Mt. Gox Gone? Apparent Theft Shakes Bitcoin World 695
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.
Vive le Galt! (Score:4, Insightful)
Where's the bailout? (Score:4, Insightful)
Maybe a bit unclear on security? (Score:5, Insightful)
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)
So, I assume you propose a barter system then?
Be less ridiculous.
Re:Vive le Galt! (Score:5, Insightful)
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, ....
Re:Dunning krugerrands (Score:3, Insightful)
...and you put it in the title of your comment, so nobody will notice it. :(
Re:Mt.Gox has a long history of problems, Bitcoin (Score:5, Insightful)
Re: Vive le Galt! (Score:2, Insightful)
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.
Comment removed (Score:5, Insightful)
Re:Vive le Galt! (Score:3, Insightful)
Re:Vive le Galt! (Score:2, Insightful)
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.
Re:This is hysterical! (Score:3, Insightful)
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)
Re:Ha! Ha! Ha! (Score:4, Insightful)
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.
Re:Mt.Gox has a long history of problems, Bitcoin (Score:2, Insightful)
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)
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)
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.