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MtGox.com is offline

mtgox.com

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Re: MtGox.com is offline

#161
post #40

Questions I have now: 1) How likely is a cascade of bank runs on other exchanges? 2) Do other exchanges have security issues or insolvency that make them particularly vulnerable? 3) Will one of the other cryptocurrencies wax as confidence in BTC wanes?

1) unlikely, since cascading bank runs are usually a result of fractional reserve banking. Depositors in a collapsed bank are unable to pay off loans in another bank, causing collateral damage to this other bank. 2) do other exchanges have security issues? Yes. Are they vulnerable? Only time will tell. I would take Mandelbrot's modeling of insurers (banks are "insurers" of sorts) in "the (Mis)behaviour of markets[0]"…

Bitcoin exchanges will have a run - they resemble fractional reserve banking, because all exchanges dont have enough USD (or other currency) to cover every bitcoin that people might want to trade thru the exchanges (that could be every single bitcoin in existence).

This obviously results in the crash of the exchange rates, and probably a reduction in the usage of the currency as well. Getting paid in something that has little use of it's own doesn't help you.

Now, on #3, you said "in a rational world"... But this isn't a rational world, so the rest of this sentence doesn't apply.

The reality is like loss of confidence is very powerful, and it could, as the document noted, destroy BTC for the near and possibly medium term.

Re: MtGox.com is offline

#162

Earlier quoted context omitted.

Yes, if I have any schadenfreude here it's not for him. It's for all of the people who smugly told us for years that Bitcoin is superior to our "legacy" fiat managed and regulated monetary system system in every way, and anyone who can't see that is an idiot.

Don't equate Bitcoin the protocol with dodgy websites. Unlike cash, radical transparency is entirely possible with Bitcoin. Bitcoin the protocol is as strong as ever, but customers of other sites should demand proof that their exchanges and online wallets actually control 100% of the BTC they claim to have in their custody.

Cash isn't really a reasonable analogy in this case, since it can't be transferred digitally and needs to remain in the custody of the owner. BTC held in exchanges is much more comparable to money in demand deposit or savings accounts.

Re: MtGox.com is offline

#163
post #68

It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, and that those things really do hurt. -- MtGox was (past tense is probably appropriate here, but for the sake of anybody who had coins there, I hope not) a startup that failed spectacularly , and publicly, and took a TON of peoples' money with it. The transacti…

You are ignoring the fact that he has been straight up lying the last few weeks, and in my opinion, he still is. He said that they were aware of the bug for quiet some time, and yet had enabled automatic re-issuing of failed withdrawals. Do you think that is what really happened? They just got an excuse to steal coins on a massive scale!

Re: MtGox.com is offline

#164
post #128
post #68

It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, and that those things really do hurt. -- MtGox was (past tense is probably appropriate here, but for the sake of anybody who had coins there, I hope not) a startup that failed spectacularly , and publicly, and took a TON of peoples' money with it. The transacti…

Today it's transaction malleability. Tomorrow it's something else. Bitcoin is an experiment. Those seeking to turn it into a ponzi scheme are pretending as if it's a reliable currency or investment. Their is no accountability in the Bitcoin ecosystem. If you transfer your coins anywhere you should consider them gone. The only "safe" coin is a cold storage coin. The second it goes hot it's at risk. The second you send…

Fiat currency can disappear as well. You can't get blood from a stone.

http://www.reuters.com/article/2014/02/11/us-mfglobal-corzin...

Re: MtGox.com is offline

#165

Earlier quoted context omitted.

There is no fucking way 700,000 BTC disappears with nobody noticing. This must have been building for a long time. Was there never any attempt to compare BTC in wallets to customer balances? Or did MtGox know about this problem, and hope to cover it up over time? Either case is at least gross negligence if not criminal fraud. Yes, we all fuck up at some point. But I don't pretend to be a surgeon and perforate a patie…

> There is no fucking way 700,000 BTC disappears with nobody noticing. The history of Barings Bank is interesting, primarily because the main trader Nick Leeson was in the position to mask hundreds of millions of pounds of losses. In that case, no one noticed the roughly $1.3B loss because he was in a position where the internal controls didn't apply

At Barings, Leeson was trading futures contracts and he was also responsible for accounting for his own positions. There was no segregation of duties, no mark-to-market.

At MtGox, it should be much simpler to (1) add up all customer balances, (2) add up all BTC in hot and cold wallets, and (3) compare those two numbers.

If the numbers differ by more than timing differences, shut it down, debug it, and prevent a small problem from becoming a big problem.

The Barings backstory is that the billion-dollar loss started with a 20k bad trade, Leeson tried to cover it up, and it snowballed.

It wouldn't be surprising to learn that MtGox followed a similar trajectory.

Re: MtGox.com is offline

#166
post #5

Hello, downsides of unregulated currency. Some of the rules are there for a reason.

This is the very reason why Bitcoin needs to policed from a decentralized standpoint. I don't know much about the logistics of crypto-currencies but from my understanding there are public/private keys involved.

It should be possible that one can blacklist their own bitcoin address by using the private key. This way at least crooks cannot make off or use the stolen coins. Do any more technical Bitcoin fanatics have any thoughts about this?

Re: MtGox.com is offline

#167

Earlier quoted context omitted.

Yes, if I have any schadenfreude here it's not for him. It's for all of the people who smugly told us for years that Bitcoin is superior to our "legacy" fiat managed and regulated monetary system system in every way, and anyone who can't see that is an idiot.

Don't equate Bitcoin the protocol with dodgy websites. Unlike cash, radical transparency is entirely possible with Bitcoin. Bitcoin the protocol is as strong as ever, but customers of other sites should demand proof that their exchanges and online wallets actually control 100% of the BTC they claim to have in their custody.

"Bitcoin cannot fail, it can only be failed."

Re: MtGox.com is offline

#168

So Mt. Gox has defrauded its users of half a BILLION dollars in value. And, they've put out enough misinformation that those users believe "it wuz a hax0r that did it". So no cops, no jail sentences. I believe this will go down in history as the largest fraud ever committed. If you've been following this closely and you aren't writing the book already, you're missing out.

You're forgetting the 3 trillion the US government stole from its citizens and gave to the banks.

Re: MtGox.com is offline

#169
post #68

It's really easy in all of this to pile a bunch of hatred on Mark Karpeles, but please, everybody remember that he is a human being, with real human emotions, and that those things really do hurt. -- MtGox was (past tense is probably appropriate here, but for the sake of anybody who had coins there, I hope not) a startup that failed spectacularly , and publicly, and took a TON of peoples' money with it. The transacti…

Yes, if I have any schadenfreude here it's not for him. It's for all of the people who smugly told us for years that Bitcoin is superior to our "legacy" fiat managed and regulated monetary system system in every way, and anyone who can't see that is an idiot.

Lots of people in the Bitcoin community have been saying for years to not touch MtGox with a ten foot pole.
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