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Mt. Gox Files for Bankruptcy Protection

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Re: Mt. Gox Files for Bankruptcy Protection

#221

Post by jccooper »

cyphunk wrote: post #173
M4v3R wrote: post #149

Earlier quoted context omitted.

Mt. Gox and many other exchanges have put into people's minds that you HAVE to forfeit your rights to your Bitcoin when using online services. It doesn't have to be that way, though. You could just use a system like we use at Bitalo [1], where fractional reserves or funds misuse are impossible because of use of multi-signature Bitcoin addresses, which means funds are specifically tied to user wallets and exchange ope…

Why would bitalo ever require users ID themselves or provide bank details? multisignature scheme already adds a latency on transaction. just not clear how this exchange works. Is it P2P where users transact between each others bank accounts. If so the AMA/KYC seems unnecessary.

Legal reasons, almost certainly. I don't know about Finland or Germany or EU specifically, but it seems likely they have "money transmitter" requirements to combat money laundering. I doubt the regulators and/or law know or care much about multi-sig transactions. If they touch money changing hands, they almost certainly have to comply.

You can't move money without the government's permission, you know. Very naughty.

Re: Mt. Gox Files for Bankruptcy Protection

#222

Post by zAy0LfpBZLC8mAC »

wpietri wrote: post #208
danielweber wrote: post #158

Earlier quoted context omitted.

I know why you are annoyed, but many libertarians (of the non-anarchist variety) still believe in the court system to recover damages. If they use the courts to recover part of their losses from MtGox's assets there's nothing hypocritical there. If they want a bailout, ie a cash injection, then I'm with you.

Given all of the rhetoric around the distributed, untraceable, unregulated nature of BitCoin, I think an initial assumption of hypocrisy is still not a bad place to start.

But you do realize that those arguments are for _bitcoin_ and not for _exchanges_? The decentralization of _bitcoin_ is supposedly an advantage precisely because _exchanges_ (like MtGox) and other central organizations like banks are prone to failure due to fraud and mismanagement.

So, they are essentially saying "We need bitcoin because we don't want to trust institutions like MtGox because they might fail" and you say "They are hypocritical because the failure that they are warning us about and that they suggest a solution to did indeed happen". You have a strange definition of hypocrisy.

Re: Mt. Gox Files for Bankruptcy Protection

#223

Post by dragonwriter »

zAy0LfpBZLC8mAC wrote: post #222
wpietri wrote: post #208

Earlier quoted context omitted.

Given all of the rhetoric around the distributed, untraceable, unregulated nature of BitCoin, I think an initial assumption of hypocrisy is still not a bad place to start.

But you do realize that those arguments are for _bitcoin_ and not for _exchanges_? The decentralization of _bitcoin_ is supposedly an advantage precisely because _exchanges_ (like MtGox) and other central organizations like banks are prone to failure due to fraud and mismanagement. So, they are essentially saying "We need bitcoin because we don't want to trust institutions like MtGox because they might fail" and you…

Yeah, its clearly not hypocrisy.

OTOH, it should be also clear that there is a problem with the pro-bitcoin argument here, as bitcoin hasn't yet solved the need for instititutions like exchanges. Which shouldn't be surprising, as the thing that bitcoin directly decentralizes (transaction validation and currency issuance) aren't the functions that exchanges serve.

Re: Mt. Gox Files for Bankruptcy Protection

#224

Post by waterlesscloud »

mikro2nd wrote: post #162
scottcanoni wrote: post #138

Earlier quoted context omitted.

Until Mt. Gox publicly confirms that no one will be getting their BTC and/or fiat money back, I think it's wrong to assume money owed to the users has been lost. Please have faith that they will do the right thing.

Given their behaviour to date there's absolutely no rational basis for "faith that they will do the right thing".

Well, as of now, it's not entirely their choice. The courts have a large say in things now.

But I don't think there's a lot of money here to go around, in any case.

Re: Mt. Gox Files for Bankruptcy Protection

#226

Post by devindotcom »

JumpCrisscross wrote: post #71

When you make a deposit you are extending credit. In the case of Mt. Gox, or any other Bitcoin exchange, that credit is secured by nothing and insured by noöne. Advice, going forward, for managing counterparty risk: (1) Split a $100 transaction into 10 $10* transactions executed incrementally (send $10 of BTC to Mt. Gox, exchange it, transfer it out, and only then send the next $10 of BTC over). This keeps exposure a…

Hm. Are there any wallet-exchange metaclients that would do that? Salt your $100 evenly between a few exchanges of your choice?

