Friday, February 13, 2015

Bitcoin is a new currency with a lot of uncertainties and asymmetrical information. Its relative value inevitably fluctuates against all other goods more than anything else and is therefore loved by adventurous speculators.

MyCoin Exchange styles itself as a bitcoin exchange, but in essence is a scam. Its operator disappeared along with nearly HK$3 billion.

The so-called exchange has nothing to do with bitcoin. Rather, it is only a casino for people to gamble against each other on the price movement of bitcoin.

When the stakes on the table are high, there is also an irresistible incentive for the house to grab all the stakes and leave.

Politicians, who are conditioned to respond to any question by asking for more laws, say the government should regulate bitcoin.

The culprits, however, are the unregulated financial exchanges.

Believers in crypto-currencies prefer to be governed by mathematics, rather than the ephemeral whims of politicians. On the contrary, those who prefer crypto-currencies to fiat currencies always find politically driven central banks untrustworthy.

Bitcoin is only one crypto-currency and there are literally hundreds more out there. In theory, there is no limit on the kinds of crypto-currencies that are offered globally. Bitcoin has become the de facto standard thanks to the network effect.

But banning bitco

See original here:

Bitcoin value will rise with transparency