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Bitcoin Exchange Mt. Gox Halts USD Withdrawals

Soulskill posted about a year ago | from the keep-your-eye-on-the-other-shoe dept.

Bitcoin 173

hypnosec writes "World's largest Bitcoin exchange, Mt. Gox, has halted U.S. dollar withdrawals of customer funds in the U.S., citing a need for system improvements. According to Mt. Gox, the exchange has experienced a huge number of requests for deposits as well as withdrawals from both established markets and new markets, following which its bank hasn't been able to process transactions on time. This led to difficulties for its overseas clients, especially those in the U.S. The exchange said that the deposits in USD, transfers to Mt. Gox, and deposits and withdrawals in other currencies will remain unaffected during this period. Mt. Gox will be resuming the USD withdrawals for its U.S. clients once the improvement of its systems is complete." Wired suggests the slowness may be due in part to reluctance from banks to get entwined with Bitcoin for a number of reasons. "The problem is that U.S. banks are afraid that doing business with Bitcoin companies might draw the attention of U.S. or state regulators ... This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry. Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees."

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173 comments

Alternative explanation (0, Offtopic)

Anonymous Coward | about a year ago | (#44079365)

Updating their systems to feed NSA?

Re:Alternative explanation (0)

Anonymous Coward | about a year ago | (#44079463)

Parent here.

From TFA: "It may be that Mt. Gox is simply going through additional hoops to fix a technical problem or reassure its current banker"

I posit that the "thecnical problem" they have to "fix" now is that they have been forced to feed data to NSA through GCHQ, after the PRISM disclosure by Snowden has put spying on US citizens under public scrutiny.

Re:Alternative explanation (0)

Anonymous Coward | about a year ago | (#44079521)

Forced, my ass. They contacted the NSA and offered.

Fuck Mt. Gox.

Re:Alternative explanation (0)

Anonymous Coward | about a year ago | (#44079533)

Parent again.

We now have confirmation that the technical problem described earlier is actually a faulty hard drive located in the primary data center. I guess that means that they are already hooked up with the NSA.

Re:Alternative explanation (0)

Anonymous Coward | about a year ago | (#44079605)

What?!

You are not my father!!!

"That's what you get for money laundering". (5, Interesting)

deego (587575) | about a year ago | (#44079405)

"That's what you get for money laundering". "Why don't they bother to do things properly?" That's the typical knee jerk slashdot reaction I have seen to other such news, such as Liberty reserve crackdown.

What such comments fail to realize is that doing all the FINCEN and state registration stuff in 50 states easily costs upwards of a million dollars per year, not to mention the need to hire several lawyers. Even FINCEN registration, which is supposedly free, requires an ongoing training program for your employees, among other things.. Complying with myriad financial regulations is not easy, is costly, and takes time. On top of that, interpreting the regulations itself is a nightmare..

Look up "regulatory capture." The net effect of these laws is that only 4 or 5 companies (paypal, for example) in the whole country manage to check all the dots.

Re:"That's what you get for money laundering". (4, Insightful)

kamapuaa (555446) | about a year ago | (#44079431)

You seem to believe the banking industry is over-regulated.

Re:"That's what you get for money laundering". (1, Troll)

Cryacin (657549) | about a year ago | (#44079449)

You seem to be shilling that more incorrect regulation is the right way.

Re:"That's what you get for money laundering". (2, Insightful)

kamapuaa (555446) | about a year ago | (#44079551)

Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme. Seems to me that if the banking regulations are keeping that sort of entity out of the market, they're doing exactly what was intended.

Re:"That's what you get for money laundering". (1, Flamebait)

rockout (1039072) | about a year ago | (#44079809)

Even on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme.

How's that different from the US dollar, then?

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44079885)

I realize you're being snappy and going for easy Slashdot karma (US sucks!!!), but come on. A ponzi scheme? Immense returns are promised on investments, only the original investors getting any money out of it? Original US dollar holders have been dead for centuries now. And US dollars have long been considered one of the more (or the most) stable global currencies.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44079905)

Man, that is quite a ponzi scheme the US government has been running - since 1862 and still going! It's so unstable, it's been the defacto standard of which all other currencies are valued against.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44079931)

Bitcoin has no government, or any authority, to back it. It's a classic pump-and-dump and the bottom will fall out shortly.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44080731)

I bet you a bitcoin it doesn't go to zero.

Re:"That's what you get for money laundering". (4, Funny)

sacrilicious (316896) | about a year ago | (#44079917)

on Slashdot, Bitcoin is widely considered unstable and generally considered to be a Ponzi scheme

Have the courage to speak for yourself and only yourself. Everybody here wants you to do that.

Re:"That's what you get for money laundering". (5, Informative)

guardiangod (880192) | about a year ago | (#44079983)

Do you know the definition of Ponzi scheme? Because I don't think that term means what you think it means.
 
