Mon, Mar 03, 2014 - Page 9 News List

Restoring the luster to bitcoin in the wake of Mt. Gox

The digital currency has a problem with robberies that needs to be sorted if it is to survive. Some proponents are urging steps that are anathema to many in the community: regulation of the currency and a move away from anonymity

By Alex Hern  /  The Guardian

Others are proposing a move away from another of bitcoin’s guiding principles: anonymity.

“Anonymity prevents reversal of transactions, but with a trend away from anonymity, transactions will be visible and thereby reversible under certain circumstances,” Mangrove Capital Partners venture capitalist Michael Jackson says. “A depositor protection scheme will come. In ‘real’ currencies, this protection is provided by the central banks, or currency issuers. With no central bank, the industry needs to take this role.”

However, there is not currently any technical basis for such a change, and it is unclear if a non-anonymous bitcoin is even theoretically possible.

Bitcoin still has long term issues regarding transaction speed, price volatility and ease of use, as well as finding a killer app that is not online drug sales, but those take a back seat to the need to credibly reassure people who own bitcoins that their cash is safe.

It needs to replace Mt. Gox with Fort Knox.

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