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The Almighty Buck Bitcoin

Mt. Gox Gone? Apparent Theft Shakes Bitcoin World 695

Posted by timothy
from the repercussions-will-repurcate dept.
mendax was one of many readers to write with news about the apparent shutdown of Bitcoin exchange Mt. Gox, in the wake of massive theft. "The New York Times is reporting that Mt. Gox, the most prominent Bitcoin exchange, 'appeared to be on the verge of collapse late Monday, raising questions about the future of a volatile marketplace.' 'On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin's existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft. A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation.' Maybe the U.S. Dollar isn't so bad after all." Forbes goes further, and says flatly that Mt. Gox has shut down; Wired calls it an implosion. Reader electron gunner links to the alleged leaked document which outlines the exchange's crisis strategy. Watch this story for updates, since there are bound to be new developments.
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Mt. Gox Gone? Apparent Theft Shakes Bitcoin World

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  • Vive le Galt! (Score:4, Insightful)

    by Shadowmist (57488) on Tuesday February 25, 2014 @09:48AM (#46333197)
    Waiting for the libertarians here to demonstrate why this shows how Bitcoin is such a wonderful idea.
  • by Wireless Joe (604314) on Tuesday February 25, 2014 @09:50AM (#46333215) Homepage
    Oh, that's right. Unregulated currency free from government interference. Enjoy!
  • by seebs (15766) on Tuesday February 25, 2014 @09:58AM (#46333295) Homepage

    A programmer who would implement an ssh server in PHP [reddit.com] may be part of the problem?

    BTW, the article linked from that reddit comments thread really is beautiful. In the absence of the later disasters, I might have speculated that this was parody.

  • Re:Vive le Galt! (Score:3, Insightful)

    by Loughla (2531696) on Tuesday February 25, 2014 @10:01AM (#46333327)

    So, I assume you propose a barter system then?

    Be less ridiculous.

  • Re:Vive le Galt! (Score:5, Insightful)

    by Chrisq (894406) on Tuesday February 25, 2014 @10:03AM (#46333355)

    Waiting for the libertarians here to demonstrate why this shows how Bitcoin is such a wonderful idea.

    Where else would a bank be free to disappear with your money ..... Oh wait ... apart from Madoff, Icelandic banks, BCCI, ....

  • by Sockatume (732728) on Tuesday February 25, 2014 @10:03AM (#46333357)

    ...and you put it in the title of your comment, so nobody will notice it. :(

  • by bunratty (545641) on Tuesday February 25, 2014 @10:04AM (#46333367)
    If it's risky as an investment, how useful is it as a currency? I would expect a currency to be one of the least risky forms of property to be useful.
  • Re: Vive le Galt! (Score:2, Insightful)

    by Anonymous Coward on Tuesday February 25, 2014 @10:18AM (#46333509)

    There is no "low" if you can't ever withdraw your BTC. If there were any chance of buying at MTGOX extra-low prices and being able to sell elsewhere, the arbitrage opportunity would have attracted enough interested parties to equalize the market prices (the law of one price). MTGOX doesn't actually have the BTC to sell you; if you buy from them, you're buying scrip that's worse than fiat.

  • by number17 (952777) on Tuesday February 25, 2014 @10:24AM (#46333579)

    For small-scale transactions in time and value - e.g. turning $7 into BTC to immediately buy a CD - a relatively unstable currency is fine.

    Stability of currency is absolutely needed for a vendor. If you had to change your pricing every 10 minutes how would you ever advertise anything? Would restaurants have dynamic menus with pricing that changes throughout the meal?

  • Re:Vive le Galt! (Score:3, Insightful)

    by Gr33nJ3ll0 (1367543) on Tuesday February 25, 2014 @10:28AM (#46333639)
    What part of the current system do you think is fair, and gets resources to the most in need? It does a great job of moving resources around, and storing value, but nothing about it is fair, balanced, or guarantees distribution to the places best or helpful for society.
  • Re:Vive le Galt! (Score:2, Insightful)

    by Anonymous Coward on Tuesday February 25, 2014 @10:38AM (#46333739)

    I for one like how "NSA and GHCQ Employing Shills To Poison Web Forum Discourse" is right below this story. You realize that the primary purpose of exchanges like MtGox is to trade between fiat and crypto money, don't you? That, or more precisely one implementation of that, failed. This is partly due to the need for a centralized system because distributed proofs don't exist for fiat currencies.

