trials and tribulations of bitcoin—mtgox crash, nakamoto outed

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20130513-Bitcoin-Crash-Excitementhi all. wild and crazy few weeks for bitcoin. future shock realized. many links below in sections.

[b] mt gox disaster/ failure/ crash/ implosion/ uncontrolled demolition! on an epic scale! they are estimated to have about ~$½B in BTC which at current valuations is roughly 1/16th the total market cap of BTC. the currency fluctuated up to an outsize ~¼ in total value! and then stabilized.

what exactly caused it? ceo karpeles amateurism/negligence/ineptitude is high on the list of suspects right now— its still not clear but the good news is that its not a design flaw in bitcoin (according to other bitcoin authorities). theres lots of rumors, there is even a rumor they lost a key to a large “cold storage/account”. this is a counterintuitive aspect of the currency for outsiders but well understood by insiders. if you lose your private keys, its as good as burning your money! or rather, cyber-deleting it!

[c] satoshi nakamoto apparently OUTED. its still a bit ambiguous at this early point but if it really is him, it appears he wanted to take some pride in his scientific work by using his real name. hes reputed to be worth $½B in bitcoin at current valuations (strange coincidence, same size as mt gox!). the media-paparazzi-industrial-complex is likely to pay a lot of attn to him, in this way he is like other new internet/cyberspace-created celebrities like bieber, assange, snowden, manning. not always pretty but a sign of the times. but why not? he ranks as one of the greatest inventors in history if you ask me.

when bitcoin was small, he was able to keep his relative anonymity, but now that its a world-changing currency, it just impossible to stay out of the limelight. also am guessing he will have to change his lifestyle and maybe even hire security, possibly even move away from living in suburbia.

also, American Bitcoin exchange CEO found dead of possible suicide in Singapore home.

[d] activity on busting, rules, regulations enforced or on the horizon.

[e] scalability is a big deal with bitcoin, and there are widely varying accounts of how well it is currently scaling and will scale in the future. a bunch of concern over how much electricity it all consumes, which is a good point, but a thought occurred to me that the cost of regular physical cash management is quite large. there is an intrinsic cost to currency incl things like anticounterfeiting, enforcement, etc… how many US Currency cash counting and anticounterfeiting devices exist in the world across all kinds of banks? articles that talk about “cost” of bitcoin do not do a ROI analysis of it compared to existing cash systems, and that would be a very complex comparison to make accurately weighing all the factors. (scientific paper anyone?) bitcoin will definitely have some advantages over existing physical/paper-based/fiat currency systems…

[f] found several bitcoin stock markets, havent heard the MSM talk about them at all, suspect they will be a major gamechanger but subject to similar trials and tribulations (imagine bitcoin stocks crashing or even someday a high-volume exchange going down or going bankrupt).

a. bitcoin2

b. gox

c. nakamoto outed

d. busting/rules/regulation

e. scalability

f. bitcoin stock markets

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