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Until we get regulatory reform on a federal level, this will keep happening. http://www.plainsite.org/issues/index.html?id=2 http://www.plainsite.org/issues/in

Until we get regulatory reform on a federal level, this will keep happening. http://www.plainsite.org/issues/index.html?id=2 http://www.plainsite.org/issues/index.html?id=2

fennecfoxen 13y ago
Which federal level were you thinking of? US? What about the rest of the world?
- thinkcomp 13y ago
  I'm concerned about the United States first, and the rest of the world later.
pdq 13y ago
Nonsense. Regulatory reform does not prevent bank thefts, in the same way as it will not prevent digital thefts due to security vulnerabilities. Also note that banks are legally allowed to run as fractional reserves. This means your $100 deposit is only backed by a minimum of $10 in the vault at any time. Companies will be (and already are) getting smarter, by hiring security experts to audit software and detect vulnerabilities, and more transparent, by providing public accounting of funds to prove they are not running Ponzi schemes or fractional reserves.
- thinkcomp 13y ago
  The point of regulation isn't to prevent bank thefts. It's to effectively protect depositors when bank thefts or other kinds of failures happen.
- jellicle 13y ago
  > Regulatory reform does not prevent bank thefts Of course it does. Not 100%; but mostly. Your bank has multiple people handling all cash transactions, mandatory account balancing on at least a daily basis, all sorts of controls on its operations that you have no idea exist because the system facing you doesn't show them to you. It has these because they are required by law. Your bitcoin exchange has none of these.
  - pdq 13y ago
    Do you think regulators protect Etrade from security vulnerabilities? Do you think government is required to provide insurance? If the consumers demand these of their merchants, it will happen in the long term on their own accord, and government is not necessary to make it happen.
    - matwood 13y ago
      Do you think government is required to provide insurance? You mean like the FDIC or SIPC?
      - pdq 13y ago
        You misunderstood the question. Do you think that only the government can provide this insurance?
        smtddr 13y ago
        Who else commands that kind of money to be able to ensure a bunch of exchanges and other bitcoin-holding businesses? Just MtGox alone needs somewhere around 400 million USD right now. I guess if someone like Google, or Donald Trump, decides to start a bitcoin insurance company... but that sounds unlikely. The 2nd problem and more serious problem is insurance fraud. You cannot be sure the people claiming to lose the coins actually lost them. In fact, forget my first point. The insurance fraud aspect renders any hope for bitcoin insurance void. If someone has any ideas how to even begin to run an FDIC-type thing on bitcoin, I'd love to hear how one would deal with insurance fraud.
        icebraining 13y ago
        Who else commands that kind of money to be able to ensure a bunch of exchanges and other bitcoin-holding businesses? Insurance companies. Where do you think that consumer insurances companies insure themselves? Companies like Lloyd's and Munich RE have dozens of billions of dollars in insured amounts.

Until we get regulatory reform on a federal level, this will keep happening. http://www.plainsite.org/issues/index.html?id=2 http://www.plainsite.org/issues/index.html?id=2

fennecfoxen 13y ago

Which federal level were you thinking of? US? What about the rest of the world?

thinkcomp 13y ago
I'm concerned about the United States first, and the rest of the world later.

pdq 13y ago

Nonsense. Regulatory reform does not prevent bank thefts, in the same way as it will not prevent digital thefts due to security vulnerabilities. Also note that banks are legally allowed to run as fractional reserves. This means your $100 deposit is only backed by a minimum of $10 in the vault at any time. Companies will be (and already are) getting smarter, by hiring security experts to audit software and detect vulnerabilities, and more transparent, by providing public accounting of funds to prove they are not running Ponzi schemes or fractional reserves.

thinkcomp 13y ago
The point of regulation isn't to prevent bank thefts. It's to effectively protect depositors when bank thefts or other kinds of failures happen.
jellicle 13y ago
> Regulatory reform does not prevent bank thefts Of course it does. Not 100%; but mostly. Your bank has multiple people handling all cash transactions, mandatory account balancing on at least a daily basis, all sorts of controls on its operations that you have no idea exist because the system facing you doesn't show them to you. It has these because they are required by law. Your bitcoin exchange has none of these.
- pdq 13y ago
  Do you think regulators protect Etrade from security vulnerabilities? Do you think government is required to provide insurance? If the consumers demand these of their merchants, it will happen in the long term on their own accord, and government is not necessary to make it happen.
  - matwood 13y ago
    Do you think government is required to provide insurance? You mean like the FDIC or SIPC?
    - pdq 13y ago
      You misunderstood the question. Do you think that only the government can provide this insurance?
      - smtddr 13y ago
        Who else commands that kind of money to be able to ensure a bunch of exchanges and other bitcoin-holding businesses? Just MtGox alone needs somewhere around 400 million USD right now. I guess if someone like Google, or Donald Trump, decides to start a bitcoin insurance company... but that sounds unlikely. The 2nd problem and more serious problem is insurance fraud. You cannot be sure the people claiming to lose the coins actually lost them. In fact, forget my first point. The insurance fraud aspect renders any hope for bitcoin insurance void. If someone has any ideas how to even begin to run an FDIC-type thing on bitcoin, I'd love to hear how one would deal with insurance fraud.
        icebraining 13y ago
        Who else commands that kind of money to be able to ensure a bunch of exchanges and other bitcoin-holding businesses? Insurance companies. Where do you think that consumer insurances companies insure themselves? Companies like Lloyd's and Munich RE have dozens of billions of dollars in insured amounts.