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Apparent Theft at Mt. Gox Shakes Bitcoin World

nytimes.com

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Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#61

Post by Crito »

PeterisP wrote: post #57
Crito wrote: post #42

Earlier quoted context omitted.

Just because I can buy a bitcoin from somebody for $1000 a few months ago doesn't mean that same person is willing to buy it back from me for $1000 dollars today. The value in that bitcoin has evaporated, disappeared, gone up in smoke. Bitcoins are only worth how much people are willing to pay for them; what was spent on them in the past does not convey to them any value today.

The value hasn't evaporated - if you bought a bitcoin for $1000 a few months ago and now you can sell it for $100, then value of ~$900 (assuming that 'real worth' of USD didn't change much) was transferrend from you to the guy who sold you that bitcoin back then.

No, initially you were in possession of the value, as you could have sold the bitcoin to somebody else for that $1000 dollars. The fall of value in a bitcoin did not somehow go back in time, find the person you bought it from, and transfer value to them.

Think of it this way, I buy a nice car for $100k. The person selling it gets $100k in cash, and I get $100k worth of car. A year later, I crash the car and it is now worth $1k in scrap metal. Where did my $99k worth of value in the car go? Did the dealer somehow acquire that value? No, I simply destroyed it. I destroyed the value of the car, it wasn't taken from me. The value of the cash I gave the dealer? That is more or less still the same, but that is his business, not mine.

Value is not zero sum. Creating and destroying value is trivial.

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#62

Post by talmand »

sp332 wrote: post #53
yeukhon wrote: post #40

I wonder if law enforcement is already questioning him; I am sure FBI has eyes on him already. Yes. I want him to come out and explain to us. Any employees should come out and give us insider stories. Whoever took advantage of this (whether it's criminal or Mt itself) should be punished.

I'm pretty sure the FBI doesn't operate in Japan. (Not like that, anyway.)

Does the FBI even consider bitcoin as something that actually has any value that requires investigating an accusation of theft?

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#63

Post by sp332 »

talmand wrote: post #62
sp332 wrote: post #53

Earlier quoted context omitted.

I'm pretty sure the FBI doesn't operate in Japan. (Not like that, anyway.)

Does the FBI even consider bitcoin as something that actually has any value that requires investigating an accusation of theft?

Sure, I mean the prices were listed by Mt Gox. No one involved in the transactions were claiming that the BTC were of no value. It's just more of a CIA thing :)

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#64

Post by talmand »

eropple wrote: post #56
tempestn wrote: post #41

Earlier quoted context omitted.

I think people (perhaps rationally) believe that the people running the exchanges know more about keeping bitcoins secure than they themselves do. The analogy would be that you're a lot safer putting your money in a bank than trying to keep it safe in your house. And certainly a company whose entire business is trading in bitcoin should know how to keep them safe. Unfortunately the reality is obviously sometimes diff…

> I think people (perhaps rationally) believe that the people running the exchanges know more about keeping bitcoins secure than they themselves do. There was nothing rational about this assumption. Banks are bonded and insured with teams of very, very good security professionals auditing their stuff. Mt fricking Gox? Not so much.

I see this as more of how local banks were before government guarantees started being implemented. If someone robbed the bank it was your money they were taking and not the bank's. Heck, if the bank burned to the ground your money was gone. Made for a tighter community in some cases; you rob the bank the whole town hunts you down.

What was a bank? Any person off the street with a safe in a building who claimed they could keep your money safe for you until you needed it. Sound familiar?

Personally, I would have put about as much trust into these exchanges as I would have of those old banks.

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#65

Post by lucisferre »

gremlinsinc wrote: post #60

Times like these I'm glad I didn't have a dime in gox--but I was never trustful of them, they didn't to seem to be as legit to me as Coinbase or Bitpay -- I'm not 100% sold on some of the other exchanges either - coins-e has left me with a bad taste in my mouth when they held onto my dogecoins for 2 weeks during a transfer request... Luckily I have no money in BTC at all - other than 2k for mining equipment(scrypt) -…

> WHICH it will (too much investment money in too many companies) for it not to.

