Great Depression Bank Crash. Savings & Loan Crisis. Mortgage Crisis. Bernie Madoff Hedge Fund Ponzi Scheme. Enron. MF Global. Mt. Gox.
Searching the above terms online you will notice that the following all have one thing in common. Financial losses were incurred in each case. In the case of banks crashing during the great depression and the life savings of many Americans vanishing, the answer was not to make banks illegal due to financial losses, instead it led to the creation of the Federal Deposit Insurance Corporation (FDIC) to protect against a situation like this occuring in the future. Another example in the banking sector is the Savings & Loan Crisis of the 1980's and early 1990's where huge financial losses were apparent. The government's response was not to kill off savings and loans companies but to provide additional oversight and regulation to monitor them closely in order to prevent this horrible financial situation from happening again.
Given that the mortgage crisis is relatively fresh and had been covered vastly in the news media, great detail will not be given to this. What will be said is that many Americans we now know were given incredibly bad deals with these mortgages. However, the concept of mortgages in America were not abolished. Different policies were formed for the purpose of protecting the consumer.
The 55 billion dollar Ponzi Scheme the was run by Bernie Madoff did not cause any senators to say that we need to ban every hedge fund in the industry due to the infractions of one individual. There was no guilty by association in this scenario. The wealthy continue to use hedge funds and probably even more now than when Madoff engaged in his chicanery.
Enron. Take a minute and think about how many employees who worked for Enron lost their life saving by investing in the company that they worked for. There were no government warnings to people telling them to be careful about the money they invest with companies that they work for. Enron was treated as an isolated event, the exception rather than the rule.
Before Mt. Gox is discussed MF Global will be mentioned. MF Global was a commodities brokerage that got into trouble for having customer funds in a place where it had no business being. Luckily customers were able to receive most of their money back. The point is that commodity brokerages were not outlawed simply because of the iladvised decisions of MF Global.
At this point in time those running Mt. Gox are the equivalent to camel feces. The issues that they claim to have had were ongoing for years however the truth did not come out until over 300 million dollars worth of Bitcoin were missing. This is just an opinion and it could be wrong, which is the belief among people in Bitcoin circles that the missing Bitcoins may have been fleeced from within Mt. Gox.
Journalistic Laziness & Ineptitude on the Subject of Bitcoin
No, Journalist the failure of one exchange is not the end of cryptography. If anything it is still in its infancy and over time birth will be given to bigger and better things within the subject matter. Giving gloom and doom headlines does grab the attention of readers in the ever so dying newspaper business, however it does a disservice to cryptography technology by stoking public fear and doing very little to educate the public on what this actually is. When discussing Bitcoin, a guilty by association approach is used which is a stupid thing to do. Just like you cannot slander another company due to Target's data breach, MF Global's co-mingling of customer funds, nor can you blame every hedge fund on Wall St. due to the criminal acts of Bernie Madoff. That would be completely nonsensical. However within journalism that is what is currently being done with Bitcoin and it is actually accepted. Please speak not of what you do not know, educate yourself and inform others as to what will exist in our future.
Conclusion
Bitcoin is imperfect just like many monetary systems around the globe. The only difference is that there is no Bitcoin Central Bank to print coins whenever there is a man-made crisis. Moving Bitcoin and other crypto-currencies forward there will be obstacles, setbacks, and many learning experiences that will have to take place to move this world changing concept onward. What does not help is when those who are uninformed write things that purposely try to discredit Bitcoin which sounds rather foolish to those who are truly informed. Getting involved in Bitcoin is risky and the public should be made aware of it. However, when you try to connect Bitcoin to organized crime and money laundering then that right there is slanderous considering fiat currency is used to launder money and no one is discussing getting rid of it. In the end who this really hurts is not those in places that have access to banks at their finger tips. Attempting to discredit virtual currency and its progress hurts the more than 2.5 billion people globally that lack access to banks. This is a rather fascinating concept and technologically revolutionary. If you believe in the laws of free market then embrace Bitcoin.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.