[argumentum]

It's unfortunate that many people lost money (and some might have lost a lot), but if the ecosystem can recover from this without governmental regulation (as I expect it will), we have the first evidence (ever) that there is no need for a central authority to conduct oversight and ensure a robust currency.

It looks likely that the free market, which includes the self-regulating actions by Coinbase, Blockchain and others (as well as customer reactions), will punish the bad actors and reward "good" (well managed) companies. It will also create better consumers, who will now be more diligent in evaluating relevant services before they sign up.

You write that you'll be staying away for now, that is your right as a potential participant in the market. We are already seeing the major players (like Coinbase) react to your sentiment by increasing transparency to bolster confidence in their services.

1. This is what we want. 2. When have you seen the existing financial system react so rapidly and thoroughly to the many flaws and disasters incumbent within?

Yes, "a little regulation and oversight might have prevented all this", but it also might have prevented crypto currency from being able to prove its value (or fail to) in the free market.

[aggronn]

> we have the first evidence (ever) that there is no need for a central authority to conduct oversight and ensure a robust currency.

No one has ever doubted that this was possible. 'Robust' currency has existed without a central monetary authority in the past (for millenia!). The reason the Fed exists is because its believe that it takes an existing 'robust' currency and makes it better.

[argumentum]

""The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907"" - http://en.wikipedia.org/wiki/Federal_Reserve_System

The common argument is that the modern, global economy is too complex to govern itself, and prone to disasters.

[aggronn]

I'm not sure how this relates to my comment. Its not a binary issue of whether a currency can or cannot function on its own. Currencies functioned on their own okay before, and after the Fed, they've arguable done better. Whether you believe it or not is immaterial to my point--we have a wealth of evidence that robust currency can exist without a central authority. Just because bitcoin rebounds after some period of time doesn't mean that a) it wouldn't have been worse if there was central authority and regulation, b) that the rebound is translatable to other currencies, or to other crises, c) that the rebound was a result of anything other than exogenous increases in demand.

[justin66]

> It's unfortunate that many people lost money (and some might have lost a lot), but if the ecosystem can recover from this without governmental regulation (as I expect it will), we have the first evidence (ever) that there is no need for a central authority to conduct oversight and ensure a robust currency.

Define "robust."

[serge2k]

As long you are willing to accept losing money to fraud and/or stupidity?

[argumentum]

In the short term, yes, it means some fools* will be hurt by some frauds. Keep in mind, however, that no amount of regulation will prevent Madoff's greed, for example, and the foolishness of those who blindly trusted him.

In the long term, we will be training people to be better and more diligent actors.

If you can determine the guilty party in the case of frauds, you can still report them to the police. This is enough protection.

* I mean fools in the larger sense of acting without diligence. Every one of us has been such a fool at one time or another, and learned painfully from the experience.