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Bitcoin Japan The Almighty Buck

Bitcoin Plunges After Mt. Gox Exchange Halts Trades 249

Posted by timothy
from the well-at-least-dark-grey-friday dept.
krakman writes with this excerpt from Bloomberg News: "Bitcoin plunged more than 8 percent [Friday] after a Tokyo-based exchange halted withdrawals of the digital currency, citing technical malfunction. Mt. Gox, claimed in a blog post it needed to 'temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes.' It promised an 'update' — not a reopening — on Monday, Feb. 10, Japan time. This is day after Russia's Prosecutor General concluded Bitcoin and other digital currencies are illegal under current law."
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Bitcoin Plunges After Mt. Gox Exchange Halts Trades

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  • Yet trading goes on (Score:4, Informative)

    by mc6809e (214243) on Saturday February 08, 2014 @02:40AM (#46193513)
    • What's interesting is that it hasn't totally tanked after a country like Russia declares it illegal, is happened with China.

      Of course in Russia everything is illegal so maybe it's not that big a deal.

      • by sFurbo (1361249)
        The declaration from China came in the middle of a bubble. In my analysis (yay, random internet guy analysis), it seems as if that drop was not because of any direct impact of the declaration, but simply came because enough people knew it was in a bubble and was simply waiting to sell as soon the bubble seemed to burst. The declaration acted as a signal for the end of the bubble.

        Oh, and it seems to keep dropping [bitcoincharts.com].
        • The declaration from China came in the middle of a bubble. In my analysis (yay, random internet guy analysis), it seems as if that drop was not because of any direct impact of the declaration, but simply came because enough people knew it was in a bubble and was simply waiting to sell as soon the bubble seemed to burst. The declaration acted as a signal for the end of the bubble.

          Oh, and it seems to keep dropping [bitcoincharts.com].

          Seems to be flattening out now that Mt Gox is allowing withdrawals again. I think it'll come back up now - until the next bad news story, just like any other currency :-)

          I'm not sure how one can evaluate whether the bitcoin value is in a bubble or not as there is no way to evaluate how much it should be worth other than current demand, which will fluctuate based on whatever news is happening at the moment rather than on any intrinsic value or economic indicators which might be used to valuate real property

  • by Neo-Rio-101 (700494) on Saturday February 08, 2014 @03:02AM (#46193593)

    Rule 1 of currency trading: Economic news is bull. It's either used to mislead a trader before they pull the trigger on a trade, or it's a pathetic excuse they give you after they've yanked your money.
    "'temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes" sounds like the latter kind of BS.

    Yeah sorry traders, we just had a technical hiccup.... SLURP! YOU LOST YOUR MONEY THANKS FOR PLAYING

    Three fat red bars on the chart going down, followed by a doji that's just waiting there for people to jump on board. Looks like market manipulation... look for the reversal set up.

    • by bkmoore (1910118)

      Rule 1 of currency trading: Economic news is bull. It's either used to mislead a trader before they pull the trigger on a trade, or it's a pathetic excuse they give you after they've yanked your money....

      Markets are anonymous and deal with money or things denominated in money. How could there not be fraud?

    • by mikael (484) on Saturday February 08, 2014 @06:56AM (#46194411)

      I believe it is called a "stress test", one of the techniques that banks use to test the resilience of a trading system and how much liquidity it has. If they suddenly shutdown the exchange of currency, the punters are forced to make trades using other resources. How much of that other currency is used gives an idea of how is available. The Russians and EU did the same by restricting physical money currency transfers. The EU figured out there was black market the size of the GDP of the entire region.

    • by Tynin (634655)
      This problem has been in the making for months. The reason the price was always ~$150 more than any other exchange was because you couldn't get money out of MtGox, and if you could, it would take a very long time if it ever got processed. There are many theories why this happened, several suggested that whatever bank they were using in Japan was setting some daily limits on how much money they could move. So in turn, in order to get unhitched from MtGox holding your money, you could opt to buy BTC from the
      • by medv4380 (1604309)

        I personally use localbitcoins, because there is no fee's to sell, and you can get people to walk into a branch of your bank and deposit money directly to you and not have to worry about bank wire fee's in order to move your USDs out of an exchange.

        That's a very good way to get your account closed by your bank. Might take awhile to trip the bots to flag your account, but they will find it, and if you're lucky they'll give you a week to find a new bank.

        • by Tynin (634655)
          Care to explain why there is anything wrong with someone walking into my bank and depositing money to me?
          • by Dr. Evil (3501)

            It's how my tenants pay rent in Canada.

