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Japan police arrest Mt. Gox CEO over loss of Bitcoins: media

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Launched in 2009 by a mysterious computer guru,

https://en.wikipedia.org/wiki/Satoshi_Nakamoto

There is nothing "mysterious" here, from the start the creator of bitcoin has been Satoshi Nakamoto. -Satoshi Nakamoto has never claimed himself to be a "computer guru".

The Mt. Gox exchange briefly halted bitcoin deposits and the exchange rate briefly dipped by 23% to $37 as the event occurred[30][31] before recovering to previous level of approximately $48 in the following hours.

It is very misleading to keep changing the "value" of this case. The true "relative" value should BitCoin at the time of the incident.

-1 ( +1 / -2 )

The case against this guy was spelled out in Japanese weekly magazine like a year ago, not long after the incident. Of course, because they also have articles about how to have intercourse in office stair wells and stuff like that, people don't take their investigative journalism very seriously.

3 ( +4 / -1 )

Bitcoin is interesting but it was always going to be a dumb idea (apart from criminal activity). Their biggest selling point, the fact that no countries' central bank issues or controls them, is also what makes them inherently worthless. The reason that the yen or the dollar are valuable is because people can be thrown in jail unless they buy some. You can't settle your outstanding tax bill in bitcoin.

0 ( +2 / -2 )

I hope justice is served.

2 ( +2 / -0 )

Karpeles wasn't arrested a year and a half ago? Sheesh...

2 ( +2 / -0 )

I hope justice is served.

Agreed. Throw the book at him.

-1 ( +2 / -3 )

What took them so long.

2 ( +2 / -0 )

The complexity of the subject matter means that it is a challenge to investigate the events that occurred at Mt Gox. When millions of dollars worth of bitcoins can be placed on a memory stick, the concept of wrongdoing is no doubt extremely difficult for the Japanese authorities (esp at the top) to comprehend. I don't believe the truth will ever fully emerge but the film about (one day) Mr Karpeles should be a good yarn....

-1 ( +0 / -1 )

You can't settle your outstanding tax bill in bitcoin.

I can't settle my tax bill in US dollars either. That doesn't make them worthless. It just means I have to exchange them for yen to pay my taxes in Japan. Same with bitcoin.

Bitcoin is not a dumb idea, but a genius idea. Lots of people think it will fail, but I have never heard it called dumb.

Unfortunately for much of the public, they are regularly misinformed about bitcoin. Many news headlines referred to Karpeles as "Bitcoin CEO," which is totally confusing - and suggests the journalists don't understand it either.

-2 ( +0 / -2 )

I can't settle my tax bill in US dollars either. That doesn't make them worthless. It just means I have to exchange them for yen to pay my taxes in Japan. Same with bitcoin

That's a silly comparison to make. Of course, you must buy Yen in Japan, you must buy US dollars in America.

The point is that bitcoin does not have the coercive power of the state to force anybody to buy their currency and that is the fundamental weakness it has. Nothing stops a competitor from replacing bitcoin but having control over territory and people who must by the currency ensures that national currencies will always have some value.

0 ( +0 / -0 )

Idiot, total fool, hope he goes to jail for a long time, lost alot of people alot of money with his stupid ego.

1 ( +1 / -0 )

"Farcecoin" is more like it.

1 ( +2 / -1 )

M3M3M3,

The reason that the yen or the dollar are valuable is because people can be thrown in jail unless they buy some. You can't settle your outstanding tax bill in bitcoin.

I don't really see that as being the case. There's nothing about having to pay tax in yen (or any other currency) that makes it valuable.

For example, I can hold all my money in US dollars, and when it comes time to pay the Japanese tax agency, I convert as much of those dollars as is required to yen and then pay the tax. Once a year. That's it.

Yen is more valuable from the perspective of needing some to buy a can of drink from a typical Japanese drink vending machine.

having control over territory and people who must by the currency ensures that national currencies will always have some value.

I think what is actually important is that there is trust in the value. That isn't necessarily guaranteed by a government having control over some strip of land somewhere.

1 ( +1 / -0 )

Yen is more valuable from the perspective of needing some to buy a can of drink from a typical Japanese drink vending machine.

This is true. You can buy goods and services in Japanese yen but it's not an accident that the yen has become the most popular and convenient currency in Japan. The reason I'm focused only on taxes is because it's the irreducible core of strength for any currency. Vending machine companies prefer to be paid in yen because they have to pay their drinks suppliers and as you follow the supply chain you will find that in order to import the aluminum and plastic that make the cans and bottles, someone is coerced into buying yen to pay import duties and consumption tax in order to have their goods released by customs. The preference for the local currency isn't a purely subjective preference.

