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A comment on Bizarre Shadowy Paper-Based Payment System Being Rolled Out Worldwide. Parent comment

Re:Bizarre Shadowy Paper-Based Payment System Being Rolled O... by hapless on Tuesday February 18, 2014 @02:24PM (#7260418)
You give your BTC to MtGox. At this point, you no longer hold your BTC. You have exchanged BTC for a MtGox-denominated currency that is ostensibly convertible to BTC.

At that point, nothing stops MtGox from operating a fractional reserve bank. Or just stealing your deposits.

Substitute any other "exchange" name for MtGox. The principle is the same.

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Re:Bizarre Shadowy Paper-Based Payment System Being Rolled O... by antr on Tuesday February 18, 2014 @03:36PM (#7260858)
that's is not fractional reserve banking. on top of that, yo required another currency (another risk), a requirement you don't need with the current system
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