            To let them do it, I had to have a note on my account and they have to show their ID when they make the deposit. The bank wouldn't permit it any other way.

            I would have thought the bank would have been happy to have random strangers deposting money into accounts, but no. Not in Canada.

            • by tibman (623933)

              It's pretty normal in the US. I can deposit money to a friend's account. They don't even want to see my ID.

          • by medv4380 (1604309)
            Frequent cash deposits in small bill denominations will trigger a money laundering audit and drug dealing investigation. All banks have a standard policy of terminating an account spotted by the system regardless of weather or not an investigation turns anything up. Most of the details are kept very vague to prevent people from kiting the system however you can read up at fincen.gov [fincen.gov]

            unusual mixed deposits of money orders, third party checks, payroll checks, etc., into a business account;

            Yea that might seem like they only look at business accounts, but bots residential looks for anything that isn't a regular pa

  • by dbIII (701233) on Saturday February 08, 2014 @03:42AM (#46193727)
    This scheme relies on calculations that now require expensive hardware and the relative rate of return is diminishing. Without a move to distributed malware where someone else pays those costs I do not see how this scheme can persist for much longer.
    • by Luckyo (1726890)

      Actually, this scheme relies on reliable ability to trade virtual money for hard currency. This makes exchanges the natural single point of failure.

      It's yet another variation of the old xkcd joke: https://xkcd.com/538/ [xkcd.com]

      Every time Mt.Gox, by far the most popular and basically main exchange went down, bitcoin's trade value against hard currency went down hard. The rest of the factors are mostly irrelevant because their importance compared to relative value of easy, functional and legal way to exchange bitcoin

    • by zieroh (307208)

      You're not the first person to make this observation, and you won't be the last. However, you are nonetheless mistaken. In your rush to pass judgement, you've missed some fundamental aspects of Bitcoin.

      Either mining remains profitable, or miners will stop mining.* At the point where they stop mining, the difficulty goes down until mining becomes worthwhile again. The system was meant to balance itself in exactly this way, and it works very, very well. Yes, mining is an expensive proposition with a large ini

      • Re: (Score:3, Insightful)

        by dbIII (701233)

        *Even this isn't entirely true, as there are many hobbyist miners who will operate at a loss just for the sheer love of it. No, I'm not kidding.

        In a few years we'll look back at this and laugh at the bitcoin pyramid players as if they were methheads. In the meantime it's a obvious scam baited for geek. We've become mainstream enough to attract predators.

        • by pantaril (1624521)

          In a few years we'll look back at this and laugh at the bitcoin pyramid players as if they were methheads. In the meantime it's a obvious scam baited for geek. We've become mainstream enough to attract predators.

          Six years ago, when bitcoin started, slashdot haters were "predicting" that this "scam" will collapse in months. Now it should last few years, that is improvement! In few years maybe you will even realize your error and admit that bitcoin is indeed revolutionary technology!

          • While I could obtain a night of debauchery with an underaged girl with nothing but a bottle of whisky I've decided to not "realize my error" and instead leave the kids alone. I wish you scammers would stop preying on the naive here with your electronic version of that.

            Leave the kids alone lowlife.
      • by Skal Tura (595728)

        Indeed there are many hobbyists like that - we were just asked to provide first gen ASIC hosting, the ASICMiner 10Gh blades :O

      • by tftp (111690)

        Either mining remains profitable, or miners will stop mining.* At the point where they stop mining, the difficulty goes down until mining becomes worthwhile again.

        Can you imagine what a rollercoaster this will be? Price of a commodity is set at an exchange with a simple phone call or with an electronic contract. This price is set and is changed (as need be) easily and effortlessly, with lag that today is measured in milliseconds. However in BTC land in order to send the message to BTC Gods you have to cl

    • by hairyfeet (841228)

      This is why I've always said BC is a Ponzi scheme, it let the insiders at the top of the scheme make a ton quickly and then cash out when it became no longer profitable to mine while those getting into BC mining now will never even make back the cost of power, much less hardware.

      I'm all for a new cash that lets you bypass the Fed and their scams but this is just more of the same, the only difference is who got to make the big bux.

  • This [youtube.com] was the scene today at Mt. Gox as people frantically tried to withdraw their Bitcoins. Err, no wait, that's a scene from Mary Poppins. Seemed legit.

  • Why get your news off a blog post? Why not get it off the main site itself? They have a news feed right on the front page. There is nothing there about any suspension of withdrawals, but I would trust the actual main page over a blog which anybody can post whatever they want on.

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