Hilarious. Can't wait to hear from the choir of libertarian crypto-currency-zealots, who will sing the praises of the Ponzi scheme that is Bitcoin. On a serious note: who benefits?
"who benefits?" Follow the money... erm... crypto bits.. um.
Mt. Gox Files for Bankruptcy Protection
211–220 of 305 posts
Re: Mt. Gox Files for Bankruptcy Protection
#212Earlier quoted context omitted.
You are running an antique accessory business. You have a van to carry all the valuable stuff you borrow from people to sell in their name. Your van starts to leak oil. You figure out how to fix it yourself. Check engine light of the van is still blinking though, but you happened to put a post-it in your dashboard blocking it. By the way, you also never have it serviced. You keep driving for years while the situation…
Sounds like customers should have judged by themselves it wasnt a safe van to put your valuable antiques in.
In addition to this being the usual hindsight horseshit, it also displays startling ignorance of how markets work.
If every time I want to buy a pack of gum I have to investigate every entity in the production and distribution chain, then I will never buy gum because the transaction cost is well above the value.
This is why businesses, who have substantial lobbying power, are generally ok with government regulation and often impose substantial self-regulation.
For example, take food. Restaurants here in San Francisco are all obliged to display their latest health department score. Almost everybody loves the system. Consumers love it because it tells them how safe their food is. Well-run restaurants love it because they can prove that their place is well run. Badly-run restaurants probably hate it, but that's fine; they're not good marketplace participants in the first place.
So your notion that you should go and check the oil level on every vehicle that ever contains any of your stuff is ridiculous. It's a handy way for you to feel smug blaming people who are suffering, not a reasonable suggestion for marketplace design.
Re: Mt. Gox Files for Bankruptcy Protection
#213I 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…
FWIW, #3 is from the original owner who sold the site to Karpeles in 2011. Doesn't excuse #1, #2, and many other things, though.
> FWIW, #3 is from the original owner who sold the site to Karpeles in 2011.
Interestingly, the leaked business plan mentions McCaleb apparently still owns ~12% of Mtgox shares. Why? My theory is that it's related to the hack shortly after the sale: McCaleb had said on Bitcointalk that he no longer had an interest in Mtgox but was going to be paid royalties for a time. So perhaps after the hack, McCaleb, to avoid putting cash pressure on Karpeles's damaged Mtgox, agreed to turn the royalty debt into equity.
Re: Mt. Gox Files for Bankruptcy Protection
#214Earlier quoted context omitted.
I'm talking about a more sophisticated solution that addresses this- See https://github.com/olalonde/blind-solvency-proof
Disclaimer: I only skimmed this solution. However, it looks like you don't/can't address all of the counterpart's liabilities. So salaries, tax dues, rents, loans, and other obligations denominated in fiat currency don't appear in the calculations. But any of these can destroy a counterparty as surely as insufficient reserves. Crucially, depositors don't really care where the risk is, they care that there is some ext…
You are right, those other factors cannot be accounted for with this approach, it only proves that the business is not running with fractional reserves.
Re: Mt. Gox Files for Bankruptcy Protection
#215So much for cold storage
Re: Mt. Gox Files for Bankruptcy Protection
#216Earlier quoted context omitted.
Hello! fellow diæresis user:) The only problem with doing multiple transactions is the amount of time required to both withdraw and send. If I waited, the price could fall (or rise...) What's needed is a non-governmental/industry-driven method of showing solvency and competence. Blockchain-transfers and signed messages to show bitcoins solvency maybe? I'm not sure how to show solvency in a national currency. I'm also…
> The only problem with doing multiple transactions is the amount of time required to both withdraw and send. If I waited, the price could fall There are two risks: the risk of the (1) price moving against you (delta risk) and (2) exchange defaulting (CP risk). The longer your funds spend waiting to transact, the greater your delta risk. The longer your funds spend at the exchange, the higher your CP risk. Bitcoin is…
> The longer your funds spend at the exchange, the higher your CP risk.
But we're talking about doing 10-$10 transactions versus 1 $100 transaction. The difference in time that money is at risk for the exchange defaulting is negligible in this scenario.
> You should never have a significant fraction of your liquid net worth in any of these exchanges.
Agreed. The other side of that coin, I would say, is that a "significant fraction of your liquid net worth" shouldn't be used in a single transaction either.
> Do not react to long wait times by increasing your transaction size.
I agree, you shouldn't make a transaction larger than it should be or force a transaction to be sooner than you'd like because of the wait time, but specifically breaking up one transaction seems a bit much.
> Instead, aggressively seek out alternatives.
Agreed. I did a long time ago. Their invalid transactions should have been a huge red flag.
Re: Mt. Gox Files for Bankruptcy Protection
#217No one stole anything from them. Or at least not something remotely close to what is reported. How can 800k btc go missing?
Even people with few hundred btc split them between several different offline wallets. Can't be stolen. Their hot wallet being hacked is a total possibility, but it would contain no more than 5% of their coins. So, they just emptied the cold storage until it was completely empty?
No.
Something else is going on and we will all know soon enough. Don't let yourselves be manipulated like that.
Re: Mt. Gox Files for Bankruptcy Protection
#218Earlier quoted context omitted.
Noone was promising any returns, so how could this possibly be a ponzi scheme?
Must Ponzi schemes guarantee returns? Madoff, for example, pretended to be a normal financial trading operation, just one with unusually good returns.
Well, I guess I phrased it badly, but I didn't mean a guarantee of returns, but rather just anything even suggesting it being an investment - that is to say, suggesting that it might possibly produce returns.
Madoff did not say "give me your money and you'll later get back the exact same amount, just minus some fees", I suppose? But that's what MtGox did - there was just no investment aspect to it.
Re: Mt. Gox Files for Bankruptcy Protection
#219Earlier quoted context omitted.
Noone was promising any returns, so how could this possibly be a ponzi scheme?
A Ponzi Scheme is legally defined as a fraudulent investment operation that pays earlier investors returns out of the investments of subsequent investors. A promise of returns is not necessary.
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?
Re: Mt. Gox Files for Bankruptcy Protection
#220In this incident I lost a bit more than $500,000 USD that was in my MtGox account. I sold my Bitcoins a few months back, but the USD have been sitting in my account waiting to be withdrawn. This was a massive fuck up by MtGox, but I really do feel sorry for Mark Karpeles. He seemed really enthusiastic about Bitcoin. Right by MtGox's offices in Japan was a Bitcoin Cafe being built. You can [see here]( http://si.wsj.ne…
Did you try to get your money out of MtGox? A friend of mine has been trying to get his money (CAD) out of MtGox for 2 months. He received his money yesterday.
Why the hell are they still processing withdrawals and simultaneously filing for bankruptcy?