Bitcoin is many things, but it is as much of a Ponzi scheme as gold, real estate, or stock speculations. ie. not a Ponzi scheme at all.

While one can argue that Bitcoin is a scam (and most definitely a bubble), it does not fit the formal definition of a ponzi scheme.

http://www.sec.gov/answers/ponzi.htm [sec.gov]

>>A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

The key point here is the "solicit new investors by promising to invest funds in opportunities claimed to generate high returns" section. In a normal Ponzi Scheme, the previous investors would attempt to guarantee newcomers that profit is certain.

In comparison, Bitcoin promises no such thing. While it is true that the profit of previous investors (or speculators) do indeed come from newcomers, the newcomers are not promised anything beyond their belief that the price will continue to rise.

This key difference makes the Bitcoin phenomenal a 'Bubble', not a 'Ponzi Scheme'.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44080069)

People are interested in it for the amazing profits. Do it now, because bitcoins are just getting more and more rare, and if you get in on the ground floor of the amazing new financial instrument you'll be rich in the future!

Re:"That's what you get for money laundering". (1)

Statecraftsman (718862) | about a year ago | (#44080295)

Bitcoins are actually becoming more plentiful to the tune of 3600 more being created each day. The more you look into it, you'll see that people have many interests in Bitcoin. Some want to start mining hardware companies, some do ponzi schemes, some see it as a revolutionary payment system and economic tool, some see it as freedom. How do you see it?

Re:"That's what you get for money laundering". (1)

Anonymous Coward | about a year ago | (#44080479)

Isn't how I see it obvious from the context? It's a get-rich quick scheme for the people who got in early when it was easy to get bitcoins, and is ramped so that it is slowly and slowly becoming just a little bit more difficult (and hence, now is always the time).

Re:"That's what you get for money laundering". (3)

broken_chaos (1188549) | about a year ago | (#44080501)

It's definitely a scam at some levels. The entire system was designed to reward the earliest adopters (the creator, for instance) disproportionately.

The creator being absolutely anonymous, and working very, very hard to remain absolutely anonymous, is also very suspicious. His cited reasons for doing so can be seen as reasonable in one respect, but they also cast large doubts to me -- the justifications come down to an assumption of success (rather than just being a neat little pet cryptography project), and the system has extreme financial rewards for them personally if that success comes. If they were assuming success and didn't intend to exploit it, the system wouldn't have had such large rewards to begin with, with those rewards diminishing so rapidly.

It's also been a pretty spectacular failure as a currency (the rapid, vast value fluctuations are a big problem for serious use -- aside from illegal usage, where that can be tolerated for the anonymity benefits), but has been a resounding success as a method of making some people get very, very rich.

Re:"That's what you get for money laundering". (1)

Anonymous Coward | about a year ago | (#44080275)

You seem to be shilling that more incorrect regulation is the right way.

Shilling? Someone is paying people to trash Bitcoin? Crap. I'm doing it wrong. I've been trashing it, because the only people plugging it are people who own Bitcoins trying to drive up prices. Speculators, money launderers and black market dealers, who else uses Bitcoins?

0/10, wouldn't feed again (-1)

Anonymous Coward | about a year ago | (#44080325)

Speculators, money launderers and black market dealers, who else uses Bitcoins?

Plenty of shops like gadget sellers and VPN services, also donations to orgs like EFF, Wikileaks and Archive.org

Re:"That's what you get for money laundering". (3, Interesting)

deego (587575) | about a year ago | (#44079467)

I hope you realize that the regulation in this industry currently serves one purpose: It keeps newcomers, and anyone not "BIG" out of the market.

Hard to understand it unless you try starting a business in this area and see this firsthand.

I agree - somewhat. (1)

Anonymous Coward | about a year ago | (#44079659)

Here's the thing though, those regulations came to be because crooks in the past abused the system.

Just look at what happened in '07 and '08 here in the US. The regulators let their guard down and we got this meltdown.

Yes, the side effect is that it raises the barriers to entry for competition which helps the incumbent firms, but it can't be all that good for them since they are constantly trying to get the regulations reduced - like when they lobbied very hard to get Glass-Steagall Act repealed - which added to the meltdown.

And frankly, when one has a hard time getting their money, that raises a red flag.

Re:"That's what you get for money laundering". (1)

stymy (1223496) | about a year ago | (#44080267)

If you can't afford to pay a million dollars a year, then maybe you shouldn't be a bank. Since the government guarantees plenty of deposits in banks, it's quite reasonable that they make sure only banks with enough funds to survive are allowed to be banks.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44079525)

Paypal is not a bank in the US. Non-bank money transmitters are highly regulated nonetheless. The government has decided that people don't really need this pesky privacy thing.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44079557)

There's very little belief professed by GP's author, actually. But even if that is his belief, then that belief mightn't be wrong, too. In fact, I've seen even entire books devoted to showing how the financial industry is, in the authors' opinion, indeed overly regulated.

