Hey John Galt, how do you like your unregulated currency now? Bitcoin plunging in value, specifically on exchange Mt. Gox under $100 while in the rest of the world Bitcoins trade for right around $600.
The reason? An old fashioned run on the bank at Mt. Gox. This is a virtual version of the scene in It’s a Wonderful Life when Jimmy Stewart goes to Bailey Savings and Loan. Similary, the Bitcoin depositors at Mt. Gox can't get their money out. That’s the problem with these shady, gray market exchanges; they essentially crush Bitcoin’s value when you can’t convert it to cold hard cash.
Mt. Gox is basically dead as a doornail. It’s gone folks, it’s sad, but Mt. Gox has a serious reputation problem when you can’t take your money out. This is what it looks like when you don’t regulate currency. It’s a beautiful idea to say this currency can’t be manipulated because all the little wonks went into computer labs and sat in Mom’s basement and made this program where you mine a virtual currency, and the Fed can’t make it worthless. But actually, you can make it worthless.
If something can be manipulated, it will, and if you lost 90% of your value on Mt. Gox, well you might as well go to Japan and figure out who these mystery people are, and ask them if you can have a dime on every dollar you have in the exchange.
This is going to be the issue with Bitcoin. It still might become a legitimate currency, but it depends on acceptance and whether or not this whole 90% decline in value in one day thing keeps happening.
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