Bitcoins are always portrayed as tangible “coins” rather than intangible, digital “bits”
[courtesy Google Images]
“The price of the digital currency bitcoin slid to its lowest level in nearly two months on Monday after bitcoin digital marketplace Mt. Gox said a halt on withdrawals it announced on Friday would continue indefinitely after it detected “unusual activity.”
“The bitcoin price varied dramatically from one exchange to another, with Tokyo-based Mt. Gox, the best known operator of a bitcoin digital marketplace, recording one of the biggest drops for the day.
“On the Mt. Gox platform the currency plunged to as low as $500 early on Monday, down more than 27 percent from Friday’s final price of $692, according to the Mt. Gox website. It last traded at $595.74, off nearly 14 percent from Friday.”
What’s the “halt on withdrawals [can] continue indefinitely” mean?
It means that the Bitcoin market is manipulated and not a true, free-market currency.
The reason for the halt on withdrawals was said to be “unusual activity”.
What do you suppose “unusual activity” means?
It might mean that the Mt. Gox exchange is heavily invested in Bitcoins, and the free market—or hackers or government—are pushing the price of Bitcoins down, so the Mt. Gox exchange is endeavoring to protect its investment in Bitcoins by refusing to allow withdrawals by people who are bailing out of Bitcoins.
If so, I’ll bet that the Mt. Gox Bitcoin exchange’s “halt on withdrawals” will continue until Mt. Gox has managed to secretly liquidate most of the Bitcoins it currently owns and thereby protect its own wealth. Then, when the management of Mt. Gox is safe from further Bitcoin losses, it will allow its “depositors” to withdraw and sell their Bitcoins for whatever they can get.
Lesson #1: Those who live by the digital currency, die by the digital currency.
Lesson #2: Those who invest their savings in something tangible like gold will be comparatively safe from being robbed by “hackers and bankers and bureaucrats” (Ohh, my!).