If the belief follows from a comprehensive argument built on demonstratable facts, is it still a belief?

Re:"That's what you get for money laundering". (1, Interesting)

kamapuaa (555446) | about a year ago | (#44079577)

How do you get that? The entire body of his post is about unreasonable regulations and the costs involved with satisfying regulation requirements. Regulations that are keeping a Ponzi scheme out of the US marketplace.

Re:"That's what you get for money laundering". (2)

JDG1980 (2438906) | about a year ago | (#44079709)

You seem to believe the banking industry is over-regulated.

Banking regulations aren't all the same thing. Regulations that try to prevent insider self-dealing or offloading costs on taxpayers are a good thing. Regulations that basically make banking privacy for individuals illegal are a bad thing.

Re:"That's what you get for money laundering". (1)

Statecraftsman (718862) | about a year ago | (#44080271)

Regulation is not a monolith. There are some good laws and some bad ones. I think we'd like to point out that the ones aroud money laundering are particularly bad in that they are not very effective for catching crooks but very good at stopping normal people from providing for themselves.

thats what you get for being stupid (2)

decora (1710862) | about a year ago | (#44079507)

for all their faults, ordinary banks, in general, do not like dealing with certain types of criminal customers.

there are a lot of checks and balances inside most banks regarding deposit accounts, and transfers between them. some of it is government regulation, some of it is just because banks dont like being ripped off or having their customers ripped off. no bank wants more regulation, but no bank wants to interface its internal systems to some fucking glorified drug-fencing operation. except maybe Wells Fargo.

everything that banks have learned for 500+ years about fraud would be thrown out the window here. it woudl be like the wild west.

if you want to interface your shit-hole experimental quasi-criminal fucktard financial system onto the First City Bank of Nowheresville, Kansas, then you need to just withdraw actual cash, and then give that cash to the bank. Don't try to fuck up grandma's soybean farm with this experimental bullshit.

now you of course want to say, look at all the de-regulation that caused the crash of 2008? well, none of that was really about bitcoin or ordinary banking activity, like deposit accounts. that 'normal banking' is still the fundamental piece of the banking system that has to act like a Water Utility in a modern society, allowing money to flow freely with a relatively stable value.

Re:thats what you get for being stupid (1)

Anonymous Coward | about a year ago | (#44079573)

if you want to interface your shit-hole experimental quasi-criminal fucktard financial system onto the First City Bank of Nowheresville, Kansas, then you need to just withdraw actual cash, and then give that cash to the bank.

Wow, "Quasi-criminal" ? Just because government can't track it ? I agree bitcoin can be a tool for criminals, but the real issue here is control over the society not fighting crime. That's exactly how the owners of this world want: mindless drones such as yourself doing their ground work.

Re:thats what you get for being stupid (1)

DragonTHC (208439) | about a year ago | (#44079969)

cash is a tool for real criminals.

Re:thats what you get for being stupid (0)

Anonymous Coward | about a year ago | (#44079613)

The whole financial system is corrupt and completely broken. Everything that banks have learned about fraud the last 500+ years they are practicing every day themselves.

Re:thats what you get for being stupid (2, Insightful)

ArsonSmith (13997) | about a year ago | (#44079669)

The crash of 2008 was specifically due to regulation. The government thinking that banks we're not loaning enough money to people that were unlikely to pay it back so banks were given incentives to do so by regulation. This made for the artificial bubble in people getting cheap loans. Then as it turns out that these people were a bad risk as the banks estimated in the beginning and didn't pay loans back it crashed.

If there's a perceived problem with free market, government can usually guarantee there's a problem with regulation.

Re:thats what you get for being stupid (1)

LordLimecat (1103839) | about a year ago | (#44079707)

It saddens me that a comment that hits the nail on the head like yours will languish at +2 moderation; perhaps if you had blamed it entirely on the banks you might have gotten modded up.

Re:thats what you get for being stupid (2)

winwar (114053) | about a year ago | (#44079835)

So banks knowingly made bad loans and it was the regulations fault? Regulations that were loosened over time, which is what I assume you meant by incentives.

Sorry but that is a failure of logic.

Logic doesn't matter here (1)

Zynder (2773551) | about a year ago | (#44080417)

While you are correct logically, anytime a human & money is involved in the equation logic goes out the window cause we are emotional creatures. So the gov may tell the banks "loan more poor folks money."(which they did). At first many bankers may say exactly what you did "But if we do that we'll go out of business." but when the regulators come back and tell them to do it anyway, make you a pile of cash and we'll deal with the fallout later, what do you expect them to do? Remember we as a society have become a "Fuck you, I got mine" society and so that banker can do 2 things: Sell them loans to poor folks he knows can't pay them back but he will get rich or have a conscience refuse to sell them and then he and his family will go without. Which choice do you think most will take? I hate that it is that way and a majority of our citizens have this fuck you attitude but it was foremost the fault of those regulators who wrote the regulations to force the banks to do thier bidding (not that they really complained that much). How do you think they should have responded?

