[marshray]

I agree. If one ever needed an example of why Mt. Gox or Bitcoin shouldn't be taken seriously. They had a withdrawal limit of $1000 per day, too. This was simply to save one more day of that.

It makes you wonder if Mt. Gox actually had the hard currency to back up everyone's account balance.

[burgerbrain]

The whole point of the exchange is that what you have is only worth what others participating in the exchange are willing to pay.

"It makes you wonder if The New York Stock Exchange actually had the hard currency to back up everyone's account balance."

That doesn't make any sense either.

[marshray]

The point of an exchange is that you can trade one thing for another. E.g., US dollars for bitcoins.

Mt. Gox seems to act like both an exchange and a brokerage. Presumably people have an "account" in which they can deposit and withdraw various currencies.

"It makes you wonder if The New York Stock Exchange actually had the hard currency to back up everyone's account balance." That doesn't make any sense either.

I guess you don't have an account with any brokers participating in the NYSE or other exchanges. You can't open an account without writing them a check. Once you've given them money, you can trade NYSE stocks which may gain or lose value. But the dollars you deposit into your account you should be able to get them out again with low risk.

Each currency or security should represent a zero-sum balance sheet for the exchange as a whole. Unless Mt. Gox spent the hard cash for themselves and hoped the market for bitcoins stayed healthy.

Who do they think they are, a Wall Street investment bank?

I agree it doesn't make any sense (but for a different reason).

[Angostura]

Will MtGox buy bitcoins from me? Will the NYSE buy shares from me?

Are these two things actually alike?

[marshray]

Will MtGox buy bitcoins from me?

AFAICT, yes.

Will the NYSE buy shares from me?

Yes, the NYSE is a building full of member broker dealers who will, in fact, buy shares from you when the proper conditions are met. (I.e., you need to be worth their time).

[sukuriant]

I was under the understanding that not even real banks have all the money of their users on hand. What point are you trying to make?

[marshray]

"Real banks" are highly regulated and in the US are backed up by the US government. I don't know of too many other entities that can handle other people's assets with such low reserve requirements without being considered fraudulent. If there are any, I suspect they're heavily regulated or at least exempted as a speculative private fund.