How about the fact that they halted trading.  Is that enough reason to never trade with MtGox?

I agree with practically everything you said.  Really.  

I just want to consider everything.  Although I am convinced that inflation is usually very bad for practically everybody (except for *cough*, you know who), I am not convinced that rapid deflation will provide the simple after affect of increased purchasing power.  It can't be that simple.

Looking at the history of gold and silver - there have been plenty of instances (historically speaking) where the volatility in those assets would be unbearable for a conservative investor.  History has shown us that a few entities have the power to play ping pong with those assets.  Manipulation is very prevalent in these markets.  What makes you think bitcoin is immune to this?

In the end, I am very interested in bitcoin's future.  If bitcoin proves to be successful in the long term, I will be the first to defend the statement that the "deflationary spiral" is just a myth.

  To all those people comparing bitcoin to gold - don't kid yourself into thinking they're very similar.  Gold exists in a physical sense.  Of course this has been brought up before.  But it hasn't been taken seriously.

  It is much easier for a bitcoin to disappear forever than it is for an oz of gold to disappear.  Therefore, it is quite possible for there to be a much more rapid rate of deflation than of what there would be with gold / silver / oil or any other supposed to be deflationary assets.  No one can simply claim how the market will react to this deflationary asset because none like it have ever existed.

  This is an experiment.  This is a beta.  Really.  And to be frank, the most recent monetarist experiment of the 20th century failed miserably.

  Bitcoin is meant to be a universal currency.  Not something just for libertarians.

  

I'd expect nothing less than perfect service given the fees we are paying.  You might be slightly better of if you're getting the 0.25%, the fact is most get 0.6% which makles that problem even worse.  The most EXPENSIVE mainstream stock brokers charge $10 per trade.  Compare that with $250+ per trade if I am getting the best rate.

I've been there.

Now everybody is plotting to be the rouge miner to bring down BTC!

But it's very impractical to say "if all bitcoin miners stop mining" - is it not?

On a different note:
I think people are over estimating their confidence by forgetting that this is still technically an experiment.  No one has ever seen a deflationary currency like bitcoin - and therefore I don't think anyone can easily write off any theory provided with reason.

@starsoccer9 forgive me if you thought I was expressing sympathy for MtGox.  I personally highly dislike their % based fee structure.  A flat rate would be much more effective, especially for traders.  It would be even better if we were given the choice on what fee structure to choose from (assuming they do one day implement a flat rate).

On your other point - no one is telling you what you should do with your money as long as it doesn't negatively affect others.

But to be rational, bitcoin is not really ready for REAL day trading - yet.  Unless you are day trading bitcoin with a VERY SMALL sum of money, you can't expect a stable fill price.  If I wanted to use $100,000 to day trade bitcoin I would have to be willing to stomach 3% slippage in price to get my order filled, excluding MtGox commissions.  And given how MtGox handles partial orders and cancelling live orders I really doubt you would want to be in this situation.  To add, MtGox deliberately charges a large comission (0.25% ATLEAST) - that is $250 on 100k.  My stock broker charges me less than 2% of that fee no matter if I trade $100 worth of stock, or $1000000 worth of stock.

The systems aren't in place for effective day trading.  You're WAY better off trading the U.S. stock market if you want to day trade.

*gasp*

You mean the idea of ceteris paribus is impractical in the real world?

You're saying there's a chance that ASICS were already priced into the markets!?  

I can believe that.

But I don't think it's far fetched to think that a new technology will bring down the short term price of bitcoin.  I mean, this may be simple minded - but when new technologies make it more efficient to do something, won't the price go down?

The hash rate per watt of electricity will continue to decrease.  Meanwhile, it will become more common for miners to put more competitive prices of BTC/$ because more and more miners will be able to accept a smaller ROI due to the competition on the exchanges.

Also, bitcoin in it's CURRENT stage is an inflationary asset.  Inflation will continue to remain positive for many more years before official deflation hits.  But what do I know - the markets may have priced this in already as well.

You can be right - but this is a statement based on a scenario - on the scenario that miners will save / hoard their bitcoins.  IMHO this has many ill effects.  Whether or not you (hypothetical) as a miner will sell your produced bitcoins, there will be a miner who will. 

My personal insight regarding my mining output and other miner's outputs is sell like crazy when bitcoin is as expensive as it is today.  Not only is this happening, but it SHOULD happen.  Miners are there to make sure that the price of bitcoin doesn't spiral out of control.  They're also there to make sure bitcoin is trading at a fair price.  At the end of the day, honest miners need to pay for electricity.  Electricity payments aren't accepted in bitcoin - yet.

The initial increase in bitcoins prior to the mining difficulty adjustment will most likely cause a pullback due to supply demand metrics.  Using supply demand metrics this will likely cause a short term pull back in price.