Re:thats what you get for being stupid (4, Insightful)

rockout (1039072) | about a year ago | (#44079849)

I've heard this line of BS many times and it amazes me how many people buy into it.

It's a nice line that anti-government types like to pull out, and the only problem is that it ignores reality and gets it backwards. Banks basically paid off, through lobbying and "donations", both legal and illegal ones, enough members of Congress to get regulations RELAXED - as in, the law signed in 2000 that made Wall Street exempt from the "bucket shop" restriction. Great idea! Except that it was the biggest contributing factor to sinking the economy. The bad loans themselves, if that were all that were being defaulted on, were a tiny fraction of a percent of our GDP. The bad bets MADE on the loans, however, compounded the problem by orders of magnitude.

In other words, even if your claim of government forcing banks to loan more money were true (it's debatable, and if you read enough about it it's clear that the banks weren't being forced to do anything they didn't want to do) - it STILL didn't sink the economy. Deregulation, of one specific type, did.

Re:thats what you get for being stupid (5, Insightful)

The Second Horseman (121958) | about a year ago | (#44080117)

The steady erosion of Glass-Steagal through the 20th century, culminating in the 1999 GLBA which repealed sections 20 and 32 certainly had a big part to play in this. Without that, the interdependence effect we saw would likely not have occurred to the same degree.

The fact is, a lot of people in finance aren't bright enough - or cautious enough - to understand or care exactly what risks they're taking, especially with other people's money. To use an old analogy, the modern financial system is like the ferry service in an impoverished coastal country. Everyone uses it, because it kind of works. It's overcrowded, run by greedy people cutting corners, and every once in a while a ferry sinks, killing somewhere between 800 and 1000 people. But the next day, the rest of the identical ferries are out, and people are lining up to get on board because they don't have a choice.

At least after the S&L debacle, people got prosecuted. This time, they were let off the hook.

Re:thats what you get for being stupid (5, Informative)

DragonTHC (208439) | about a year ago | (#44080043)

It would be nice if that were the truth. Yes, the Bush administration made it a priority to get people into homes.
The mortgage brokers cheated lenders with subprime mortgages. They got their commissions and people lost the houses they couldn't afford in the first place.
The lenders then sold bad loans to investors like Goldman Sachs.
When the bottom finally fell out, two financial instruments companies went down. The rest got their money back from the government.
To explain exactly how much cheating was going on, the utter trash that GS knew was trash, they sold to investors. They also took out insurance policies on it.
Then AIG collapsed because of those policies and the government paid their policies. GS took that money and used it to buy securities.

So, GS engaged in quasi-criminal behavior and fraud. They bought, packaged, and sold turds. Took out turd insurance and then used the insurance to buy money.

In case some can't follow along, the took the government bailout and loaned it back to the government with interest.

So, no, the crash of 2008 wasn't due to regulation, it was due to fraud. And no one went to jail.

Re:thats what you get for being stupid (0)

Anonymous Coward | about a year ago | (#44080527)

It was the bank's fault that people took out mortgages they couldn't afford!

And then the banks shouldn't have been allowed to sell the mortgages even though that's been common practice for a century and there are quasi-government bodies that were set up in 1970 to do just that! Even though banks also sell on good mortgages, bad mortgages, and basically all the mortgages they get!

It's way easier to blame things on evil bankers than admit the general public was stupid and got caught up in a bubble.

Re:thats what you get for being stupid (1, Interesting)

PPH (736903) | about a year ago | (#44079681)

for all their faults, ordinary banks, in general, do not like dealing with certain types of criminal customers.

Only because the gov't has criminalized the free movement of funds. Banks could care less about their customers so long as they behave themselves while in the lobby. But they have been pressed into service by the state as quasi-police. Because the state cannot detect (or be bothered with identifying) actual criminal activity.

The amount of funds that move per unit time for legal purposes is orders of magnitude more than those supporting criminal activities. Compliance with FINCEN regs for all of these legal transactions is so high we would be better off legalizing drugs and losing one or two WTCs or year. We'd still be money ahead.

Re:"That's what you get for money laundering". (0)

Anonymous Coward | about a year ago | (#44080061)

deego is 100% correct here. Additionally, money laundering isn't about crime. It's about control. If it were so effective as a law enforcement tool, there would be no crime. It is quite effective at wasting people's time. In the end all this AML stuff will fade away with the existing financial system.

Bitcoin is not just bringing a payment method to the people, it is enabling fundraising, it is forming the foundation for myriad new business models. International, telecommuted, cloud-based, agent-based, 3d-printed, seasteaded, unregulated, decentralized, and ultimately unstoppable business models. Prepare to be disrupted.

Err... (0)

Anonymous Coward | about a year ago | (#44079451)

Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees.