    The Bitcoin system as such is chugging along just fine. People who keep their Bitcoins in their own wallets are not affected by the MtGox collapse, except for market fluctuations: There is a boatload of attempts to manipulate the market with false news about MtGox. For example, the authenticity of the "strategy draft" has been questioned by many, including people who know the Bitcoin ecosystem inside out. The joint statement by other exchanges and the Bitcoin foundation initially mentioned insolvency, but the statement has been changed to remove that bit. While most people agree that MtGox has been in deep trouble for a long time, even the competition isn't quite confident enough to bury MtGox just yet.

  • by Anonymous Coward on Tuesday February 25, 2014 @10:45AM (#46333815)

    Would you similarly suggest that diamonds are worthless if your neighborhood jeweler got robbed?

    Funny thing, those diamonds. You go and buy a $10,000 diamond from a jeweler and together with the diamond you get an official certificate stating that the diamond was worth $10,000 on a particular date. The same day you take the diamond to another jeweler, and they agree that, yes, it's worth $10,000, and then offer you $6000 if you want to sell it.

    Diamonds are nice status symbols allowing you to say 'look, I can afford to pay $10,000 for a sparkling rock' but they are worthless as investments as even when there is a consensus about their value, no one who is professional in the diamond trade will pay you anything close to that. If you want to get your money back, you need to find some sucker who doesn't know this and sell it to them.

  • Re:Vive le Galt! (Score:5, Insightful)

    by Oligonicella (659917) on Tuesday February 25, 2014 @10:57AM (#46333945)
    And it shouldn't, as people disagree on what that means and where those are.
  • Re:Ha! Ha! Ha! (Score:4, Insightful)

    by Opportunist (166417) on Tuesday February 25, 2014 @11:09AM (#46334083)

    Anarchist societies fail for the same reason communist societies fail: Humans are greedy assholes who'd gladly kill you for a buck if they think they can get away with it.

    It's also the reason why the capitalist system works out.

    Still, I think it's sad that we base our financial and economical system on the bad traits of humanity. Actually, I'm sad that it works.

  • by Anonymous Coward on Tuesday February 25, 2014 @11:39AM (#46334417)

    As someone who accepts BTC for transactions, and also pays suppliers in BTC, it's simple: advertise in BTC.

    Payment services (like bitpay for example) offer you the choice to "accept BTC" and get paid in your currency of choice. If you want to hold USD (or another currency), you pay your bills in USD, and you have things you want to do with USD, then you advertise your prices in USD.

    Consider this: most of the world doesn't post prices for goods and services. They expect people will haggle based on what they are willing to pay for something in person. This helps to prevent a "race to the bottom" on goods, allowing small businesses to pop up and offer competitive service at higher prices. (among things!) This ends up meaning people with more money are generally willing to part with more of it (they feel something is worth more to them) and people who need things end up being able to haggle a great deal (leaving them with more capital to do other productive things with)

  • Re:Vive le Galt! (Score:4, Insightful)

    by goose-incarnated (1145029) <lelanthran@g[ ]l.com ['mai' in gap]> on Tuesday February 25, 2014 @11:42AM (#46334457) Homepage Journal

    But bitcoin is money.

    No, it isn't.

    And people steal money.

    People steal lots of things - groceries, clothing, cars - that doesn't make those things "money" though.

  • Re:Vive le Galt! (Score:4, Insightful)

    by satuon (1822492) on Tuesday February 25, 2014 @12:52PM (#46335425)

    No it is not. The original claim was "Bitcoin just lost 92% of it's value", when in fact, it has not.

    The "bitcoins" in Mt. Gox are not, in fact, bitcoins, they are account balances, which means promissory notes by Mt Gox to pay out this amount of bitcoins.

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