That sounds like bubble talk to me.

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#66

Post by talmand »

PeterisP wrote: post #57
Crito wrote: post #42

Earlier quoted context omitted.

Just because I can buy a bitcoin from somebody for $1000 a few months ago doesn't mean that same person is willing to buy it back from me for $1000 dollars today. The value in that bitcoin has evaporated, disappeared, gone up in smoke. Bitcoins are only worth how much people are willing to pay for them; what was spent on them in the past does not convey to them any value today.

The value hasn't evaporated - if you bought a bitcoin for $1000 a few months ago and now you can sell it for $100, then value of ~$900 (assuming that 'real worth' of USD didn't change much) was transferrend from you to the guy who sold you that bitcoin back then.

Curious, reverse your example.

You buy at $100 and sell at $1000. Where did the value come from that compelled the new guy to buy it from you at that inflated price? In my thinking, by your example, the new guy wouldn't pay an extra $900 because the value didn't already exist in the bitcoin you are selling.

Or am I just totally messing that up?

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#67

Post by dragonwriter »

talmand wrote: post #62
sp332 wrote: post #53

Earlier quoted context omitted.

I'm pretty sure the FBI doesn't operate in Japan. (Not like that, anyway.)

Does the FBI even consider bitcoin as something that actually has any value that requires investigating an accusation of theft?

> Does the FBI even consider bitcoin as something that actually has any value that requires investigating an accusation of theft?

ISTR that both the US Justice Department and at least one state government in the US has initiated prosecution based on the fact that Bitcoin is a thing with value, so probably.

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#68

Post by abruzzi »

naterator wrote: post #39
blueskin_ wrote: post #37

Saw this coming a mile off. I hope the people who lost bitcoin learn not to keep them anywhere but in their own wallets.

I came late to the Bitcoin party, so when I started mining other coins mid-last year the first thing I did was download the wallet client and encrypt, and backed it up. And I still didn't fully trust that my coins were safe, and that there wasn't some other bug in the protocol that could result in my coins getting stolen somehow (or at least confusion arising as to who owns them). I don't understand how people put so…

I think people who aren't necessarily technically savvy mistakenly treat the exchanges as their local bank. Your local bank follows a huge number of regulations, many of which are designed to keep your money safe. And in the rare event that your bank fails, your accounts are FDIC insured up to $50k (in the US, don't know if other countries have depositors insurance.)

I also think that most (though apparently not all) of the people with millions of USD worth of bitcoins acquired them at low cost so in real terms their loss was mostly on paper. The started at $10k, it ballooned to $10m, and now it is zero. Did they lose $10m or $10k?

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#69

Post by talmand »

mimog wrote: post #36
karmicthreat wrote: post #16

I really wish I had some BTC just to separate some fools from their money. Either through trading on the market or some sort of BTC based gambling. BTC isn't very liquid but I'd bet you could extract 50K in USD from it a year without too much trouble.

>> I really wish I had some BTC So go and buy some

He'd be rich if only "something"...

Re: Apparent Theft at Mt. Gox Shakes Bitcoin World

#70

Post by dragonwriter »

verroq wrote: post #29
kapkapkap wrote: post #28

Earlier quoted context omitted.

No. Its a closed system. For every dollar that someone spent on a bitcoin, that dollar was received by someone else. Now, you can certainly say that the money was spent on things like electricity, or GPU hardware, that has little/no value now. But thats irrelevant - the money most certainly spent, rather than "evaporate" into thin air.

Oh you mean like how millions of Bitcoin market cap disappeared when people jumped off the hype train? Does that look like a closed system to you?

> Does the FBI even consider bitcoin as something that actually has any value that requires investigating an accusation of theft?

Market cap isn't money, its an estimate of value based on a premise that is not merely flawed but outright insane -- that every unit of an asset that exists can be liquidated at the current market price of a single unit (that is, that market clearing price is not effected by supply.)

Its used because its easily calculated, and people are prone to want to believe that values that are easy to calculate are also meaningful.

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