On Tue, Feb 25, 2014 at 3:01 PM, Juan Garofalo <juan.g71@gmail.com> wrote:

--On Tuesday, February 25, 2014 2:40 PM -0700 Kelly John Rose <iam@kjro.se>
wrote:

> On Tue, Feb 25, 2014 at 1:22 PM, Lodewijk andré de la porte
> <l@odewijk.nl>wrote:
>
>> Their current website announcement is a straight offense too.
>>
>
> I find it somewhat ironic that they are shutting things down to avoid a
> run on the bank. They can't go to fractional reserves without essentially
> upsetting the ideology

What?

> of many of their users and they cannot let their
> users take money out because they didn't implement the most basic
> accounting procedures for these things.
>
> Sadly, this is the precise reason banks are generally heavily regulated.

The problem with the exchange is that they stole the coins, full stop.
That's got nothing to do with regulation. It's plain thievery.

...Unless by regulation you mean the fundamental belief that theft is
wrong...a belief that so called regulators or any other government
supporting retards don't share anyway.

They were given the coins by people who trusted them and their code to not be easily manipulated. Their code was crap and didn't do the tracking properly. They didn't steal the coins, they screwed up the code by not ensuring that it was to the level of quality needed for such a high amount of finance moving through it. This is not theft, it's incompetence. This is closer to your bank leaving it's vault open or, in the case of Target, accidentally having all of the credit card numbers stolen.

The problem here is that it is cheaper in the short term to create crappy code security-wise and push it live than it is to create code that is actually properly implemented for a banking environment to handle both the large amounts of money and the quite serious number of attacks that will take place once the amount of money available is established.

In a competitive environment, the folks who take short cuts will save money in the short term, and thus will be more likely to pick up users than a more expensive equivalent that actually did the security correctly.

Regulations in this circumstance only have the effect of ensuring a certain level of quality and security for the end consumer by levelling the playing field to a certain standard.

Kelly John Rose

Toronto, ON
Phone: +1 647 638-4104
Twitter: @kjrose
Skype: kjrose.pr

Gtalk: iam@kjro.se

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