Banking transaction fees are an obstacle to transferring funds and therefore impede international trade. Why then is the WTO not championing bitcoin?

because some fees have an actual purpose? (4, Insightful)

decora (1710862) | about a year ago | (#44079523)

holy fuck. you realize that transferring trillions of dollars to millions of people, requires a shit ton of people to do stuff?

yes the system is corrupt - bitcoin would take that corruption to the maximum level.

Re:because some fees have an actual purpose? (1, Informative)

PPH (736903) | about a year ago | (#44079635)

requires a shit ton of people to do stuff?

With green eyeshades and large paper ledgers? Welcome to the 21st Century. We have computers and an Internet.

Re:because some fees have an actual purpose? (1)

Osgeld (1900440) | about a year ago | (#44079693)

oh yes those magical boxes, what do they do untill you tell them to do exactly what you want

FUCKING NOTHING

Re:because some fees have an actual purpose? (0)

Anonymous Coward | about a year ago | (#44079829)

I'm sure even mysql could handle it.

Re:because some fees have an actual purpose? (1)

LordLimecat (1103839) | about a year ago | (#44079719)

ANd yet somehow the more computers a company has, the more staff working them they tend to have, and the larger the support staff keeping the computers running tends to be.

Its almost as if "computers" isnt a magical answer to complexity, or anything at all, really.

Re:because some fees have an actual purpose? (1)

PPH (736903) | about a year ago | (#44079965)

I've never had problems with automating manual processes. And in my experience, whenever someone demands a manual step somewhere in the chain, its for some unethical or illegal purpose. Or to employ their idiot nephew who can just barely operate a rubber stamp.

Re:because some fees have an actual purpose? (0)

Anonymous Coward | about a year ago | (#44080105)

To your first point, Bitcoin can greatly reduce the overhead of paying an enormous number of people. As long as the payments can be handled algorithmically, no person needs to be involved at all.

As for corruption, Bitcoin is just like cash but more traceable. I think it can offer more transparency for government finance which means corrupt activity should become more obvious when it happens.

Bitcoins are not free (0)

Anonymous Coward | about a year ago | (#44079465)

"Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees"

Bitcoins don't have free timely transactions.

Re:Bitcoins are not free (1)

tepples (727027) | about a year ago | (#44079679)

Bitcoins don't have free timely transactions.

Do transactions without a "tip" already take longer than an hour to get included in a block?

Re:Bitcoins are not free (1)

Statecraftsman (718862) | about a year ago | (#44080209)

It depends on the size of the transaction. Space in the blockchain and processing time are not free as miners are competing to have their blocks accepted by the rest of the network as soon as possible after they are found. The transaction fee for most transactions to get included right away is 0.0005 btc which is about $0.05 For average confirmation time, whcih has been decreasing due to greater hashrates see http://blockchain.info/charts/avg-confirmation-time [blockchain.info]

...SOME transactions? (0)

Anonymous Coward | about a year ago | (#44079477)

I thought I read in the Bitcoin whitepaper, or whatever it was published under, that the entire purpose of Bitcoin was to eliminate all transaction fees.

You know, just like the story of Jesus flipping those banker's tables at the temple kinda thing, but with computers.

and when all of them have been mined? (1)

decora (1710862) | about a year ago | (#44079579)

holy fuck, do you realize this will concentrate massive amounts of wealth inthe hands of a few people and make the thing either fucking worthless or some kind of bizarre luxury item?

you cant build a fucking coinage on a limited resource, its fucking idiotic.

Re:and when all of them have been mined? (0)

Anonymous Coward | about a year ago | (#44079947)

holy fuck, do you realize this will concentrate massive amounts of wealth inthe hands of a few people and make the thing either fucking worthless or some kind of bizarre luxury item?

you cant build a fucking coinage on a limited resource, its fucking idiotic.

Oh, really? Well, sorry to burst your bubble, but gold is also a limited resource.

Re: and when all of them have been mined? (2, Informative)

Anonymous Coward | about a year ago | (#44080287)

Sorry to burst your bubble but you can't build a coinage on hold either, unless you can mine it at the same rate the economy is growing.

A stable monetary base over a growing economy leads to deflation, which discourages investment. The equilibrium state with a fixed-size monetary base is a stagnant economy that is ultimately zero-sum. And if you think a zero-sum economy looks like anything other than concentration of wealth in the hands of the powerful, I encourage you to study some history.

Once mining produces less minting (1)

tepples (727027) | about a year ago | (#44079687)

the entire purpose of Bitcoin was to eliminate all transaction fees

I thought transaction fees were the entire reason to mine as the minted coins per block decrease asymptotically.

Re:Once mining produces less minting (1)

Statecraftsman (718862) | about a year ago | (#44080233)

True. Transaction fees are expected to support the processing and security of the network more and more as time goes by. Transaction fees are already over 1% of the amount minted daily in new coins. As bitcoins are more widely distributed and transaction volumes increase, it is plausible to me that the fees will serve their purpose. Rather than argue about some absolute everything is free idea, what we should look out for are things that increase the real cost of sending transactions, such as spam and poor network connectivity.

