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Mt. Gox Files for Bankruptcy Protection

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Re: Mt. Gox Files for Bankruptcy Protection

#241

Post by theorique »

ericb wrote: post #227
theorique wrote: post #150

Earlier quoted context omitted.

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.

You have a good point. It definitely takes a lot of mental discipline to rebalance on a schedule with liquid paper wealth.

Re: Mt. Gox Files for Bankruptcy Protection

#242

Post by Spockulus_Rift »

Oculus wrote: post #48

To all the HN members who lost a lot of money in this closing, remember the community is here for you. Don't do anything too rash and if you need someone to talk to, myself and most other people would be happy to lend an ear.

http://www.youtube.com/watch?v=sh9wsrL43RY

Re: Mt. Gox Files for Bankruptcy Protection

#243

Post by snorkel »

dangrossman wrote: post #235
snorkel wrote: post #231

Earlier quoted context omitted.

What boggles the mind is Mt Gox started as a site for trading Magic The Gathering cards. I suppose in the code btc was just a special type MTG card? Incredible it got this far.

There was never a MTG trading card site on that domain. This is a myth you should stop spreading.

Well if that's so untrue then you should take your mythbusting campaign to the Mt Gox page on WikiPedia where it clearly states this was the original intent of their business. Mt Gox stands for "Magic The Gathering Online eXchange", does it not?

Re: Mt. Gox Files for Bankruptcy Protection

#244

Post by Crito »

dangrossman wrote: post #235
snorkel wrote: post #231

Earlier quoted context omitted.

What boggles the mind is Mt Gox started as a site for trading Magic The Gathering cards. I suppose in the code btc was just a special type MTG card? Incredible it got this far.

There was never a MTG trading card site on that domain. This is a myth you should stop spreading.

Indeed, it seems relatively apparent that the name was originally related to MTG, and the original person had plans to create a MTG website, but I have never seen any evidence to suggest that a MTG trading website was actually created, let alone then re-purposed to be a bitcoin exchange.

There are plenty of things to find stunning or hilarious about mtgox without making things up.

Re: Mt. Gox Files for Bankruptcy Protection

#245

Post by ericb »

theorique wrote: post #241
ericb wrote: post #227

Earlier quoted context omitted.

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.

You have a good point. It definitely takes a lot of mental discipline to rebalance on a schedule with liquid paper wealth.

And if we're being legal, a willingness to take it on the chin with short term capital gains rates on everything you rebalance.

Re: Mt. Gox Files for Bankruptcy Protection

#246

Post by stingraycharles »

ericb wrote: post #227
theorique wrote: post #150

Earlier quoted context omitted.

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.

I had not considered this, and you have a very good point. Most of those people had been getting used to the idea of being rich, that it will be very rough for them to adjust.

Besides, the way their money is lost made it so much worse. The global value of btc crashing would be one thing, corruption would be another, but this level of incompetence.. it's almost harder to digest since they most likely are not guilty of any crimes either, unless stupidity would be a crime.

Re: Mt. Gox Files for Bankruptcy Protection

#247

Post by welterde »

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…

> In the case of Mt. Gox, or any other Bitcoin exchange, that credit is secured by nothing and insured by noöne.

I believe that's not quite true. IIRC there is a european bitcoin exchange, where at least the euro balance is insured up to a certain sum[1].

[1] http://spectrum.ieee.org/tech-talk/telecom/internet/bitcoinc...

Re: Mt. Gox Files for Bankruptcy Protection

#248

Post by zAy0LfpBZLC8mAC »

wtvanhest wrote: post #232
zAy0LfpBZLC8mAC wrote: post #219

Earlier quoted context omitted.

Well, and how is "give us your money and you'll later get it back, just minus some fees" possibly an investment operation, be it fraudulent or not? I mean, where did MtGox ever suggest they would pay any returns, let alone where did they ever pay returns?

You bring up an interesting point. I reviewed a wiki list of Ponzi schemes and assuming that is an exhaustive list I have to agree with you that the generally accepted definition is that you must say you are doing something with the money to benefit the investors for it to be a 'Ponzi Scheme'. http://en.wikipedia.org/wiki/List_of_Ponzi_schemes The fact that it doesn't fit the wiki or generally accepted definition of…

Well, what pretty much rules out that MtGox will be considered a ponzi scheme is that if it were, "ponzi scheme" would essentially be a synonym for "fraud".

Suppose MtGox wasn't a bitcoin exchange, but rather sold cars, which had to be ordered and paid for in advance. Now, suppose further that the CEO "stole" cars from the company and then bought new ones using the money from new customers when he needed to deliver a car to one of the earlier customers. That's just plain old fraud, not a ponzi scheme, and it doesn't become a ponzi scheme just because it's money instead of cars - and in particular, you as an earlier customer certainly are not liable for the losses of later customers.

edit: I mean, MtGox under the assumption that the loss was not due to a technical problem, if it way due to a technical problem, it's obviously not a ponzi scheme anyway.

Re: Mt. Gox Files for Bankruptcy Protection

#249

Post by wpietri »

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…

I'm not saying that anybody who had money in Bitcoin is a hypocrite. But anybody who had money in MtGox, lost it, and now wants help getting it back is hypocritical if they were also singing the praises of Bitcoin in those ways. And that presuming that people with money in MtGox were Bitcoin proponents is not a giant stretch.

Re: Mt. Gox Files for Bankruptcy Protection

#250

Post by mtgoxwinner »

mtgoxloser wrote: post #97
steven2012 wrote: post #84

Earlier quoted context omitted.

I believe your understanding if the situation is flawed, if you are a US citizen. The $3000 per year applies to capital losses. You did not suffer a capital loss. You suffered a loss due to bank insolvency. If you realized your gains in 2013, you actually owe taxes on $500,000 for your 2013 taxes, which is roughly $250k. I believe your losses due to bank insolvency will apply to your income for 2014. But you may be o…

I am not clear with taxes, but I will go and consult with a CPA. Fortunately I did not keep everything in MtGox. If it turns out that I do owe $250k in taxes, I won't be in trouble. Thanks.

Please, tell us more about how wealthy you are.
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