But if MtGox's technical failure effectively took USD$120M of bitcoins offline, then MtGox has reduced the supply of BTC for some period of time, no? I understand that exchanges are secondary markets, but they seem to be contrary to the philosophy of no centralized control over supply/demand. I always understood bitcoin to be a per-transaction, ad hoc currency – not an exchange-traded commodity. Of course, people are free to do whatever they want with their stuff...
Edit: I realized after posting that I called bitcoin a "currency" above. I realize that it's a controversial position, but my feeling is that, as a medium of exchange, it qualifies a currency.
Edit: I realized after posting that I called bitcoin a "currency" above. I realize that it's a controversial position, but my feeling is that, as a medium of exchange, it qualifies a currency.