I may or may not subscribe to your politics, but you are sorely mistaken if you think bitcoin stops most of the problems with the worlds financial system( unless you consider how Central Banks handle the money supply such a problem). Using BTC instead of USD or GBP changes nothing for Goldman-Sachs or Barclays but the denomination used to value the financial instruments they manipulate ( oh and maybe who's tax laws they have to evade).
Even if we are talking about comercial banking as apposed to investment banking, little changes.Bitcoin is just a protocol. However, as more people interact with it via exchanges that may hold their private keys(think mtgox,bitconica, etc), we start to see things that look a lot like comercial banks: organizations run by people entrusted with the currency you store with them. The owners of these "banks",whether we white guys tanned by trips to the cayman islands and the vineyard or monitor-tanned cipher-punks of some more cuddly ethnicity/gender, can and eventually will abuse that privilege. The will abscond with peoples money, commit fraud, issue bad lonas and do any number of other things with it. Moreover, in the case of bitcoin exchanges,there is very little regulation and no legal recourse in the event of theft or default(since all transactions are final and there is no FDIC for bitcoin).
You had me up until the "very little regulation and no legal recourse" part at the end. Theft is theft and believe me, there are regulations against that.
There is regulation against theft( though does any legal authority investigate bitcoin thefts?) . I meant regulations dealing what bitcoin exchanges can do with your money or what steps they have to take to protect it. For example, although I don't think any bitcoin exchanges loan out money yet, if they did, there is no amount they are required to keep as a minimum balance to cover withdrawals (unless the government legally deems them a bank, in which case my entire post is irrelevant)
... You use the exchange for exactly that, exchanging bitcoins, not holding them. Yes an exchange may possess your coins right after you convert your dollars to BTC, but you can just put them in your own account to be held for free.... That wouldn't give the exchange much time to do anything with your money.
I would imagine that even if for some strange reason the Secret Service (who likely would investigate something like this) didn't pick up your claim you would still have grounds for a civil suit. Just insert sympathetic jury!
Even if we are talking about comercial banking as apposed to investment banking, little changes.Bitcoin is just a protocol. However, as more people interact with it via exchanges that may hold their private keys(think mtgox,bitconica, etc), we start to see things that look a lot like comercial banks: organizations run by people entrusted with the currency you store with them. The owners of these "banks",whether we white guys tanned by trips to the cayman islands and the vineyard or monitor-tanned cipher-punks of some more cuddly ethnicity/gender, can and eventually will abuse that privilege. The will abscond with peoples money, commit fraud, issue bad lonas and do any number of other things with it. Moreover, in the case of bitcoin exchanges,there is very little regulation and no legal recourse in the event of theft or default(since all transactions are final and there is no FDIC for bitcoin).