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Mt. Gox Files for Bankruptcy Protection

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Re: Mt. Gox Files for Bankruptcy Protection

#281

Post by saalweachter »

wtvanhest wrote: post #161
ryanjshaw wrote: post #126

Earlier quoted context omitted.

It's a pity your post isn't at the top of the thread. It is sound advice. I find it fascinating that there are (apparently) people in this thread who lost $500k at MtGox and despite the loss would still have no problem paying $250k in taxes on it if they were required to do so. I would hope if you're making that kind of money you'd either have a sound sense of financial risk management, or the wisdom to hire somebody…

My comment below highlights the clawback risk for those that were successful at pulling money out. If this turns out to be a Ponzi scheme there is a real chance that people who profited and were able to get their USD out may actually be forced to forfeit all of their profits depending on the jurisdiction.

I'm not sure I've heard any claims that would point towards MtGox being a Ponzi scheme. It was a straight forward exchange, not an investment with returns of any sort, let alone those derived from later investors.

The allegations are generally much more straight forward, either some sort of incompetence in the form of transaction malleability, or some sort of malfeasance (pilfering the bank for operating costs, outright theft of the funds). Ponzi schemes these are not.

Re: Mt. Gox Files for Bankruptcy Protection

#282

Post by wpietri »

zAy0LfpBZLC8mAC wrote: post #218
wpietri wrote: post #209

Earlier quoted context omitted.

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.

Plenty of people were buying Bitcoins because they thought they would increase in value, which sounds like an investment to me.

Re: Mt. Gox Files for Bankruptcy Protection

#283

Post by gargarplex »

xenophanes wrote: post #272
enscr wrote: 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…

Fuck you. When you're REALLY upset (hint: I am, and I have thought of suicide) a suicide hotline isn't necessarily the first thing on your mind.

Re: Mt. Gox Files for Bankruptcy Protection

#284

Post by nlp »

contingencies wrote: post #266
res0nat0r wrote: post #260

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…

Just to add to some of the other great responses here:

The British empire was built on the back of the Pound -- the first truly international, modern fiat currency. It reigned until it was muscled out by the fiat Dollar.

An immense amount of wealth has been generated for humankind on the backs of fiat currency.

And one more thing...

Bitcoin is also a fiat currency in the sense that it does not contain intrinsic value. It is only as valuable as its network effect. If the network falls in love with a different coin, bitcoin dies.

Re: Mt. Gox Files for Bankruptcy Protection

#285

Post by goldenkey »

gargarplex wrote: post #283
xenophanes wrote: post #272

Earlier quoted context omitted.

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…

Fuck you. When you're REALLY upset (hint: I am, and I have thought of suicide) a suicide hotline isn't necessarily the first thing on your mind.

http://www.suicidepreventionlifeline.org/

Re: Mt. Gox Files for Bankruptcy Protection

#286

Post by zAy0LfpBZLC8mAC »

wpietri wrote: post #282
zAy0LfpBZLC8mAC wrote: post #218

Earlier quoted context omitted.

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.

Plenty of people were buying Bitcoins because they thought they would increase in value, which sounds like an investment to me.

You are confusing the thing sold through MtGox with the thing sold by MtGox. MtGox sold the service of storing your money and of connecting you to trading partners and settling trades with those trading partners, that is what exchanges do - they didn't sell bitcoins.

It's like confusing eBay and paypal with some eBay seller: eBay and paypal don't sell clothes, say, they only help you find someone selling clothes and then (optionally) help with the settlement, the payment in particular.

And that's not just a formal distinction: On an exchange (like MtGox or any foreign currency exchange or stock exchange ...), the price for the traded commodity is not set by the exchange, but by the traders using the exchange. The exchange only sets the price for its service of connecting you with a counterparty, but the price for the stocks or bitcoins or whatever sold through the exchange is set by the trading partners, and the exchange also never takes on any of the investment risk, when you sell stocks, the counterparty gets the stocks, you get the money they paid, the exchange only does the bookkeeping.

Re: Mt. Gox Files for Bankruptcy Protection

#287

Post by ivanca »

Alterlife wrote: post #68
ivanca wrote: post #34

Earlier quoted context omitted.

You think gold being stolen reduces its value? If not, why do you think it would happen here?

Gold is a physical asset. People understand physical security. Gold can't be lost due to a hard drive crash, and it cannot be stolen over a network. More importantly, I believe a majority of people (myself among the number) do not understand bitcoins were stolen from mtgox.

Dollars (and Euros) stopped being a gold-based currency a long time ago: http://en.wikipedia.org/wiki/Fiat_money

Besides, "understanding" is very slippery verb in this context, what do you understand about gold? You know where it all is? You know who is in charge of protecting it and who is the owner? You know its location? You know who is digging for it? You know where are they digging? I don't clearly see what "understanding" you have about it.

Re: Mt. Gox Files for Bankruptcy Protection

#288

Post by aragot »

wpietri wrote: post #212
aragot wrote: post #112

Earlier quoted context omitted.

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 a…

I'm not talking about checking every screw of the truck. I'm saying that an unmaintained truck with lots of valuables in it is suspicious, and you should tust it for what it is.

I'll get negative poins again just because people don't like to be told what they should have known:

Bitcoins smell like a Ponzi scheme and, until they have proven themselves opposite, you should remain very wary of the money you put in. Do you invest in penny stocks? Nope. Why? Because they smell bad, even if their promoters make it look like they've quadrupled their value in just 4 months!

An online safe with millions of valuables? Shouldn't you wait for the proof it's good? Or do you assume it's a good safe as is? Is it really wise to assume something is safe? Oh I see negative HN points will rain on me. Not wise from me to put people in front of their responsibilities.

I'm sorry for people who lost money. Some of them will have a hard life. Losing money is never a good experience, I myself lost a quarter of my savings when the Australian dollar dropped. But do I blame the Australian gov? The EU gov? The regulators? Nope. It's my job to know when the AUD drops. Even if i can't inspect all parts of the economy. As a revenge, give me negative points.

Re: Mt. Gox Files for Bankruptcy Protection

#289

Post by nkrba »

akerl_ wrote: post #72

If only Bitcoin exchanges had some degree of regulation to ensure they were properly securing their users' funds, or perhaps some level of insurance to prevent their users from suffering financial losses due to the exchange's misfortune.

Elliptic Vault[1] is an example of a startup attempting to solve this.

https://www.elliptic.co/vault

Re: Mt. Gox Files for Bankruptcy Protection

#290

Post by [deleted] »

ivanca wrote: post #287
Alterlife wrote: post #68

Earlier quoted context omitted.

Gold is a physical asset. People understand physical security. Gold can't be lost due to a hard drive crash, and it cannot be stolen over a network. More importantly, I believe a majority of people (myself among the number) do not understand bitcoins were stolen from mtgox.

Dollars (and Euros) stopped being a gold-based currency a long time ago: http://en.wikipedia.org/wiki/Fiat_money Besides, "understanding" is very slippery verb in this context, what do you understand about gold? You know where it all is? You know who is in charge of protecting it and who is the owner? You know its location? You know who is digging for it? You know where are they digging? I don't clearly see what "und…

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