Re: Mt. Gox Files for Bankruptcy Protection

#227

Post by ericb »

theorique wrote: post #150
mbillie1 wrote: post #145

Earlier quoted context omitted.

> and some people stood to lose their entire savings. While I am not defending MtGox, having your entire life savings wrapped up in Bitcoin is hardly a sound, proven financial decision and evokes absolutely zero sympathy whatsoever. Losing it all in a get-rich-quick frenzy is sad - but it's sad in a "I can't believe people are willing to bet their lives on this" way, not a "this poor person lost his/her entire life s…

Absolutely right. Putting 5-10% of your net worth in something like this is being innovative and forward thinking and taking a calculated risk. Putting 90-95% of your net worth in something like this is serious, foolhardy gambling.

Highhorses are fun to ride, but if you put in 5% of your networth at any point > 8 months ago, it is likely that you ended up with 90-95% of your net worth in Bitcoin.

Re: Mt. Gox Files for Bankruptcy Protection

#228

Post by zAy0LfpBZLC8mAC »

dragonwriter wrote: post #223
zAy0LfpBZLC8mAC wrote: post #222

Earlier quoted context omitted.

But you do realize that those arguments are for _bitcoin_ and not for _exchanges_? The decentralization of _bitcoin_ is supposedly an advantage precisely because _exchanges_ (like MtGox) and other central organizations like banks are prone to failure due to fraud and mismanagement. So, they are essentially saying "We need bitcoin because we don't want to trust institutions like MtGox because they might fail" and you…

Yeah, its clearly not hypocrisy. OTOH, it should be also clear that there is a problem with the pro-bitcoin argument here, as bitcoin hasn't yet solved the need for instititutions like exchanges. Which shouldn't be surprising, as the thing that bitcoin directly decentralizes (transaction validation and currency issuance) aren't the functions that exchanges serve.

Well, yes and no.

Apart from allowing you to find someone to trade with, validating the actual trade/settling the trade is an important part of an exchange as well, and those at least in principle could be solved using bitcoin-based technology.

And also, bitcoin at least partially could "solve" the problem by just not requiring the use of an exchange anymore once it has sufficient adoption. After all, most people don't directly need an exchange in order to use their local currency either.

And finally, there are suggestions how an exchange could prove its BTC liquidity using the bitcoin system, which would also solve at least part of the abuse potential of a centralized institution.

But yeah, it's not fully solved (yet?) and I simplified things a bit, but I think nothing that has any impact on my argument.

Re: Mt. Gox Files for Bankruptcy Protection

#229

Post by rdmcfee »

rbobby wrote: post #198
TheCoelacanth wrote: post #167

Earlier quoted context omitted.

It seems highly unlikely that anyone will get all of their money back. They announced that they have debts of 6.5 billion yen and assets of only 3.84 billion yen. If they can liquidate 100% of their assets that's only enough to pay back 59% of their debts.

6.5b yen is only 63 million USD. The 850,000 BTC wasn't included as a debt (which is roughly 475 million USD).

I believe it was included as debt at the artificially low GOX price.

Re: Mt. Gox Files for Bankruptcy Protection

#230

Post by whyenot »

bodski wrote: post #12
ck2 wrote: post #9

It's easy to be angry at them and/or see how stupid they were about accounting, security, etc. But I guess on the other hand we do have to realize they are victims of massive theft, as far as we know this massive loss was not due to their own profiteering or internal theft, it was an organized outside force targeting them. It occurs to me it is like blaming someone for getting mugged, although they were stupid enough…

It seems it is too early to state with any certainty that MtGox are also a victim here. http://falkvinge.net/2014/02/28/the-gox-crater-crowd-detecti... http://letstalkbitcoin.com/the-ghost-in-the-machine-at-mtgox...

Another POV from Greg Maxwell (a Bitcoin core developer):

Claims that MTGox has a lot of coin so far look completely spurious to me.

https://www.reddit.com/r/Bitcoin/comments/1z3v4k/claims_that...

In Falkvinge's case, it may be wishful thinking. He has also posted that he had 160 BTC and 1500 euros on Mt.Gox

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