Yeah, this article is a load of crap. I read through the whole CFPB guidance, and I suggest you do the same, very carefully. The governments position is largely neutral, with some factual errors and some bitcoin-negative bias. But, reading the news coverage of the government report, one would be led to think the government said "Warning: Stay Away". In fact, the report was much more in the direction of "Bitcoin: Here is what you need to watch out for if you want to safely engage"
The government report is actually an opportunity for us. It sets a minimum for FUD. Any journalist that is more negative and less informed on bitcoin than the government, we have something "official" we can use to refer them to.
Here is an except from the CFPB report:
Further, virtual currencies are not kept in banks or credit unions. In order to use virtual currencies, you need to store them in a "digital wallet," which are identified by your "public keys." To access the virtual currency in your digital wallet, you use "private keys." (Your private keys are random sequences of 64 letters and numbers that should be kept secret; your public keys are corresponding letter/number sequences that everyone can see on the blockchain.) If you want to send someone your virtual currency, for example as payment, you use the private keys to unlock your digital wallet. In many ways, your private keys are your virtual currency so keeping your private keys secret is critical to owning and using virtual currency. You can store and protect your private keys yourself or entrust them to a company called a wallet provider to protect them for you.
This is what I wrote to Michael Hiltzik, the author of the LA Times piece:
Hi,
The CFPB guidance had some misleading parts to it, and outright incorrect parts as well. I would hope a reputable journalist such as yourself would do some fact checking before re-posting, and thereby promoting, incorrect facts.
But, in the case of your article, it is actually worse than that. When you attempted to paraphrase some of CFPB guidance, some of which was correct to begin with, your paraphrasing resulted in incorrect information!!!!
You write: "Despite promoters' assertions that bitcoins are secure, they are vulnerable to hacks, thefts of digital security keys, and scams. Bogus exchanges and traders lie in wait to shear innocent sheep."
Where does it say this in the guidance? There is not a single example of transaction being authorized without being signed by the appropriate private key.
In short, the guidance 80% correct, 20% incorrect. Your article makes that ratio worse. If anything, a journalist should be calling out the government's mistakes, and leaving the reader with an improved ratio of fact to fiction.
In the following link, you can find a detailed analysis I have provided of the CFPB guidance
https://bitcointalksearch.org/topic/2014-08-12-us-watchdog-calls-bitcoin-wild-west-of-finance-735053I would also be willing to give you a more detailed report on where you went astray, if you are interested. I would also be willing to help you better understand what Bitcoin actually is and how it functions so you can give your readers better advice and coverage of this subject.
Thanks,
He brushed me off with a link to the CFPB report, which I obviously had already read.
