At the end of Bitcoin
This stops, and the possibility of collapsing, from Mt. Gox Exchange may or may not be proven to be the beginning of the end for Bitcoin – but to borrow the Winston Churchill phrase, of course the end of the beginning.
Mt. Gox has lost its place as a leading Bitcoin exchange before the chain of cloudy events that lead the Tokyo-based site to be closed. The internal document that seems to be leaked indicates that the site may be a victim of the main theft, where maybe more than $ 300 million bitcoin “disappears” from an Exchange account. I put “disappear” in a quote because, of course, Bitcoin does not have physical manifestations.
Bitcoin only exists as a product of a computer algorithm that is originally unknown and whose main purpose is not clear. It has attracted various user collections, including individuals who want to maintain questionable transactions, people who might want to maintain part of their hidden wealth of authorities who have access to conventional financial accounts, and the end of the world who thinks the civilized society is on the road Raya to hell and that for some reason they would be better to have Bitcoin when we all arrived there.
Bitcoin fans like to call digital currencies, or cryptocurrency because of the encrypted nature. But it’s clear now, amid wild fluctuations in the price of Bitcoin, that it’s not a real currency at all. This is truly a commodity whose price fluctuates according to its quality and in accordance with the supply and demand.
This week, there are two Bitcoin values. One variety of Gox Mt., which cannot be accessed by anyone when the site goes down and which may no longer exist at all, is worth just about one sixth of each other Bitcoin yesterday.
Some people are always willing to offer value, although not too much value, to take the opportunity to assets that might be worthless. This is why the company’s clear stock will go bankrupt can trade at greater prices than zero. But at least we know the shares are there, both in real or intangible forms, and there are government authorities available to ensure their validity, if not value. Bitcoin, sponsored by no government and is prohibited by some people, do not have such support. Ask anyone Mt. GOX users today is value added, because Bitcoin holders have been maintained. (The authorities from Tokyo to New York have investigated Mt. Gox Collapse, and some kind of follow-up action seems.)
True money presents two functions: as a value store and as an exchange media. Bitcoin so far only gets fair value as an exchange media, because there are only a number of places where you can freely spend them. You can exchange Bitcoin (non-MT. GOX) for real money, but you can do the same with other commodities, such as diamonds or Honda. Diamonds and Honda are worth the money, but they are not money.
Bitcoin really failed to save test values because their wild price fluctuations did not store value; Depending on blind luck, they can make or destroy it. Collect Bitcoin speculated, not saving. There is a big difference.
Bitcoin does discuss certain real-world problems, such as currency exchange costs that are sometimes exorbitant and the complicated nature of the modern banking system, which is loaded with regulations to prevent everything from the bank laundering bankruptcy to money laundering. But regulations exist due to bankruptcy, money laundering, and identity theft there. As Mt. GOX clearly describes, a system without such protection tends to create a much more serious problem than intended to be solved.
Mt. Cartacle Gox may or may not permanently cancel Bitcoin credibility. We will not know before we know what happened on the computer in Tokyo.