[Stubb]

There's also the question of where the money will come from to improve the technology. One of the benefits of BTC is the low transaction cost. But it might be that those transaction costs are exactly what's needed to fund exchange development.

[RyanZAG]

I think you've hit the nail on the head here - scaling up a real exchange is incredibly difficult and the kind of talent you need to hire probably has a price tag hugely in excess of the revenue of all BTC exchanges combined. These guys are probably struggling to even understand the problems they're experiencing, so it should come as no surprise that they're having technical difficulties.

I bet they're having even more legal difficulties though, as just running a regular share exchange requires a team of top notch lawyers to keep abreast of the huge volume of exchange laws. I doubt poor MtGox even has 1 full time qualified lawyer and they're dealing with entirely new legal ground.

[koliber]

Whatever happens, the market will set the price. Perhaps the current transaction costs are too low to enable high-quality scalable exchanges with the necessary tools (whatever they may be). However, if such exchanges are advantageous, the transaction cost will rise.

[jessedhillon]

There are plenty of talented people who believe in BTC enough that they would work to get in on the ground floor of an exchange. Who do you think are designing custom ASICs for mining?

[glesica]

http://www.cringely.com/2013/09/30/doubts-bitcoin/

^ points out some nice parallels between the "Bitcoin rush" and the California gold rush. One of the points he makes is that it wasn't the miners, by and large, who ended up rich. It was the people who sold equipment and supplies to the miners. The namesake of Stanford University was one of them, interestingly.

[RyanZAG]

As far as I know, the guys making custom ASICs for mining are selling them to miners for real dollars. I don't think that helps your point much.

[jbrechtel]

Why do you think that?

The top sellers of mining hardware that I could find on Google (Butterfly Labs, Advanced Miners, Cointerra) all accept Bitcoin for payment.

Are you referring to some group upstream of the hardware sellers? I'm curious where you're getting this information from...

[awj]

Do they "accept bitcoin" in the way that many big services do, where they get their payment out of bitcoin and into cash as soon as possible?

[jbrechtel]

Maybe, what's your point?