It ain't fear (0)

Anonymous Coward | about a year ago | (#44079485)

You seriously believe that banks are afraid of regulators? Having worked in the banking industry for a number of years I can tell you that banks pretend to fearful of regulation...but they really aren't.

Regulators have no incentive to censure or close banks. Regulatory capture is a real thing.

Bitcoin is the competition. Why help your customers use your competitor?

Threat ? Hilarious. (3, Insightful)

brunes69 (86786) | about a year ago | (#44079541)

The idea that banks are hesitating to do business with these exchanges because Bitcoin is posing as a "thread" is hilarious on it's face.

Ask any average person on the street what a bitcoin is and you will be greeted with nothing but blank stares.

People who use bitcoin and drive up it's value are living inside a reality distortion field of their own making. This supposed currency is going nowhere.

Re:Threat ? Hilarious. (1)

Nrrqshrr (1879148) | about a year ago | (#44079597)

Well, color me ignorant, because I am, but it seems that banks feel indeed threatened by it because, as you said, it IS something unreal, and those who use it and believe in it are deluded. But if "Famous Bank X" starts dealing with it, bitcoins will have that one proof of existence and even your average joe will now hear of it.
But then again, this is my personal take on the situation, and am just a dude watching the news on his laptop.

Re:Threat ? Hilarious. (0)

Anonymous Coward | about a year ago | (#44079879)

Those who use it are such a small, frankly insignificant, minority that they have no reason to be threatened.

They're scared (1)

Zynder (2773551) | about a year ago | (#44080533)

If there was no reason to feel threatened then why suddenly is the government trying to lock it down? If you aren't threatened you ignore it cause it doesn't matter. No, I am quite certain banks are fearful of breaking the status quo which they control and manipulate. The fact that it isn't widespread is why they are trashing it now, nipping it in the bud before it becomes too big to stop.

Re:Threat ? Hilarious. (2)

AthanasiusKircher (1333179) | about a year ago | (#44080221)

it seems that banks feel indeed threatened by it because, as you said, it IS something unreal, and those who use it and believe in it are deluded. But if "Famous Bank X" starts dealing with it, bitcoins will have that one proof of existence and even your average joe will now hear of it.

The reason why banks aren't interested is probably because it's just not worth caring about. It has nothing to do with a "threat."

There are two types of users of bitcoins (now, and likely in the foreseeable future):

(1) the same kind of anonymity-seeking people who do things like use Tor, a combination of (a) people who need secrecy for illegal (or questionably legal) activities, (b) anti-authoritarian extremists, and (c) other people with strong ideological perspectives on privacy

(2) speculators who think this might be the next "gold" or other random commodity to accumulate value in a ridiculous bubble

Group (1c) is perhaps strongest and most vocal on Slashdot, but banks don't want to be associated with the possibly illegal or political issues in dealing with (1a) and (1b), so group (1c) will be drowned out. And in a culture where the vast majority of people are happy to post all the minute details of their private life on Facebook, Twitter, etc., it's really doubtful that (1c) will ever be a huge market among the general public.

Meanwhile, group (2) just wants to make profit -- it doesn't give a crap about any of the rationale behind Bitcoin as long as it generates a return. Group (2) will guarantee that Bitcoin's value will be unstable enough for the near future that it can't be perceived as a stable currency. Unlike things like gold, Bitcoin is not known enough and popular enough to be stabilized by a lot of legitimate investment -- it will tend to attract a lot of speculators.

It's not that banks are afraid of it or don't want to legitimize it -- it's just that it's obscure enough to mostly only be known to Group (1), i.e., not important and possibly tainted with illegality. And banks want to be associated with Group (2) the same way legitimate banks tend to spend lots of money running those "BUY GOLD NOW!!" radio commercials every day. (Hint -- they don't.)

Not hilarious. (0)

Anonymous Coward | about a year ago | (#44079607)

Your improper usage of "it's" instead of "its" is not funny at all. It's disgusting, filthy, smelly, and lice-ridden.

Re:Threat ? Hilarious. (2)

david.given (6740) | about a year ago | (#44079633)

...Bitcoin is posing as a "thread" is hilarious on it's face.

Bitcoin raining down from the Red Star, threatening to destroy all life on our planet, and only an elite squad of fire-breathing US drone fighter aircraft can save us? I agree that this does seem a little hard to believe.

Re:Threat ? Hilarious. (1)

Zynder (2773551) | about a year ago | (#44080545)

Didn't Ann McCafrey stop writing Pern books years ago? I'm so behind on my scifi.

Re:Threat ? Hilarious. (1)

david.given (6740) | about a year ago | (#44080647)

Her son Todd has taken over. Apparently they're not bad, although I stopped reading new Pern books years ago.

