Well, what if you were the investor in a start-up, which failed, and you lost your invested money? Would you consider that the market working as intended? What if you loaned someone some money, and they failed and got bankruptcy, meaning you lost your loan. Is that the market working as intended?
We've created this kind of weird deal with banks, where you loan people money at super-low rates, but in return you're insulated from the normal consequences of failure, and have a ton of flexibility in terms of when you can demand repayment of your loan -- to the point where most people don't probably consider their bank balances a loan.
I'm not here to say that this is a good or a bad thing. Mt. Gox was more like a normal loan or almost every other financial instrument in the world, and less like a bank. It seems hard to suggest that it's uniquely bad for Mt. Gox to act like almost every other financial instrument in the world -- as long as expectations are aligned that it's not the curious anomaly known as a "bank."
I don't have a dog in this fight and I'm not interested in an extended debate... but I don't think most of Mt Gox's customers realized that by letting Mt Gox hold their money they were effectively investing in a high-risk venture under extremely unfavorable terms.
That's their problem, it's a currency exchange, trading is a risky business, giving your money to strangers shouldn't be taken lightly and you shouldn't just presume it's safe. The Gox problems were not a secret, 10 seconds of research would have informed anyone of them.
Or to put it another way, if people properly understood (i) the nature of counterparty risk, and (ii)how the average Bitcoin exchange handled transactions, suddenly those banking fees would seem like an absolute bargain.
Comity! I don't have a dog in the fight either, and I agree that expectations alignment and transparency are key, and that it is likely that neither were present here.
We've created this kind of weird deal with banks, where you loan people money at super-low rates, but in return you're insulated from the normal consequences of failure, and have a ton of flexibility in terms of when you can demand repayment of your loan -- to the point where most people don't probably consider their bank balances a loan.
I'm not here to say that this is a good or a bad thing. Mt. Gox was more like a normal loan or almost every other financial instrument in the world, and less like a bank. It seems hard to suggest that it's uniquely bad for Mt. Gox to act like almost every other financial instrument in the world -- as long as expectations are aligned that it's not the curious anomaly known as a "bank."