"Last week, the long-festering bitcoin exchange Mt.Gox failed. It is too early to tell exactly what happened and what will happen next, but I have some predictions: Gox will not be bailed out. Gox’s competitors will not be forced to tax their customers to support Gox’s investors or customers. The bitcoin currency will not be inflated to provide quantitative-easing to keep Gox alive. Gox will not receive 0% loans for half a decade, perverting the incentives of the entire market. Other bitcoin exchanges will not find it more profitable to seek these 0% loans instead of innovating. Gox will not be allowed to acquire smaller companies to fatten their balance sheet to hide losses, nor will Gox be acquired by a larger exchange with loan guarantees from bitcoin miners to hide Gox’s insolvency. Gox executives will not be rewarded with bonuses paid by bitcoin inflation and taxation. Gox will not receive a deferred prosecution because they are too big to jail. Gox will not be even bigger and even less solvent in a few years. Most likely, some people involved in the Gox failure will end up in prison. Gox’s executives will not be invited to Davos to pal-around with the leaders of government. No, those are all things that happen in the “real” economy where de-risking is the toxic fad of the decade and too-big-to-fail is too-big-to-jail."
posted 2 days ago