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Mt. Gox demise as told by a Bitcoin insider

bloomberg.com

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Re: Mt. Gox demise as told by a Bitcoin insider

#41

Post by kmeisthax »

wmf wrote: post #27
chaostheory wrote: post #8

Since we're on the subject, how do people think the Tether situation will play out?

Some agency orders a freeze on Tether which triggers a panic of USDT -> BTC -> USD trades, creating a situation where 1 BTC = ~200K USDT and 1 BTC = ~20K USD. I don't expect this to happen in 2021.

That's already happened, and has been continuously occurring since 2017 when Wells Fargo shut down their links to the traditional banking system. Tether continues to trade at the peg because people believe it to be pegged.

The only way the Tether peg could possibly be realistic is if massive amounts of institutional investors were engaging in really unusual settlement procedures to buy into Tether. I've heard stories about Tether having it's investors operate accounts on it's behalf or something, which sounds incredibly farfetched compared to the more likely idea that they're just not bothering maintaining anything close to a reasonable reserve requirement for their peg. After all, nobody can really pull money out of Tether.

Re: Mt. Gox demise as told by a Bitcoin insider

#43

Post by nyolfen »

cecida wrote: post #6

The problem with trying to suggest that Bitcoin is a fundamentally flawed idea is that you will be down voted to oblivion. As a computer science concept it's rather mundane. We know what merkle trees are. It's an extremely wasteful form of computing. Mining is an exercise in wastefulness. Proof-of-work is one of the worst concepts I've ever seen. Ah, Tether.

> As a computer science concept it's rather mundane. We know what merkle trees are.

a practical, robust solution to a long-standing computer science problem (byzantine generals) that directly results in an entire new branch of computer science and economic sector is hardly mundane. bitcoin solves previously intractable trustless coordination problems. we are only at the early stages of discovering what it makes possible; you are the newspaper editor laughing at the web in 1996.

Re: Mt. Gox demise as told by a Bitcoin insider

#44

Post by sumedh »

trixie_ wrote: post #34
matkoniecz wrote: post #26

Earlier quoted context omitted.

> beats other stores of value in almost every metric. Which metrics you selected so crypto beats following in "almost every metric"? - real estate - gold - $ in cash - $ in a bank account - stocks

Metrics as in how easy is it to store and send, how resistant is it to inflation and manipulation. - Land - Can't send it. - Gold - Physical so more difficult to store, secure, send, and verify. - Cash - Easy to manipulate by the government. How many trillions printed for coronavirus? I wouldn't hold too much of it. - Stocks - Cant send it. More shares can be created by the board of directors. Crypto is made to do on…

> Crypto is made to do one thing - store value, and do it well.

Does it really do it well when your "investment" can fluctuate between $5000 to $40K?

Re: Mt. Gox demise as told by a Bitcoin insider

#45

Post by pmorici »

wmf wrote: post #22
otoburb wrote: post #14

Earlier quoted context omitted.

Coinbase didn't need Mt. Gox to become what they are today. I'm not sure this line of reasoning holds much water. Perhaps if we were to follow Vessennes' absurd chain of reasoning to its logical conclusion, CoinLab itself should be countersued by Mt. Gox creditors for failing to become as successful as Coinbase given their head start in the US.

I think Coinbase is successful because it's the "default" exchange for noobs in the US. Mt. Gox was the default exchange until it failed and if it had never failed (which is a longshot assumption, granted) then it would probably still be the default, largest, and most valuable US exchange today. (Of course, non-US exchanges like BitMEX are far larger because they offer more "exciting" products.) CoinLab itself should…

Coinbase is successful because it was the fist exchange that did things by the book and has a well deserved reputation for competence and law abiding conduct.

Re: Mt. Gox demise as told by a Bitcoin insider

#46

Post by tomc1985 »

trixie_ wrote: post #36
woodruffw wrote: post #28

Earlier quoted context omitted.

> Crypto has value simply because it is better at storing value than the mediums that came before it. Is this a serious claim? The last one and a half months have seen extraordinary speculation in cryptocurrency markets, even by the standards of cryptocurrencies. Lots of wealth is being produced ; relatively little is being stored.

It's in the news everyday. Huge investment firms diversifying into crypto. So yes, value is being stored. The market cap of cypto has been rising exponentially - exactly because it is a good store of value. Which means easy to store, and highly resistant to manipulation and inflation.

> Which means easy to store

Sure, if you want to trust an exchange. But try setting up and running Bitcoin Armory and see how 'easy' that is

> exactly because it is a good store of value

I wouldn't consider highly volatile currencies a "good store of value".

> and highly resistant to manipulation and inflation.

Far from it. An exchange goes tits-up and BTC plummets, and then everyone else follows. It's super susceptible to coordinated pump and dump schemes. Holding any crypto can get you red-flagged by the IRS, and if you don't admit to it most legit exchanges will rat you out. (Better for non-Americans, I guess...)

One of my favorite things to do every now and then is pull up CMC and see just how many coins' performance is a fraction of BTC's. Its funny because at BTC's most volatile times nearly the entire chart is red or green.

Re: Mt. Gox demise as told by a Bitcoin insider

#47

Post by koolba »

MagicalTux wrote: post #35

Being directly involved in this I'm not going to comment as of the veracity of the article myself, but rather point to a response of when this was posted on twitter (look at the extra responses for some fact checking): https://twitter.com/wizsecurity/status/1355973512012292096

The default twitter algo selection of comments is random gibberish. Anything more specific to point to?

Re: Mt. Gox demise as told by a Bitcoin insider

#48

Post by elif »

TylerE wrote: post #15
staplers wrote: post #11

It's always amazed me how anti-crypto and behind the times (about bitcoin) this forum has been. Remember your imagination for the possibilities of the early web and computers.

Bitcoin as had the better part of decade and it's still practically useless in the real world.

Something that can continue to gain value for 10 years has no practical use?

Someone had better remove the vast majority of the world GDP which is in financial markets.

Re: Mt. Gox demise as told by a Bitcoin insider

#49

Post by modeless »

MagicalTux wrote: post #35

Being directly involved in this I'm not going to comment as of the veracity of the article myself, but rather point to a response of when this was posted on twitter (look at the extra responses for some fact checking): https://twitter.com/wizsecurity/status/1355973512012292096

For those who don't know, MagicalTux is Mark Karpeles, owner and CEO of Mt Gox. Assuming this is his real account.

And for what it's worth, I agree that this is a bad article based on what I know about the situation. Bloomberg reporting in general is questionable these days if you ask me. I don't trust them since the false Supermicro hack story (never retracted BTW) and I've seen several other bad stories from them since then.

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