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"Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequa

"Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading. It does not appear to any of us that MtGox followed any these essential requirements as a financial services provider." Did I miss the part where Coinbase, Kraken, Bitstamp, BTC China, Blockchain.info, and Circle met those essential requirements? I guess those things are just essential now, not in the past.

skywhopper 13y ago
So, the Bitcoin community is calling for regulation?
- krapp 13y ago
  Revolutions stop being fun when you're the one who's bleeding...
- jey 13y ago
  Why must that require regulation? They're calling for a meme that informed actors probably wouldn't do business with exchanges that don't provide those "requirements".
  - olefoo 13y ago
    That's regulations with a multilateral peer enforcement mechanism. Conveniently enough it serves as a barrier to entry to new competitors. So if you were wanting to start a bitcoin exchange, you may have missed the boat.
    - dantheman 13y ago
      It's not regulation, it's best practices. You can choose to work with someoone who does them or not. Regulation takes that choice away.
- clamprecht 13y ago
  It sounds like self-regulation. If exchanges would just prove solvency periodically (which is possible with the blockchain), the whole world could see it. Wouldn't it be nice if you could see the balance sheet of your bank, in a way that accountants couldn't lie about it?
  - rdtsc 13y ago
    > It sounds like self-regulation. Because that has worked wonders for the other industries -- let's have pharma companies, oil, food producers, just self regulate.
    - dmm 13y ago
      There are historical instances of self-regulation working. The movie and video game industries control their own content ratings and before the invention of dynamite, nitroglycerin was commonly used as an explosive in construction. Shipping NG is very dangerous because of its instability and many accidents occurred. They industry eventually developed extensive standards regarding shipping that vastly improved the safety of shipping NG.
      - eropple 13y ago
        > movie and video game industries control their own content ratings Not sure you're helping yourself here. The established movie industry uses its content rating system as a bludgeon against independent filmmakers. The video game industry's content controls are largely a joke, assigned arbitrarily by people who never actually play the game.
        bduerst 13y ago
        How are movie ratings used as a bludgeon against independent filmmakers?
        br78 13y ago
        I'm sorry it's not an easy source to access, but you should watch this film http://en.wikipedia.org/wiki/This_Film_Is_Not_Yet_Rated http://en.wikipedia.org/wiki/This_Film_Is_Not_Yet_Rated
- tlrobinson 13y ago
  If by "regulation" you mean "cryptographic proof of solvency", then yes: https://news.ycombinator.com/item?id=7277865 https://news.ycombinator.com/item?id=7277865 Bitcoin itself has the potential to replace the need for certain types of regulation entirely, but we're not there yet.
- ryanSrich 13y ago
  I think the bitcoin community at large is interested in standardization for the greater good not regulation enforced through tyrannical political institutions.
  - skywhopper 13y ago
    Well, who decides what the "greater good" is and how to achieve it? If the BitCoin exchanges get together and decide on a set of standard procedures and policies that are in any way enforced or monitored, then voila: "Governments are instituted among [BitCoin Exchanges], deriving their just powers from the consent of the governed", aka "tryannical political institutions" and regulation.
    - ryanSrich 13y ago
      I think the Bitcoin community at large has a certain set of values that it regards as sacred (security, anonymity, freedom from state regulation) Perhaps I'm wrong though. Regulation is often associated with political states and are often enforced through brute force. I think if we could, as a community, regulate without any state intervention that would be ideal.
acomjean 13y ago
Without doing a lot of due diligence, it might be hard to figure out which exchanges are well run. And its not like lying to auditors etc hasn't been done before. Maybe the exchanges can join together and offer something like FDIC Insurance?
- pjc50 13y ago
  Why would you agree to insure your competitor against their own incompetence?
  - dredmorbius 13y ago
    Because: • Receipt of insurance is contingent on meeting requirements for insurance, so it's not blind assistance in the face of incompetence. The 3 years of account thefts reported to have occurred at Mt. Gox would, hopefully, have been detected. Even collaborating on more secure storage and trading systems. There's a precedent for this: it's how the large credit card companies (BankAmericard, I mean, Visa and Interbank/Master Charge, I mean, MasterCard), were formed. • Rates would correspond to perceived risk, providing a market feedback mechanism. • Some risks are incidental and random. Weaknesses in protocols, problems in network or technology stacks (independent of individual exchange software). • The end result is a greater level of trust in the entire marketplace as a whole, so: more transactions, more members, more profits.