-ak

If someone could, as a U.S. citizen what are the pros and cons from this integration?

Cons:

No more redeemable currency codes?

From what I gather, there will be an initial delay for transferring funds via Dwolla - ultimately in the end will we still be able to use Dwolla?

What else?  I don't think government seizure of funds is realistic for the average user / trader.

Pros:

There will be a way for U.S. customers to directly link a bank account to the exchange?

You simply shouldn't be day trading bitcoin.  The infrastructure isn't in place.  The volume isn't there.  Massive slippage occurs.  When you see tens of millions in USD traded for BTC every minute the story will be different (right now only thousands are traded every minute, very small volume comparing to assets which are actively day traded).  The reason the lag is there is because bitcoin has grown a lot in the past few weeks / months, and the correct tech isn't in place to handle this heavy trading that will eventually be normal for bitcoin.  At this point in the game, it isn't normal.  People who trade stocks often compare bitcoin volume and price behavior to penny stocks (i.e. something that is heavily manipulated).

If you want to day trade there are plenty of other better assets / markets to day trade.

With those things in mind I wouldn't go lower than 75% . . . 70%

But with that said, BTC is currently sky high and you might have to wait a long time to get your investment back. 

This wouldn't worked perfectly if you had done it last week though xD

This is a common misconception.  Not to get into some big argument or anything like that but Marx wrote about the "withering away of the state".  I'm no socialist, but I'm just trying to be fair and claim that anyone of any political ideology can justify their use for bitcoin.

Another thing you would read from Marx is the big time "from each according to their ability, to each according to their need" quote.  The bitcoin p2p network is exactly this, as are torrents.  Each downloads and transacts as they please, and offer whatever bandwidth they can to help others transact.

Simply claiming that this is an invention for libertarians is a road to nowhere, seeing that not everyone is a libertarian.

Met someone IRL to talk about this with.  It seems one is asking for trouble if they're trying to do this over the web.  It is possible to manage if every contact is a family member / friend / acquaintance . . . etc. . .

It will boil down to the fact on whether or not one trusts a stranger with their money.  Given that there are no guarantees or insurances (yet), this can be really scary.

Also, lots of laws in different countries (most of North America, EU, etc...) have very specific laws regarding broker dealers and required permits.  So one would have to be well acquainted with their local laws before proceeding.

But in a country where there are no means to trade  U.S. stocks I would think someone might have interest.

-akspecs

I think BTC will resemble whatever the individual wants it to resemble.

An anarchist will claim that it is perfect anarchy because of it's decentralized existence.

A socialist will claim that it is perfect socialism because of it's peer to peer existence.

(after all, look no further than the world of torrents to see what perfect socialism looks like)

Ben Bernanke will claim that it is the pinnacle of absurd because of it's monetarist qualities, along with lack of central authority.

Bitcoin is what you want it to be.  It's what you make of it.  And nothing more.

Everyone stating silver is on the right page.  The fact that BTC1 > 1 OZ .999 Silver is so cool!  Most of us looking to hold an asset should take advantage of this.

What size are the boots?

Hey man instead of leaving me dead in the water, offer some reasonable criticism.  You are absolutely correct in many senses.  I can die in a motorcycle accident and who would be there to check my obligations?

Instead of saying "STAY AWAY FROM THIS" you could have said "you can seriously implicate yourself and others and I don't think the risk worth it.".  I would've been stubborn and said "wow, I thought this would've been a breath of fresh air giving all the defaulted loans and other drug related use of BTC"...  But I would've taken the skepticism seriously and tried to work around it and provide solutions for potential pitfalls - or even just scrap to whole idea and move to another investment based strategy.

I meant no harm at all.

EDIT:

I can see why there's this skepticism.  But I am honestly trying to become a part of the bitcoin community.  It's pretty silly though from my perspective that I would be met with so much resistance rather than constructive criticism.  You have people defaulting on absurd loans ("hero" members too mind you), borrowing money at absurd rates - trading bitcoin for drugs and weapons.  Maybe there is a better way for me become acquainted and deal with the bitcoin community.  I do enjoy trading and investing, so maybe I can offer more physical ventures.

FURTHER EDIT:


This seems much more sophisticated than what I had in mind :/

Forgive my naivity BTC community.  I'll most likely find another way to transact in BTC.

I don't think the SEC is smart enough to understand BTC, yet.  What is this, insider trading?  Given that you can't buy stock for BTC officially I am addressing a particular gap and inefficiency.  Also, I am using my money that my money I currently have in the market.  I am not violating any laws accepting bitcoin from community members, and using my money to buy stock.

The only real pitfall is taxes.  I would have to pass down taxes I pay as fees.