[zAy0LfpBZLC8mAC]

But you do realize that those arguments are for _bitcoin_ and not for _exchanges_? The decentralization of _bitcoin_ is supposedly an advantage precisely because _exchanges_ (like MtGox) and other central organizations like banks are prone to failure due to fraud and mismanagement.

So, they are essentially saying "We need bitcoin because we don't want to trust institutions like MtGox because they might fail" and you say "They are hypocritical because the failure that they are warning us about and that they suggest a solution to did indeed happen". You have a strange definition of hypocrisy.

[dragonwriter]

Yeah, its clearly not hypocrisy.

OTOH, it should be also clear that there is a problem with the pro-bitcoin argument here, as bitcoin hasn't yet solved the need for instititutions like exchanges. Which shouldn't be surprising, as the thing that bitcoin directly decentralizes (transaction validation and currency issuance) aren't the functions that exchanges serve.

[zAy0LfpBZLC8mAC]

Well, yes and no.

Apart from allowing you to find someone to trade with, validating the actual trade/settling the trade is an important part of an exchange as well, and those at least in principle could be solved using bitcoin-based technology.

And also, bitcoin at least partially could "solve" the problem by just not requiring the use of an exchange anymore once it has sufficient adoption. After all, most people don't directly need an exchange in order to use their local currency either.

And finally, there are suggestions how an exchange could prove its BTC liquidity using the bitcoin system, which would also solve at least part of the abuse potential of a centralized institution.

But yeah, it's not fully solved (yet?) and I simplified things a bit, but I think nothing that has any impact on my argument.

[wpietri]

I'm not saying that anybody who had money in Bitcoin is a hypocrite. But anybody who had money in MtGox, lost it, and now wants help getting it back is hypocritical if they were also singing the praises of Bitcoin in those ways. And that presuming that people with money in MtGox were Bitcoin proponents is not a giant stretch.

[celticninja]

I would have to disagree.

>And that presuming that people with money in MtGox were Bitcoin proponents is not a giant stretch.

It is a giant stretch given that most people who knew a lot about bitcoin and the bitcoin economy, the proponents of bitcoin as it were, have had concerns over mtgox for quite some time. Actually I imagine many people who lost btc and/or fiat at mtgox were relative newcomers who were unaware of the ongoing problems and just saw mtgox as the largest exchange and most public facing one at that. So you are making a huge assumption on which you base your choice to condemn people for their choice.

There have been plenty of these sorts of comments all over the internet since mtgox collapsed,essentially saying:

"champion that it is not regulated, go running to the regulators when a problem arises"

the thing is that never has any one of these comments been followed up with an example or instance where the same person has espoused both beliefs/statements. This is generally because they dont exist and/or the commenter doesnt want to do any work to prove their point they just want to denigrate people they think they are smarter than. An exercise in self-pomposity essentially.

[zAy0LfpBZLC8mAC]

Where is there hypocrisy in that? I just can't see any.

[wpietri]

The kind I'm seeing is celebrating uncontrollability and then suddenly wanting the benefits of control.

[zAy0LfpBZLC8mAC]

I think you completely don't understand their position. Noone is "celebrating uncontrollability" (well, someone probably is, but it's certainly not a majority). If anything, proponents of bitcoin celebrate independence - which you might frame es trading controllability by institutions for controllability by individuals.

Their argument is that the decentralized nature of bitcoin allows an individual to secure their bitcoin balance without having to rely on any particular institution, which means one can avoid the risks associated with corrupt or otherwise potentially not trustworthy institutions.

Now, this argument obviously does not apply to MtGox - MtGox obviously was/is a centralized company that also obviously has all the risks associated with such a centralized company, and also all the institutional controllability of a centralized company, it's registered in Tokyo, it falls under Japanese jurisdiction, the state could easily have frozen balances people held with them, be it in bitcoin or in USD or EUR or JPY or whatever, ... in short: It is pretty much a Japanese bank, which incidentally allowed trading and storing bitcoin with them. As such, why is it hypocrisy to expect it to be treated like a bank? You have all the risks of using a bank, why not the advantages of using a bank?

But also: Well, even if this was about some stealing someone else's bitcoins (well, it kindof is, as far as MtGox itself is concerned, at least if they are to be believed): Why would it be hypocritical to ask for help from others just because you tried to minimize the need for such help and this also caused the help that you need in the end to be a bit harder to provide? It might even still be an overall benefit to society.

I guess that you might disagree with some of the supposed benefits that proponents of bitcoin claim - but that does not make them hypocritical, just possibly wrong, and it would probably be more constructive to point out where you think their idea will fail in reality or where you disagree with their goals than to accuse them of being hypocritical.

[wpietri]

The reason I still find it hypocritical in this case is that Bitcoin is currently approximately useless. People were using MtGox to essentially place bets on the future of Bitcoin. Some people surely didn't get as far as hypocrisy; having no clearly formed views on the purpose and future of financial infrastructure, they were just chasing tulip bulbs. But I think betting on a technology whose major feature is independence from traditional regulation and then expecting traditional regulators to bail you out when it's not all wine and roses is essentially hypocritical.

[zAy0LfpBZLC8mAC]

Oh gee, that's really a lot of fallacies.

Yes, people used the bank called MtGox in order to bet on the future of bitcoin, just as they use other banks in order to buy stocks of companies in order to bet on their future, often without having a clearly formed view on what the company will be doing in the future, and more often than not with the hope that some particular company will disrupt how a certain business is being done, sometimes even some financial business. That's what we generally call financial capitalism. Just because you are betting on some not fully determined future does not make it a tulip bulb bubble.

Also, "independence from regulation" is not about "not paying taxes" or "not helping other people" or whatever your preconceptions might be, it is about achieving the same things that regulation is supposed to achieve, just without regulation. One major purpose of regulation is to make sure that a bank that you put your money in does not do overly risky things with your money so that you can be sure your money is still there when you need it. The value proposition of bitcoin is that the nature of the technology prevents the abuses in the first place, so there is no bank that could possibly do risky things with your money, so there is no need for regulation in order to keep it safe. Bitcoin proponents are not necessarily "against regulation", but rather "for a better alternative to regulation where there is one". Hence, it's not inconsistent at all, let alone hypocritical, that they expect to make use of the advantages of regulation where it is needed - such as the MtGox bank, which is not bitcoin, and thus does not provide the technical protection promoted by bitcoin proponents, and has to rely on regulation instead.

By the way, are you possibly confusing regulatory protection from bank failure with some kind of protection against a failed investment? If at all, this is about recovering the balances people held with the MtGox bank, not about reimbursing them for money they lost because they invested in bitcoin - it's just like when any other bank fails, really: If you buy IBM shares through your bank, you might expect that the financial industry as a whole would make sure that those shares really are there and you can transfer your shares to a different bank when your bank fails, even if those happen to be shares of a competing bank - but if IBM went bust, you obviously would not expect to be able to recover the money you paid for the shares from anyone, that's your investment risk.

And no, just because you promote some way of doing something does not make it hypocritical when you don't actually do it. Just look up the definition, it just isn't. Hypocrisy is when you claim to be doing something which you actually are not. Plus, there isn't even any inconsistency - when you bet on a technology that would make regulation unnecessary in the future, why should that mean that you should not make use of regulation where it actually is necessary?