0 ( +0 / -0 )

The reason I'm focused only on taxes is because it's the irreducible core of strength for any currency.

I think it's only a supporting factor, but not the be-all and end-all.

Consider that Venezuelans are presumably obliged to pay their taxes in bolivars, but they seem to prefer dollars due to bolivar inflation recently running above 700%, according to reports.

... then I did a search for "Venezuela bitcoin" and sure enough, up comes a story.

http://www.newsbtc.com/2015/06/10/hyperinflation-fires-up-bitcoin-adoption-in-venezuela/

0 ( +0 / -0 )

"...having control over territory and people who must by the currency ensures that national currencies will always have some value"

Tell that to citizens of Zimbabwe. Requiring that a currency be used will ensure its existence, but not its value. When a government screws up so much that hyper-inflation sets in, people scramble for alternative currencies, gold and goods that can be easily bartered.

State control of a currency is simply means for the government to control the populace. Bitcoin offers an escape from that. Governments might pass draconian laws to prevent crypto-currency transactions, but the idea behind it very sound - if one leaves politics out of it.

Also remember that states are getting stricter about taking money across borders. Some are enacting strict limits, and enforcing them by permanently relieving of your money at the border. Bitcoin is a way around that as well.

0 ( +1 / -1 )

thats ALOTTA MONEY involved .... i guess ALOTTA DUMBARSES used BITCOIN

0 ( +0 / -0 )

I think it's only a supporting factor, but not the be-all and end-all.

Yes, I agree that taxes are not the only factor, but it's a massive one. Tax revenues in Japan are 28% of GDP, in Sweden it's up to 45%. I don't know about you but the biggest single expenditure I make during the year is my taxes. I and my employer need to buy yen to pay for this. (and exchange into yen is the same as buying, it increases demand and prices)

Also, when I talk about the currency having value, I simply mean that there is a level below which the demand for a national currency will not fall as long as there is human activity taking place within government control which is being taxed.

Tell that to citizens of Zimbabwe. Requiring that a currency be used will ensure its existence, but not its value. When a government screws up so much that hyper-inflation sets in, people scramble for alternative currencies, gold and goods that can be easily bartered.

But legally you still need to pay consumption tax on you barter transactions and taxes on your profits. I think Zimbabwe and Venezuela are two great examples which tend to support what I'm saying. The fact that the value of their hyperinflated currencies has not fallen to absolutely zero shows that they will always have some value as long as the state can create demand by forcing people to buy the currency.

Of course neither of these currencies are good stores of value, but that is actually not what I'm focused on. Most currencies do not hyper-inflate. Some currencies are better stores of value than others but all are pretty poor in the long run.

The only point I really want to make is that bitcoin has the potential of losing all of its value if someone invents another more popular crypto currency, and I see this as a very likely possibility. There is no country called Bitcoinia where someone will be willing to pay at least something for my leftover bitcoins. National currencies on the otherhand will never become unpopular or lose all of their value as long as the government survives.

State control of a currency is simply means for the government to control the populace. Bitcoin offers an escape from that.

Exactly. As long as the state is forcing you to buy what they're selling, there is going to be a certain level of demand. You might think it's liberating but it's also very precarious.

1 ( +1 / -0 )

I think it's scarcity that gives a currency value: as the Japanese and Zimbabwean governments continue to print money like crazy the value of each unit drops. One advantage of Bitcoin is the maximum number is fixed, there can be no "quantitive easing" / mugAbenomics, whatever you want to call it.

1 ( +1 / -0 )

I think Zimbabwe and Venezuela are two great examples which tend to support what I'm saying. The fact that the value of their hyperinflated currencies has not fallen to absolutely zero shows that they will always have some value as long as the state can create demand by forcing people to buy the currency.

The only demand for Zimbabwe's dollar today is as hyperinflation memorabilia by overseas collectors.

According to Wikipedia, "Use of the Zimbabwean dollar as an official currency was effectively abandoned on 12 April 2009. The Zimbabwean dollar is due to be demonetised (no longer legal tender) by the end of 2015."

Venezuela's bolivar is still in the earlier stages of high/hyper?inflation, but the direction doesn't look promising

The only point I really want to make is that bitcoin has the potential of losing all of its value if someone invents another more popular crypto currency

Fair enough.

National currencies on the otherhand will never become unpopular or lose all of their value as long as the government survives.

Not so much the case.

1 ( +1 / -0 )

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