Bitcoins : Mt. Gox gone bankrupt

[mistermack]

Just looked a few more times. The price stopped dead at $800, stayed at EXACTLY that for a while, and then suddenly jumped back to $670.

Is somebody from there reading Rationalia?????
It's mental.

[macdoc]

Even the mining is effectively speculation. It's only worth paying for the computers to do the work (which is not doing any genuinely useful activity for the benefit of society) where the value of the currency is maintained or increases. The coins you mine are mostly given value by other people paying their own money in. When you cash out what you've primarily done is take money form other people for no real benefit.

hehe you could describe gold mining in the same terms and any speculative activity after the currency is chosen.

You could say the same for a jeweller who marks a diamond up 400% for no real benefit.

Resources are used to create an artifact of use for the purposes of trade with built in M3 controls.

Lots of things including cash are used for illegal purposes - that is irrelevant.

Banks have gone under due to illegal activities

HSBC pays record $1.9bn fine to settle US money-laundering ...
www.theguardian.com › Business › HSBC‎
Dec 11, 2012 - Bank guilty of 'blatant failure' to implement money-laundering controls and ... as the bank was forced to pay a record $1.9bn (£1.2bn) to settle allegations it ... The Department for Business, Innovation and Skills, which Green represents, said: " The report by the US Senate sub-committee sets out in detail the ...

Russian Bank Closed Over Alleged Money Laundering - WSJ.com
online.wsj.com/.../SB1000142405270230365300457920964316858681...‎
Nov 20, 2013 - Russian Bank Closed Over Alleged Money Laundering. Central Bank ... We were forced to take this as last-resort measure." No one could be ...

Do you know why the New York Stock Exchange used 1/8 designations for stock values until recently?

[PsychoSerenity]

You could say the same for a jeweller who marks a diamond up 400% for no real benefit.

And I would. That is the real problem. The system allows individuals to take out a vastly more of the wealth created from trade than their contributions help to create, and the greatest advantage goes to those who have the most to begin with. That is the point where it becomes zero sum.

I'm not arguing in favour of the banks or our present system at all. But the fact that its corruption harms society doesn't mean it can be solved by a free-for-all. If you want a system that actually benefits civilisation beyond what we've currently got, it needs to allow resources to be traded equitably rather than 'freely' so they get to where they are needed rather than where the wealthy can pay for them to go. And it needs to have very strong regulation to prevent speculation and malicious resource extraction. Bitcoin solves none of these problems, if anything it makes them worse.

[MrJonno]

When the army is paid in bitcoins and threatens to arrest/shoot you when you don't accept them then I will take bitcoin seriously. It's because fiat currencies are backed up by ultimately the threat of governments/military that makes them useful

[mistermack]

Just had a look, and the preev.com website is no longer giving any price at all for LocalBitcoins.

It might be just a blip, but it did seem that there was something going on.
Saw This today, people arrested in Florida of money laundering through LocalBitcoins.

It hints that it might get shut down, and that would just leave two world exchanges for bitcoins.
Maybe that's a bit premature.

Anyway, it hasn't affected the price on the other two exchanges. That has risen strongly in the last couple of days.

The story gives a hint as to the reason for LocalBitcoins higher price.
Criminals are paying a premium, for the transaction, to launder their money, and dealers are acting as money launderers, making a good profit, and turning the money around for a higher bitcoin price, which includes their ''fee''. So they are paying the higher price for anonymity.

[pErvinalia]

Doesn't that really mean making money off others who lost some?

wealth creation is not a zero sum game.

Is mining crypto currency "wealth creation", though?

[MrJonno]

Another Exchange has been robbed/shutdown/was a con in the first place

http://hereisthecity.com/en-gb/2014/03/ ... ck-attack/

[mistermack]

Doesn't that really mean making money off others who lost some?

wealth creation is not a zero sum game.

Is mining crypto currency "wealth creation", though?

It is. There is a market for the product, and they are supplying that market. Bitcoins are wealth, until they are unwanted. How long that will be remains to be seen.
But they don't wear out, or need a bank vault to keep them in, so they compare well to other forms of wealth.

[pErvinalia]

There's a difference between "wealth" and "wealth creation". I'm not sure how wealth is being created here. When I buy for $100 and sell for $200, someone (or multiple someones) has to pay for that $100 in direct losses. Nothing is being created within the bitcoin system, as far as I can tell.

[MrJonno]

But they don't wear out, or need a bank vault to keep them in, so they compare well to other forms of wealth.

They compare badly because their is no force (government or nature) behind them to ensure they are worth something.

Food is worth something as everyone needs it, The $/£/E is worth something because if a government runs out of resources it can use increase taxes or just use tanks to take property

Why exactly are bitcoins worth something other than to people who sell mining gear?

Bitcoins are exactly like Seth's natural laws, they only exist because a few nutters say they do

[mistermack]

There's a difference between "wealth" and "wealth creation". I'm not sure how wealth is being created here. When I buy for $100 and sell for $200, someone (or multiple someones) has to pay for that $100 in direct losses. Nothing is being created within the bitcoin system, as far as I can tell.

It's a hazy concept. But MINING new bitcoins, is a bit like mining gold. People want that product.
Whether mining gold is actually creating wealth is debatable, I guess.
But mining bitcoins is no different, really. People want to buy what you mine.

[MrJonno]

Whether mining gold is actually creating wealth is debatable,

It's not debatable any more, you can only mine it at a profit is you aren't paying for the electricity.

Running a business from your own home is often illegal in many places without permission so you are probably cutting some costs there too

[mistermack]

Whether mining gold is actually creating wealth is debatable,

It's not debatable any more, you can only mine it at a profit is you aren't paying for the electricity.

Running a business from your own home is often illegal in many places without permission so you are probably cutting some costs there too

Macdoc is mining Litecoins, I think, which might still be economic.

It won't be long before there are brightcoins, nightcoins, and shitecoins.

[pErvinalia]

"shitecoins"

[PsychoSerenity]

There's a difference between "wealth" and "wealth creation". I'm not sure how wealth is being created here. When I buy for $100 and sell for $200, someone (or multiple someones) has to pay for that $100 in direct losses. Nothing is being created within the bitcoin system, as far as I can tell.

Something is being created. A mechanism for trade that (mostly) avoids the authorities. And that does have value to certain (primarily criminal) individuals in society, - though the value to those individuals may come, through their external interactions, to the detriment of society as a whole.

At the same time as you say, when you buy for $100 and sell for $200, some of that is coming from others in direct losses. What percentage is coming from other's losses, from value to individuals directly harming society, and from value to individuals for more positive purposes, is impossible to calculate. But it's not hard to make some reasonable guesses.

The extreme increases in wealth for those that may have been in it from the beginning compared with anyone who joined later, the volatility rending it almost useless for normal trade, the high incidence of criminal activity that has so far been found, and the collapses in the markets, all suggest that there is very little value being created that is beneficial to society. There probably a small amount, maybe around 10%, that is value to the benefit of individuals trying to avoid the authorities. The rest is speculative multiplication of that value in a big bubble, i.e. other's losses.