Posts by witsub 5 publicly visible posts • joined 2 Jun 2013
Bitcoins today - many weeks after the "closure of the MtGox window" [suspension of bitcoin withdrawals from MtGox, for those who refuse to remember history] are still trading for hundreds of dollars each. "Liquifaction" - liquidation - is manifestly premature. Seems to me that a careful, detailed forensic investigation (which should return more than its cost) would benefit all identifiable creditors.
Here we are, months past the original closing of the MtGox withdrawal window, and bitcoins are still trading for hundreds of dollars each. Seems to me that the proper procedure for resolving this issue is careful adjudication of all viable claims on the remaining assets of MtGox, including forensic inspection of the MtGox transaction history. I expect that my MtGox holdings will share equally with those of all other identifiable speculators/investors in this process, and I prefer that my cash and bitcoin holdings be returned to me in equivalent proportions to all claimants. Outright dissolution is obviously premature.
Indeed, regulatory stability is a requirement. And regulatory stability is one thing I would love to be able to expect from our government.
As long as MtGox keeps to the legislation under which it operates, the government will prosecute a crime any attack on it. After all, there is real money involved.
The recent impounding of the cash held by the transfer agent between MtGox and Dwolla appears to have been that it allegedly failed to comply with FinCEN rules regarding registration as a money exchanger (if I got it right). If so, it seems to me likely that the outcome is going to vindicate MtGox, Dwolla, and the transfer agent.
Seems to me you failed to understand the article you quoted. Somalia's currency came back into circulation precisely because there was a limited amount of it and no more could be printed. The whole argument in favor of a quite rigid supply of money is beautifully articulated in von Mises "Theory of Money and Credit" - Krugman's nonsense to the contrary notwithstanding.
The article asks "Why, then, are Somali shillings, issued in the name of a government that ceased to exist long ago and backed by no reserves of any kind, still in use?"
It answers:
"One reason may be that the supply of shillings has remained fairly fixed. Rival warlords issued their own shillings for a while and there are a fair number of fakes in circulation. But the lack of an official printing press able to expand the money supply has given the pre-1992 shilling a certain cachet. Even the forgeries do it the honour of declaring they were printed before the central bank collapsed: implausibly crisp red 1,000-shilling notes, with their basket weavers on the front and orderly docks on the back, declare they were printed in the capital in 1990."
This is precisely what von Mises articulates in his book. The real key is the money supply is STABLE. It is the "LACK OF A PRINTING PRESS ABLE TO EXPAND THE MONEY SUPPLY" that does the job.
According to my (admittedly vague) understanding, transaction fees are paid to miners, and higher transaction fees get processed faster than lower ones. Transactors are responsible for setting the transaction fees. This allows a competitive marketplace to drive the current transaction fee lower if ample miners are operating or set it higher to get a quicker response if needed. This seems to me quite ingenious.
I derived this understanding from the statement on my first Bitcoin wallet (from bitcoin-Qt) that asked me to set what I wanted my transaction fee to be. In the Settings field, I find "Optional transaction fee per kB that helps you make sure your transactions are processed quickly. Most transactions are 1kB. Fee 0.01 recommended." Then, there is a field that I can set that says "Pay transaction fee [0.00000000]" -- the field allows 1 satoshi transaction fee. Up-down arrows controlling that field increment/decrement in 0.001B amounts. I can, however, set it lower or higher if I choose.
As I have not yet actually "spent" any Bitcoins, I have not had to decide the transaction fee I am willing to pay, and have not yet really inquired of the Bitcoin community if my understanding is correct. It truly appeals to me, though, to have transaction fees set by market supply/demand (of transaction validation) rather than a rather arbitrary 0.025%. I am currently paying a much lower percentage for each of my Dwolla transactions, so .025% looks high - particularly in view of my initial BItcoin wallet recommendation (assuming the .01 in the wallet quote means .01% - this is a bit ambiguous).
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