Quote from: PawShaker on October 15, 2012, 01:52:49 PM

In my opinion the problem is much deeper. Securities, by their definition, are contracts. In other words, they are agreements. They have consequences outside of the virtual domain. For securities to work there has to be some sanction for braking the contract.

Typical conditions for any security is that the management must inform investors honestly. Now, how on earth, we can get a distributed tribunal to judge that? What kind of sanction can be applied in a quasi anonymous habitat where nicks are dime per dozen?

Something like whoever makes a block with this transaction will be a judge does not work, because you need some qualifications to be a judge. For instance, judge should not be 12 year old. Please keep in mind that there is no restriction on age of miners.

+100

Being aware of this, right here, is the shortest way to explain why I stayed miles away from "investing" in any Bitcoin "stocks". Here at Bitcointalk, we seem keen on showing contempt for the status quo legal framework - the one that lets securities function in any way beyond scamcoins that work on the honor system - and finding brilliant ways to invent our way out of it, without realizing that doing so is about as brilliant as a goldfish inventing its way out of a bowl.

A distributed exchange benefits only scammers. If one can use distributed technology to evade accountability from the law, one can also use it to evade accountability from their shareholders, effectively negating any and all value inherent in owning shares. It's a software-based screen-door submarine, it just doesn't work.

Shhh, keep this a secret, the scammers will be upset if everyone figures this out!