Re:Threat ? Hilarious. (0)

Anonymous Coward | about a year ago | (#44080131)

Bankers are not average people. If you've been watching the financial news, they are definitely paying attention. Bloomberg, CNN, CNBC, FT...they've all covered it. While they mostly talk about it as a curiosity and with some incredulity to concepts like the 21 million Bitcoin limit, they are learning more over time. The average person, specifically in the US has little reason to use Bitcoin. My fear is that when the average person in the US does come around, they're going to find themselves holding far too little of the world's new reserve currency. Or worse, they'll find themselves clinging to a shrinking island of a financial system.

Re:Threat ? Hilarious. (0)

Anonymous Coward | about a year ago | (#44080173)

Bitcoin has a smaller chance of being a reserve currently than I do being the new first king of Mars. Get real. It won't around in 10 years.

Re:Threat ? Hilarious. (0)

Anonymous Coward | about a year ago | (#44080475)

So confident in your assertion, you're unwilling to put your name to it?

Pretty wise. See you in ten years. I'll be the one retired, and vastly rich, from my hoard of bitcoins.

Re:Threat ? Hilarious. (0)

Anonymous Coward | about a year ago | (#44080493)

Well okay then. You do that.

Re:Threat ? Hilarious. (1)

EdgePenguin (2646733) | about a year ago | (#44080409)

If I understand reserve currencies, then they may be something BitCoin is actually useful for, specifically because it isn't attached to a single country and can self regulate (sort of).

But why would ordinary people want to hold the reserve currency? I live in the UK, and my country holds reserves of dollars and euros, like every other country. My personal stash of dollars and euros is a handful of notes in a draw that I couldn't be bothered to get changed back into pounds.

WalMart? (1)

Anonymous Coward | about a year ago | (#44079543)

Wonder if WalMart's lawyers have looked into Bitcoin? They already handle prepaid CC and gift cards and have wanted more into banking for a while now. Lots of locations and a good chance they would offer lower fees. Bitcoin should work up a plan to submit to them to get talks started. Not sure how the regulations might handle it as far as the possibility of handling this through other countries that have regulations better suited to Bitcoin. Might make for some interesting court arguments too regarding the transactions electronically handled in the better regulations country.

If they are going to trade for real currency they really need to get recognized by the World Bank or whatever responsible bodies and recognized as one otherwise get listed as a tradable commodity.

Uh oh. Maybe the money isn't there. (5, Interesting)

Animats (122034) | about a year ago | (#44079563)

That's a typical Mt. Gox excuse. "We're going to hold onto your money for some vague amount of time for some vague reason." Note that they're only stopping withdrawals from Mt. Gox, not inbound transfers. That's very suspicious. If they'd lost their banking relationship for wire transfers, they couldn't do inbound transfers either.

I've mentioned before that Mt. Gox's withdrawal limits are suspicious. They should be able to pay out 100% of funds they hold on short notice. They're not a bank, and are required by the Payment Services Act of Japan [amt-law.com] to have 100% of the assets entrusted to them. Even more suspicious is that as Bitcoin has grown, Mt. Gox withdrawal limits [mtgox.com] have become smaller.

If you have assets in Mt. Gox, get them out now. There are too many red flags about that business.

Re:Uh oh. Maybe the money isn't there. (1)

tepples (727027) | about a year ago | (#44079703)

Mt. Gox withdrawal limits

Can be increased if you provide photo ID. For comparison, you have to provide photo ID to get a bank account or even to verify a Facebook account without having your own cell phone number that isn't shared with another Facebook user.

Re:Uh oh. Maybe the money isn't there. (1)

Animats (122034) | about a year ago | (#44079881)

Their highest tier is "Maximum monthly withdrawal of 500,000 USD (or equivalent) capped to a maximum of 100,000 USD per 24 hrs and a 10,000 BTC withdrawal per 24hrs without any monthly limit." That's small in financial terms.

Re:Uh oh. Maybe the money isn't there. (0)

Anonymous Coward | about a year ago | (#44080007)

Their highest *public* tier.

Photo ID... (0)

Anonymous Coward | about a year ago | (#44080191)

or photoshopped ID. Fuck the fed. Tell your congressman to repeal bank secrecy act and support open banking act now!

Re:Uh oh. Maybe the money isn't there. (0)

Anonymous Coward | about a year ago | (#44079873)

If you have assets in Mt. Gox, get them out now. Hey genius, you can't. RTFA.

Re:Uh oh. Maybe the money isn't there. (1)

subreality (157447) | about a year ago | (#44080013)

Hey other genius, you can. There are other currencies besides USD, or you can trade to BTC and withdraw it.

Re:Uh oh. Maybe the money isn't there. (0)

Anonymous Coward | about a year ago | (#44080187)

They address some of your concerns in this more recent release: http://www.reddit.com/r/Bitcoin/comments/1gsiwy/an_update_from_mt_gox/

Re:Uh oh. Maybe the money isn't there. (0)

Anonymous Coward | about a year ago | (#44080335)

That's a typical Mt. Gox excuse. "We're going to hold onto your money for some vague amount of time for some vague reason." Note that they're only stopping withdrawals from Mt. Gox, not inbound transfers. That's very suspicious.