skywhopper 13y ago

So, the Bitcoin community is calling for regulation?

krapp 13y ago
Revolutions stop being fun when you're the one who's bleeding...
jey 13y ago
Why must that require regulation? They're calling for a meme that informed actors probably wouldn't do business with exchanges that don't provide those "requirements".
- olefoo 13y ago
  That's regulations with a multilateral peer enforcement mechanism. Conveniently enough it serves as a barrier to entry to new competitors. So if you were wanting to start a bitcoin exchange, you may have missed the boat.
  - dantheman 13y ago
    It's not regulation, it's best practices. You can choose to work with someoone who does them or not. Regulation takes that choice away.
clamprecht 13y ago
It sounds like self-regulation. If exchanges would just prove solvency periodically (which is possible with the blockchain), the whole world could see it. Wouldn't it be nice if you could see the balance sheet of your bank, in a way that accountants couldn't lie about it?
- rdtsc 13y ago
  > It sounds like self-regulation. Because that has worked wonders for the other industries -- let's have pharma companies, oil, food producers, just self regulate.
  - dmm 13y ago
    There are historical instances of self-regulation working. The movie and video game industries control their own content ratings and before the invention of dynamite, nitroglycerin was commonly used as an explosive in construction. Shipping NG is very dangerous because of its instability and many accidents occurred. They industry eventually developed extensive standards regarding shipping that vastly improved the safety of shipping NG.
    - eropple 13y ago
      > movie and video game industries control their own content ratings Not sure you're helping yourself here. The established movie industry uses its content rating system as a bludgeon against independent filmmakers. The video game industry's content controls are largely a joke, assigned arbitrarily by people who never actually play the game.
      - bduerst 13y ago
        How are movie ratings used as a bludgeon against independent filmmakers?
        br78 13y ago
        I'm sorry it's not an easy source to access, but you should watch this film http://en.wikipedia.org/wiki/This_Film_Is_Not_Yet_Rated http://en.wikipedia.org/wiki/This_Film_Is_Not_Yet_Rated
tlrobinson 13y ago
If by "regulation" you mean "cryptographic proof of solvency", then yes: https://news.ycombinator.com/item?id=7277865 https://news.ycombinator.com/item?id=7277865 Bitcoin itself has the potential to replace the need for certain types of regulation entirely, but we're not there yet.
ryanSrich 13y ago
I think the bitcoin community at large is interested in standardization for the greater good not regulation enforced through tyrannical political institutions.
- skywhopper 13y ago
  Well, who decides what the "greater good" is and how to achieve it? If the BitCoin exchanges get together and decide on a set of standard procedures and policies that are in any way enforced or monitored, then voila: "Governments are instituted among [BitCoin Exchanges], deriving their just powers from the consent of the governed", aka "tryannical political institutions" and regulation.
  - ryanSrich 13y ago
    I think the Bitcoin community at large has a certain set of values that it regards as sacred (security, anonymity, freedom from state regulation) Perhaps I'm wrong though. Regulation is often associated with political states and are often enforced through brute force. I think if we could, as a community, regulate without any state intervention that would be ideal.

acomjean 13y ago

Without doing a lot of due diligence, it might be hard to figure out which exchanges are well run. And its not like lying to auditors etc hasn't been done before. Maybe the exchanges can join together and offer something like FDIC Insurance?

pjc50 13y ago
Why would you agree to insure your competitor against their own incompetence?
- dredmorbius 13y ago
  Because: • Receipt of insurance is contingent on meeting requirements for insurance, so it's not blind assistance in the face of incompetence. The 3 years of account thefts reported to have occurred at Mt. Gox would, hopefully, have been detected. Even collaborating on more secure storage and trading systems. There's a precedent for this: it's how the large credit card companies (BankAmericard, I mean, Visa and Interbank/Master Charge, I mean, MasterCard), were formed. • Rates would correspond to perceived risk, providing a market feedback mechanism. • Some risks are incidental and random. Weaknesses in protocols, problems in network or technology stacks (independent of individual exchange software). • The end result is a greater level of trust in the entire marketplace as a whole, so: more transactions, more members, more profits.