sell-off and sending many prospective investors away — perhaps for good.
"This is extremely destructive," said Mark Williams, a risk-management expert and former Federal Reserve Bank examiner. "What we're seeing is a lot of the flaws. It's not only fragile, it's fragile as eggshells."
The mysterious circumstances that triggered the failure of the exchange, Mt. Gox in Tokyo, is only adding to the renewed anxiety over the virtual currency, which just a month earlier had been gaining momentum and supporters.
(Excerpt) Read more at latimes.com ...
http://en.wikipedia.org/wiki/Tulip_mania
4 centuries ago it was Tulip Mania. Some things never change.
Stupid idea anyway and I’m surprised it lasted this long...
Think of BitCoin mining as finding prime numbers. Ok, you start off early and there are tons -- numbers 2, 3, 5, 7, ... you register your discovery and only you has access to those numbers. Now others want to find prime numbers too, and they do, but they can't register your numbers, they have to search harder ... the more people into the mix the harder it is to find the unique numbers that make up the BitCoin algorithm.
Each number found is totally unique, and it is registered. Its value is assigned what the market thinks it is worth. The fact that this exchange closed, I'm wondering if there was external pressure to do so.
I really disagree. Explanation above. Not convinced of having government in control of the currency is in the best interests of the people.
....as it rebounds over $100 today
“Many Bitcoin backers insisted there was a silver lining to the collapse. Bad firms like Mt. Gox would be weeded out and replaced by trustworthy ones that would make bitcoin more credible and secure, they argued.”
That sounds like the typical Libertarian/Austrian crowd. The same people who were crowing a few weeks ago about what a success Bitcoin was.
It ought to have a valuation based on something real and tangible...
Like the American Dollar!
/s
Ha! — Exactly so!
Well...it wouldn’t be a government entity...would it? Oh no, they’d never do such a thing.
So maybe it is a cabal of bankers....but no, they are so respectable, they’d never do this.
Who can it be?
Did George Soros collapse this??
I’m thinking you are right on.
Agree. I think we will still be investigating this.
You aren’t kiddin.... I just looked at its pricing.
Once again today its got 22% variance on the day.
PT Barnum Was Right.
That has gotta bewilder the hand wringers - how is this kind of support possible?
Is Gold truly different? I understand it also has industrial uses, but I don't believe that is significant in setting its value.
In related news, my herd of Unicorns escaped from the barn last night. Dang.
Which is one of the classic definitions of money:
http://projects.exeter.ac.uk/RDavies/arian/origins.html
Functions of Money
Specific functions (mostly micro-economic)
Unit of account (abstract)
Common measure of value (abstract)
Medium of exchange (concrete)
Means of payment (concrete)
Standard for deferred payments (abstract)
Store of value (concrete)
General functions (mostly macro-economic and abstract)
Liquid asset
Framework of the market allocative system (prices)
A causative factor in the economy
Controller of the economy
Since I believe that no State shall make any thing but gold and silver coin legal tender in payment of debts, I’m not at all surprised.
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