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Mt. Gox Files for Bankruptcy Protection

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Re: Mt. Gox Files for Bankruptcy Protection

#271

Earlier quoted context omitted.

At least if your money is held in an FDIC insured bank and the bank goes under, you can rely on the government to insure your investment. With bitcoin you have no such thing.

That sounds very smart, however if your money is held in an FDIC insured bank, then it's likely to be in a national currency that is systematically devalued by the issuing institution through progressive year-on-year inflation. (Note that I use the term institution instead of government as two major issuers, the Federal Reserve and the Bank of England, are private organizations). PS. I'm not characterizing inflation…

> That sounds very smart, however if your money is held in an FDIC insured bank, then it's likely to be in a national currency that is systematically devalued by the issuing institution through progressive year-on-year inflation.

Which may be a good reason to limit currency holdings to what you need to use as currency (that is, short-term medium of exchange for things of value), and invest the rest in productive assets, whether those are stocks, bonds, real estate, or digital collectibles like internet funbucks. But if you aren't directly holding those productive assets yourself but are trusting them to account held by someone else who promises to transfer them to you on demand or dispose of them at your direction, you probably want to do some consideration of their ability to keep them securely and execute the trust you are placing in them.

Re: Mt. Gox Files for Bankruptcy Protection

#272
post #110

Earlier quoted context omitted.

http://www.suicidepreventionlifeline.org/

This should be at the top

Something bad happened. Some people are sad. Let's bring up the topic of suicide and make sure they are all aware of it!!!!!!!!!!!!!!!!!111111111111 And then feel good about how kind and helpful we are.

People already know suicide hotlines exist. If they want one they can google it or siri it or whatever. You aren't giving them new information, just telling them, basically, that you wouldn't find it surprising if they killed themselves over this.

Re: Mt. Gox Files for Bankruptcy Protection

#273

Earlier quoted context omitted.

Where is there hypocrisy in that? I just can't see any.

The kind I'm seeing is celebrating uncontrollability and then suddenly wanting the benefits of control.

I think you completely don't understand their position. Noone is "celebrating uncontrollability" (well, someone probably is, but it's certainly not a majority). If anything, proponents of bitcoin celebrate independence - which you might frame es trading controllability by institutions for controllability by individuals.

Their argument is that the decentralized nature of bitcoin allows an individual to secure their bitcoin balance without having to rely on any particular institution, which means one can avoid the risks associated with corrupt or otherwise potentially not trustworthy institutions.

Now, this argument obviously does not apply to MtGox - MtGox obviously was/is a centralized company that also obviously has all the risks associated with such a centralized company, and also all the institutional controllability of a centralized company, it's registered in Tokyo, it falls under Japanese jurisdiction, the state could easily have frozen balances people held with them, be it in bitcoin or in USD or EUR or JPY or whatever, ... in short: It is pretty much a Japanese bank, which incidentally allowed trading and storing bitcoin with them. As such, why is it hypocrisy to expect it to be treated like a bank? You have all the risks of using a bank, why not the advantages of using a bank?

But also: Well, even if this was about some stealing someone else's bitcoins (well, it kindof is, as far as MtGox itself is concerned, at least if they are to be believed): Why would it be hypocritical to ask for help from others just because you tried to minimize the need for such help and this also caused the help that you need in the end to be a bit harder to provide? It might even still be an overall benefit to society.

I guess that you might disagree with some of the supposed benefits that proponents of bitcoin claim - but that does not make them hypocritical, just possibly wrong, and it would probably be more constructive to point out where you think their idea will fail in reality or where you disagree with their goals than to accuse them of being hypocritical.

Re: Mt. Gox Files for Bankruptcy Protection

#274
post #110

Earlier quoted context omitted.

This should be at the top

Something bad happened. Some people are sad. Let's bring up the topic of suicide and make sure they are all aware of it!!!!!!!!!!!!!!!!!111111111111 And then feel good about how kind and helpful we are. People already know suicide hotlines exist. If they want one they can google it or siri it or whatever. You aren't giving them new information, just telling them, basically, that you wouldn't find it surprising if the…

Emotions run high when something of this magnitude happens. Judgement gets clouded. A reminder is very important as a way to intercept those without a clear head before they do something rash.

Re: Mt. Gox Files for Bankruptcy Protection

#275
post #258

Earlier quoted context omitted.

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…

Too true. It is interesting that rationally speaking, considering windfalls or lottery winnings "house money" is incorrect--money is money. This attitude can lead you to cognitive errors that cost you more money in the long run. On the other hand, if we think about the coping strategy for people who've been Goxed, I can see where if you can disregard the winnings as "paper gains" it is much easier to get on with life…

This thread is awesome. Goxed is now my new favorite word (sorry for the more initiated if I'm already late to the party). It's just like being doxed - you exposed yourself in some way, and some clever bastard got the better of you for it.

Re: Mt. Gox Files for Bankruptcy Protection

#276

Earlier quoted context omitted.

The kind I'm seeing is celebrating uncontrollability and then suddenly wanting the benefits of control.