And if this was PayPal instead of the object of worship of a bunch of nerds, there would be pitchforks and shivs made out of old, broken down CRTs at hand.

Instead, we have and will continue to have a bunch of apologetics, whining eternally about how evil "the banks" are.

More likely (1)

DrXym (126579) | about a year ago | (#44079649)

This reluctance may be fed by the sense that Bitcoin poses a threat to the banking industry.

Or more likely from the sense it could draw the full weight of federal law down on them for facilitating money laundering.

No US $ (1)

rossdee (243626) | about a year ago | (#44079661)

But can you withdraw Euros, or Pounds (Sterling) or Yen or Lunies ?

Re:No US $ (1)

Anonymous Coward | about a year ago | (#44079973)

Yes, and you can also withdraw Bitcoins.

So it's just a matter of selling the USD for BTC, then selling the BTC for USD in another exchange.

Re:No US $ (1)

tftp (111690) | about a year ago | (#44080053)

If the largest exchange does not want to buy your BTC in the quantity that you are selling, what is the chance that a smaller exchange or two will do that? They are not the largest exchange for a reason.

Gee (1)

shentino (1139071) | about a year ago | (#44080037)

I wonder if Mt. Gox having their bank accounts seized by the feds has anything to do with it.

That's the thing about asset forfeiture. If the feds drop a nuke on you, anyone you owe money to gets shafted by the fallout even if they're completely innocent.

Re:Gee (1)

Anonymous Coward | about a year ago | (#44080255)

All the more reason why Bitcoin is important. Being immune to seizure provides more security to your customers as well as your business.

put a dent in some banking transaction processing (1)

Thaelon (250687) | about a year ago | (#44080095)

Anyone can transfer Bitcoins anywhere for free and that could put a dent in some banking transaction processing fees.

In other words, it's a lot more efficient and cuts out the now unnecessary plethora of middlemen.

Welcome to the future!

I'd would short sell stocks in banks & credit card processors if you're dumb enough to still have any. It may not be bitcoin, but it will be a digital distributed currency that kills the banks.

If it weren't for the continuous and ongoing bailouts they would have already collapsed and they are going to do so.

Doesn't this defeat the point of Bitcoin? (2)

EdgePenguin (2646733) | about a year ago | (#44080175)

Surely having your Bitcoins held by a third party (especially one that, going on this story, might not be entirely honest about its internal workings) defeats the point of a 'decentralised' currency? How is being at the mercy of these clowns any different from being at the mercy of your governments central bank?

Well, one difference is that you can vote for the government that controls your central bank. With this lots its just caveat emptor

Re:Doesn't this defeat the point of Bitcoin? (1)

gl4ss (559668) | about a year ago | (#44080495)

well.. you need to keep them in there for trading - at least for transient amount of time.

but this could be one thing why they can't comply with US regs.they cannot seize the bitcoins that have been bought through their system. even if the culprits could turn them back into cash through their system. if you just look at it as a website that you put money into and take money in it acts like a bank, so you would need to convince the lawyers that it's not just a semantic trick why you are unable to seize assets if told to do so since the client is actually holding the "balance" in his wallet - and not in your website database.

Re:Doesn't this defeat the point of Bitcoin? (1)

EdgePenguin (2646733) | about a year ago | (#44080543)

If I understand Mt. Gox's website correctly, they do hold your BitCoins in their own wallets, and they can be transferred to the client upon request. If true, this raises the question of whether they actually hold a full reserve of the BitCoins they claim to.

Castles made of sand, fall in the sea, eventually (1)

Eightbitgnosis (1571875) | about a year ago | (#44080551)

Bitcoin is really an amazing thing. The ability and ease by which you can send any fraction of money anywhere rather easily is quite an accomplishment. Yet, without any sort of insurance I do not believe this market can stand. Sure you can keep your coins in a paper wallet offline, but those coins have to come back online sometime. When they do, you may just be the victim of just the right 0-day exploit and suddenly all your coins have been sent off to a mysterious Bitcoin address.

Was that the majority of your savings? Too bad, so sad. Feel free to file a police report that will do absolutely nothing though.

And so castles made of sand, melts into the sea eventually.

Re:Castles made of sand, fall in the sea, eventual (0)

Anonymous Coward | about a year ago | (#44080671)

OR you could invest in some company stock which then turns out to be Enron. People got their money back from that, right?

Re:Castles made of sand, fall in the sea, eventual (1)

Eightbitgnosis (1571875) | about a year ago | (#44080709)

In Enron's case perpetrators of that scam went to jail, and at least paid some of the money they lost back. I doubt a person could get a fraction of that amount of justice after getting their Bitcoins stolen.
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