21–30 of 125 posts
http://en.wikipedia.org/wiki/Nick_Leeson
Poor internal controls, greed, arrogance, and snowballing losses that lead to greater and greater risks. And then disaster, at least in the cases we hear about.
What is "GoxBTC" vs "Real BTC" ?
RealBTC is what you got when you finally got it out of them, to spend elsewhere.
What is "GoxBTC" vs "Real BTC" ?
Well, Regardless of how exactly it happened, I think the big thing is that anything that operates as "just an exchange" has the potential to operate as a fractional reserve bank instead (IE, just operate with enough money to cover day-to-day transactions and not-have/use-for-something the remaining funds people think you have in your vault). So basically, trusting any unregulated entity that claims to have stuff in i…
It also shows what happens in an environment without insurance. If Mt.Gox was insured, this catastrophe would have been avoided for the customer by either the insurance company paying out or by Mt.Gox never getting hacked due to the security controls that the insurance company would have demanded. This, of course, raises the questions of "who insures the Bitcoin insurance company" and "how do the insurance companies…
I did notice that the owner of a large mining pool was receiving error notifications from Mt. Gox. This mining pool has tampered with mined blocks to include religious messages, so they'd definitely be in a position to do transaction malleability attacks to provide Gox with plausible deniability. /r/bitcoin thread with sources: http://www.reddit.com/r/Bitcoin/comments/1zifxf/why_is_the_a...
The religious messages thing is a strawman. Miners are allowed to include whatever they want in the coinbase. It's common among pools, and hardly considered "tampering". https://bitcointalk.org/index.php?topic=38007.0
Edit: more info: http://www.reddit.com/r/Bitcoin/comments/1zifxf/why_is_the_a...
Well, Regardless of how exactly it happened, I think the big thing is that anything that operates as "just an exchange" has the potential to operate as a fractional reserve bank instead (IE, just operate with enough money to cover day-to-day transactions and not-have/use-for-something the remaining funds people think you have in your vault). So basically, trusting any unregulated entity that claims to have stuff in i…
I mean, we might not see exactly the number of things we expect, but if it's holding over 95% of the value expected (through those mechanisms), and shows a successful trend of having increases when it claims and decreases when it claims, then it seems relatively trustworthy.
all stories aside i believe that bitcoin is unsafe - and that this has been /blatantly/ obvious since i first encountered it as a suggested method to launder money and fund criminal activity.
don't buy unregulated 'currencies' with a strong history and incentive for money laundering and facilitating the black market. its violates the spirit of the law of pretty much every nation on earth.
whilst i genuinely believe that cryptocurrency is possibly the way forward - certainly a global currency which is independent of such whimsical things as nation states, politics and commodoties - i also think that it took a spectacular lack of common sense or 'street smarts' to actually spend money on bitcoins.
nice story... but i am indifferent to its truth - it doesn't negate the obvious risk of investing in bitcoin. but then many will say 'the greater the risk the greater the reward' and they are precisely correct.
NB: i barely trust the bank - i have a bank account 'under duress' as most of you probably have - that i would like to see my earnings from employment. how did that happen? why should banks have any involvement in my remuneration for work. /i would very much rather cash in hand that you can't fuck up for me because you are gambling it on the stock market under the pretense of running a business/. its not like we have self inflicted financial crises as a result or anything at all... :/
Well, Regardless of how exactly it happened, I think the big thing is that anything that operates as "just an exchange" has the potential to operate as a fractional reserve bank instead (IE, just operate with enough money to cover day-to-day transactions and not-have/use-for-something the remaining funds people think you have in your vault). So basically, trusting any unregulated entity that claims to have stuff in i…
It also shows what happens in an environment without insurance. If Mt.Gox was insured, this catastrophe would have been avoided for the customer by either the insurance company paying out or by Mt.Gox never getting hacked due to the security controls that the insurance company would have demanded. This, of course, raises the questions of "who insures the Bitcoin insurance company" and "how do the insurance companies…
E&O insurance is surprisingly simple to understand. You fill out a 5ish page application, which asks you about the character of your business, your tech infrastructure, and your procedures/policies/etc regarding particular risks. The underwriter reads your application then asks some drilldown questions. The two I got were "Confirm Mr. McKenzie has 5+ years of professional experience in system administration" and "Confirm that the use of Appointment Reminder in a hospital is for the hospital's business administration or the convenience of patients, rather than for treatment/diagnosis/etc of a medical condition." (Translation: If it breaks, does anyone die? If so, we will probably not write this policy.)
Earlier quoted context omitted.
It also shows what happens in an environment without insurance. If Mt.Gox was insured, this catastrophe would have been avoided for the customer by either the insurance company paying out or by Mt.Gox never getting hacked due to the security controls that the insurance company would have demanded. This, of course, raises the questions of "who insures the Bitcoin insurance company" and "how do the insurance companies…
Which is why government insuring bank deposits isn't such a crazy idea. If the government collapses and can't stand behind the policies, then you have some really big problems on your hands and it is likely that private insurers wouldn't have fared much better. If the government doesn't collapse, everyone gets made (more or less) whole again. Basically, when the government is your insurer, there is no "Who insures th…
i'm just (still) glad i didn't buy into the latest fad because of common sense. all stories aside i believe that bitcoin is unsafe - and that this has been /blatantly/ obvious since i first encountered it as a suggested method to launder money and fund criminal activity. don't buy unregulated 'currencies' with a strong history and incentive for money laundering and facilitating the black market. its violates the spir…