I think you completely don't understand their position. Noone is "celebrating uncontrollability" (well, someone probably is, but it's certainly not a majority). If anything, proponents of bitcoin celebrate independence - which you might frame es trading controllability by institutions for controllability by individuals. Their argument is that the decentralized nature of bitcoin allows an individual to secure their bi…

The reason I still find it hypocritical in this case is that Bitcoin is currently approximately useless. People were using MtGox to essentially place bets on the future of Bitcoin. Some people surely didn't get as far as hypocrisy; having no clearly formed views on the purpose and future of financial infrastructure, they were just chasing tulip bulbs. But I think betting on a technology whose major feature is independence from traditional regulation and then expecting traditional regulators to bail you out when it's not all wine and roses is essentially hypocritical.

Re: Mt. Gox Files for Bankruptcy Protection

#277
post #236

Earlier quoted context omitted.

This isn't realistic for an exchange. They have an enormous transaction volume, which is represented as internal/off-chain transaction in an internal accounting system. Using multi-signature transactions requires every fund transfer to be represented as a Bitcoin transaction, which the Bitcoin neAtwork simply can't handle.

Since we are a P2P exchange, we don't foresee to have more than few dozens transactions per minute when we grow big. I'm sure the Bitcoin network can handle such volume.

The protocol can only handle 7 transactions per second.

Re: Mt. Gox Files for Bankruptcy Protection

#278

Earlier quoted context omitted.

I think you completely don't understand their position. Noone is "celebrating uncontrollability" (well, someone probably is, but it's certainly not a majority). If anything, proponents of bitcoin celebrate independence - which you might frame es trading controllability by institutions for controllability by individuals. Their argument is that the decentralized nature of bitcoin allows an individual to secure their bi…

The reason I still find it hypocritical in this case is that Bitcoin is currently approximately useless. People were using MtGox to essentially place bets on the future of Bitcoin. Some people surely didn't get as far as hypocrisy; having no clearly formed views on the purpose and future of financial infrastructure, they were just chasing tulip bulbs. But I think betting on a technology whose major feature is indepen…

Oh gee, that's really a lot of fallacies.

Yes, people used the bank called MtGox in order to bet on the future of bitcoin, just as they use other banks in order to buy stocks of companies in order to bet on their future, often without having a clearly formed view on what the company will be doing in the future, and more often than not with the hope that some particular company will disrupt how a certain business is being done, sometimes even some financial business. That's what we generally call financial capitalism. Just because you are betting on some not fully determined future does not make it a tulip bulb bubble.

Also, "independence from regulation" is not about "not paying taxes" or "not helping other people" or whatever your preconceptions might be, it is about achieving the same things that regulation is supposed to achieve, just without regulation. One major purpose of regulation is to make sure that a bank that you put your money in does not do overly risky things with your money so that you can be sure your money is still there when you need it. The value proposition of bitcoin is that the nature of the technology prevents the abuses in the first place, so there is no bank that could possibly do risky things with your money, so there is no need for regulation in order to keep it safe. Bitcoin proponents are not necessarily "against regulation", but rather "for a better alternative to regulation where there is one". Hence, it's not inconsistent at all, let alone hypocritical, that they expect to make use of the advantages of regulation where it is needed - such as the MtGox bank, which is not bitcoin, and thus does not provide the technical protection promoted by bitcoin proponents, and has to rely on regulation instead.

By the way, are you possibly confusing regulatory protection from bank failure with some kind of protection against a failed investment? If at all, this is about recovering the balances people held with the MtGox bank, not about reimbursing them for money they lost because they invested in bitcoin - it's just like when any other bank fails, really: If you buy IBM shares through your bank, you might expect that the financial industry as a whole would make sure that those shares really are there and you can transfer your shares to a different bank when your bank fails, even if those happen to be shares of a competing bank - but if IBM went bust, you obviously would not expect to be able to recover the money you paid for the shares from anyone, that's your investment risk.

And no, just because you promote some way of doing something does not make it hypocritical when you don't actually do it. Just look up the definition, it just isn't. Hypocrisy is when you claim to be doing something which you actually are not. Plus, there isn't even any inconsistency - when you bet on a technology that would make regulation unnecessary in the future, why should that mean that you should not make use of regulation where it actually is necessary?

Re: Mt. Gox Files for Bankruptcy Protection

#279
post #277
post #236

Earlier quoted context omitted.

Since we are a P2P exchange, we don't foresee to have more than few dozens transactions per minute when we grow big. I'm sure the Bitcoin network can handle such volume.

The protocol can only handle 7 transactions per second.

The system is currently configured with a limit of 7 TPS. But the limit can be lifted, according to https://en.bitcoin.it/wiki/Scalability

Re: Mt. Gox Files for Bankruptcy Protection

#280
post #115

I feel bad for Mark Karpeles but the way MtGox communicated & lied to its users makes me sad. It's those nameless individuals who believed in him, whose trust was betrayed - those are the ones that deserve the affection of the community. I've been following the news and I think MtGox was handling so much money that they should have focused on better security practices and audits. Few examples of their lackadaisical a…

"There was some weakness in the system, and the bitcoins have disappeared." They've "disappeared". Curious choice of words. Karpeles didn't say they were stolen, or misplaced, or destroyed. And he didn't say when the mysterious disappearing act occurred. The most likely explanation is that Gox's crappy system lost the private keys to cold storage long ago, and they've been running fractional reserve since then, hopin…

Another hypothesis is that the US gov't might be in control of the bitcoins having connected them to SilkRoad or teh terror-izm and have Kerpeles under gag order preventing him from revealing this.
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