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He has to be hyperbolic, he is asking for a huge favor. He is asking that bitcoin owners essentially donate coins to mt gox in order for them to clear their los
by hristov 13y ago
He has to be hyperbolic, he is asking for a huge favor. He is asking that bitcoin owners essentially donate coins to mt gox in order for them to clear their losses. So in essence he is asking for tens of millions of dollars (at least, maybe hundreds) of free money. And not for charity, but for a profit based enterprise.
This is a rather bold request. So to back it up he says the entire fate of bit-coin depends on this.
There is only a single line about preventing a run on mtgox, because (a) trading will only start when mtgox is (mostly?) re-capitalized and has most people's bitcoins. And the prevention of a run on mtgox is pretty straightforward and non-controversial ... just limit the amount of withdrawals.
I am pretty sure this document is the real thing. But one thing I cannot yet decide is whether he stole all or some of the coins or really lost them. The idea that he lost over 700K of coins over the years without noticing is very hard to believe. On the other hand if he did steal the coins, and now is asking for the community to donate them back to him, then he has an immeasurable amount of chutzpah.
- diydsp 13y agoThat really does illuminate an angle of the U.S. bank bailouts before... ..that "too big to fail" really is not about jobs or anything like that, but about maintaining faith in the currency.
- OnyeaboAduba 13y agoand stopping riots
- logicchains 13y agoName one historical instance of bank runs leading to riots.
- jmnicolas 13y agoWasn't it the case in Argentina ?
- logicchains 13y agoThe riot was because the government froze deposits so people weren't allowed to withdraw money from the banks. My original (implied) point was that bank runs themselves don't necessarily cause the chaos they're made out to, so if anything this supports my case: if the government had allowed the bank to collapse, there may not have been riots.
- Anderkent 13y agoI don't see how whether they cannot withdraw because the government blocked withdrawals or because the bank has no money to give away matters. The riots are caused by inability to withdraw money in any case.
- logicchains 13y agoNo, they weren't. To quote the Wikipedia[1] article on the riots: "The uprising was a predominantly middle-class uprising against the government of President Fernando de la Rúa, who had failed to contain the economic crisis that was going through its third year of recession". 1. http://en.wikipedia.org/wiki/December_2001_riots_%28Argentina%29 http://en.wikipedia.org/wiki/December_2001_riots_%28Argentin...
- jessedhillon 13y agoArgentina in 2001 following the implementation of the "corralito" fiscal policy. But this seems like a very pedantic quibble you have here.
- logicchains 13y agoThat wasn't the bank run causing riots. That was the government policy which froze deposits, to avert a bank run, that caused riots.
- jessedhillon 13y agoI stand corrected, you weren't being pedantic at all. I guess all those people lined up outside the bank, ready to riot, were waiting for the government to give them their money back.
- logicchains 13y agoTo quote the Wikipedia[1] article on the riots: "The uprising was a predominantly middle-class uprising against the government of President Fernando de la Rúa, who had failed to contain the economic crisis that was going through its third year of recession". "The unrest started when Economy Minister Domingo Cavallo introduced restrictions to the withdrawal of cash from bank deposits, intending to stop the draining of deposits that had been taking place throughout 2001 and had reached the point where 25% of all the money in the banks had been withdrawn." People had were previously gradually withdrawing money over time.; no 'bank run' had occurred. The Corralito occurred, which among other political factors lead sections of the populace to riot. Read the article. 1. http://en.wikipedia.org/wiki/December_2001_riots_%28Argentina%29 http://en.wikipedia.org/wiki/December_2001_riots_%28Argentin...
- aestra 13y agoCustomers turn violent as Zimbabwe bank runs out of cash http://www.independent.co.uk/news/world/africa/customers-turn-violent-as-zimbabwe-bank-runs-out-of-cash-9008890.html http://www.independent.co.uk/news/world/africa/customers-tur... Riots Hit Cyprus Bank After Accounts Frozen http://www.endalldisease.com/riots-hit-cyprus-bank-after-accounts-frozen/ http://www.endalldisease.com/riots-hit-cyprus-bank-after-acc... Panic of 1837 Moreover, the panic unleashed a wave of riots and other forms of domestic unrest. The ultimate result was an increase in the state's police powers, including more professional police forces.[17][18] http://en.wikipedia.org/wiki/Panic_of_1837 http://en.wikipedia.org/wiki/Panic_of_1837 Baltimore bank riot The Baltimore bank riot of 1835 was a violent reaction to the failure of the Bank of Maryland in 1834. The riot, which lasted from 6-9 August, was aimed at the homes and property of a number of former directors of the bank, who had been accused of financial misconduct and fraud http://en.wikipedia.org/wiki/Baltimore_bank_riot http://en.wikipedia.org/wiki/Baltimore_bank_riot
- logicchains 13y agoThe Cyprus riots were not due to a bank run; they were due to the government's decisions to prevent citizens from withdrawing their money. From the article you linked: "Riots are now being reported in Cyprus as citizens are furious at the Troika’s decision to rob the citizens to pay for the bad debts of banks." I'll give you the others, however. The fact that two are from over a century and a half ago however seems to support my implication that bank runs don't necessarily lead to riots (and more specifically, that not bailing out banks won't necessarily lead to riots).
- dredmorbius 13y agoI'm growing increasingly convinced that this is in fact true, and that the global financial system dodged a major asteroid in 2007. Possibly not a planet-killer, but one that would have set things back a long ways. The problem remains that the bailout didn't just manage to shore up faith in the currency and banking system, but grossly enriched many of the same bankers who'd, if not caused the crisis, played a major role in precipitating and enlarging it.
- marvin 13y agoYou seem to know a lot about this. Why didn't the US government, in all the bailouts, completely wipe out existing shareholders in order to not provide an incentive to do this again?
- commandar 13y agoThis was exactly my reaction to reading this document. It mirrors "too big to fail" startlingly well.