Quote from: pizza_lord on March 12, 2014, 01:56:32 AM

People have faith in putting their money in banks because they are sure they can get it out again.

That's why banks were not 'allowed' to fail.

If the general public lost faith that they could ever get their money out then this would trigger bank runs and capital flight.

We even saw in the UK people queuing up trying to withdraw every penny the had from banks like northern rock when it looked like they might collapse.

People are wary about buying bitcoins because there is no protection via regulation of exchanges or other places were bitcoins are held.

Also they are hearing news about this bitcoin exchange collapsing and the CEO of another exchange committing suicide etc.

If that fear is removed and not only were exchanges regulated like casinos in vegas are regulated and checked (casinos have to hold onsite enough dollars to cover every single chip in play) and insurance companies could then insure regulated exchanges the floodgates to mass acceptance will open.

Wall Street regulated Bitcoin exchanges are going to be run like the gold exchanges.

This means that bitcoins are going to go in and will never see the light of day again.

Your bitcoins will be rehypothecated.

You'll only be able to withdraw bitcoin IOUs, not actual bitcoins on the blockchain.

Market makers will be able to naked short as much as they want, and when they fail to deliver the bitcoins which they never actually had they'll be able to deliver dollars (which they can borrow into existence from the Fed for 0%) instead.

Regulation means that Wall Street wants to enshrine their preferred forms of corruption and fraud into the system while keeping competitors out of the game.