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Comment by fvrghl | Hacker News Reader

I keep reading about how the banking of bitcoins is unstable. It's bad for the image of bitcoin because it seems like it can't be trusted, and lawsuits like these damage the credibility of the currency and the companies.

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Except these issues are with companies that are using the currency not properly understanding local regulations. This had nothing to do with bitcoin as a currency or protocol.

Measuring the stability of BTC requires more consideration than simply the technological merits.

Unfortunately, this is true.

This is true of currency as a whole. Money only has value if people are willing to exchange things for it.

>Money only has value if people are willing to exchange things for it.

True, but, here we are talking about something different. That is, the value of BTC is not simply defined by its technical merits, but can be devalued if the ecosystem for managing/utilizing/exchanging it is unhealthy.

In other words, the value of money is also affected by whether people are able to exchange things for it.

Once you understand the regulations you uncover another issue: the cost of compliance may be more than your company's revenue for the first few years. How do you ever get started in that situation?

Relatedly, Mt. Gox is now counter-suing CoinLab. CoinLab wanted to cut corners on meeting their contractual obligation to obtain the necessary licenses, and argue that they did meet the regulations under the "prepaid access" FinCen exception.

http://www.coindesk.com/mt-gox-countersues-bitcoin-incubator...

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