MtGox Files For Bankruptcy Protection 465
Sockatume writes "The beleaguered MtGox bitcoin exchange has officially filed for bankruptcy protection in Tokyo. According to the Wall Street Journal, Bitcoin held an impromptu press conference that addressed recent rumors. They state that they have over $60m in liabilities against just $30m in assets, and confirm the loss of over $500m worth of Bitcoins, split between customers' balances (750,000 BTC) and company assets (100,000 BTC). Owner Mark Karpeles said, 'There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble.'"
Ha ha (Score:5, Insightful)
And so the libertarian unregulated money dream dies.
Re:Ha ha (Score:5, Funny)
A little too soon son...
As far as I know, the US dollar hasn't died yet.
Re:Ha ha (Score:5, Insightful)
And as soon as someone dares to sell oil for anything but USDs, it will become obvious.
The irony about it all is that it's probably going to be China that props the US up, considering that they have maybe the most to lose (right after the US themselves, of course) if the USD bubble pops.
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If the gold standard is so good then why do zero counties use it?
There are advantage and disadvantages of the gold standard. However a common theme in many of these points is that going off the gold standard allows a government to engineer debt and the economy more freely. In short, it gives politicians greater control. Whether that is a good thing or a bad thing depends on the nature of the politicians.
On a more practical note, gold is not equally distributed across the globe. Many countries could not go on a gold standard simply because they do not possess sufficien
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Re:Ha ha (Score:5, Insightful)
My toaster isn't worth as much as it was when I bought it, either.
Money is supposed to be a medium of exchange, not an investment. If you believe that a zero inflation rate is a good thing, I suggest you take an introductory course in economics.
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"Money is supposed to be a medium of exchange, not an investment. If you believe that a zero inflation rate is a good thing, I suggest you take an introductory course in economics."
I have a hell of a lot more education in the subject than "an introductory course" in economics, and you're just plain wrong. As are the "mainstream" economists who have been saying this for the last 100 years.
Even they will admit that inflation undermines savings (which, again, even they will admit are essential to a healthy economy). What they won't admit is that inflation props up Government and the Fed, and Wall Street, while hurting just about everybody else.
The current economy woes are a direct
Re:Ha ha (Score:5, Insightful)
Re:Ha ha (Score:4, Insightful)
I recently checked Reddit's /r/bitcoin, to see how the True Believers were taking the latest developments. To hear them say it, Bitcoin has already recovered off its lows, which mean everything is fine and all this bad news is just FUD spread by haters. Bitcoin believers truly live in their own universe.
------RM
Re:Ha ha (Score:5, Insightful)
To be fair there is a lot of FUD in the story. How did "bitcoin", a distributed crypto-currency, do a press conference? They mean someone claiming to speak for it did.
I'm not sure how they calculate their liabilities are only $60m either, if they own depositors $700m worth of BTC. Maybe they are hoping that their own collapse will devalue the currency so much their liabilities will fall that far.
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I don't think there is any clear conversion of liability in dollars to liability in bitcoins.
They are liable for Bitcoins that they don't have, they will likely never pay those back, just like their shortfall on the dollar side.
As any rabid Bitcoin user will tell you - conversion to dollars is irrelevant, the value is intrinsic. (Surpass any mint-stick, Or marshmallow mouthful you munch.)
Re:Ha ha (Score:5, Informative)
When declaring bankruptcy you have to declare assets and liabilities. If the liabilities are in other currencies you have to declare them too, usually in the local currency equivalent.
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They don't owe depositors anything unless the contracts they signed said they would guarantee X amount or value of bitcoin. The $60m in liabilities might somehow be related to their own loss of bitcoins since the value of 100,000 BTC is just shy of $60m.
Re:Ha ha (Score:5, Interesting)
For a start, I doubt you understand what FUD means.
I also fear you didn't actually read the article, just summary borked by Slashdot "editing".
I'm uncertain what they meant to say, but I guess they meant either "Bitcoin Foundation" (Karpeles was one of board members there and now resigned) or "Bitcoin exchange" (i.e. MtGox).
Re:Ha ha (Score:5, Funny)
For a start, I doubt you understand what FUD means.
I also fear you didn't actually read the article, just summary borked by Slashdot "editing".
I'm uncertain what they meant to say, but I guess they meant either "Bitcoin Foundation" (Karpeles was one of board members there and now resigned) or "Bitcoin exchange" (i.e. MtGox).
Well done sir.
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Or, the submitter (and editor) are bad at the english language and actually meant to say that MtGoX held the impromptu press conference.
At least, that's how I interpreted it, since it's unlikely that a random Bitcoin guy could speak authoritatively regarding the financial mess that is MtGoX.
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I'm not sure how they calculate their liabilities are only $60m either, if they own depositors $700m worth of BTC. Maybe they are hoping that their own collapse will devalue the currency so much their liabilities will fall that far.
Creditors owed in Japanese Yen will only accept payment in Japanese Yen. Debts owed in Bitcoin will probably be cloaked by an SEP field as far as Japanese financial and bankruptcy law is concerned.
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To be fair there is a lot of FUD in the story. How did "bitcoin", a distributed crypto-currency, do a press conference? They mean someone claiming to speak for it did.
It's the summary that screwed up the press conference reference (what a shock). According to the WSJ article, the press conference was held by Mark Karpelès and his team of lawyers.
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I recently checked Reddit's /r/bitcoin, to see how the True Believers were taking the latest developments. To hear them say it, Bitcoin has already recovered off its lows, which mean everything is fine and all this bad news is just FUD spread by haters. Bitcoin believers truly live in their own universe.
MtGox != Bitcoin
I hope it will come to you eventually.
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Tis just a fleshwound, right? You buttcoiners sound like the Black Knight after ever single one of these major issues. Gotta keep the faith, eh?
Well, MTGOX traded in USD and JPY and GBP and several other currencies as well. I suppose this is the beginning of the end for all of those as well.
Who are they? (Score:2, Troll)
White, young, male and privileged.
I'll just leave this here:
http://thinkprogress.org/econo... [thinkprogress.org]
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"Well, there’s a fair amount of privilege built directly into the currency: In order to buy the sometimes wildly expensive currency, Bitcoin users need to be wealthy."
It was hard to pick the stupidest sentence from that article, but I think I managed.
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so because "white, libertarian men" decide they want to support something, does that automatically make it bad or wrong?
I'm trying to understand what difference does it make...for example, if 95% of "black men" vote democratic (making them liberal), which according to polling data they do, does that mean the Democratic party is now to be demonized?
Re:Who are they? (Score:5, Insightful)
Is there some script or something that we could run that would scan for commenters that reference pyramid or ponzi in a bitcoin article and just automatically band them from future comments on bitcoin?
No. Slashdot infrastructure isn't here to respond to your personal belief that Bitcoin isn't a pyramid scheme.
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Google: Schadenfreude [goo.gl]
Re:Ha ha (Score:5, Funny)
Always a pleasure to say "I told you so" to people with objectionable belief systems.
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Why, because a private organization failed to centralize a decentralized currency? If you think about, this is a success of Bitcoin: it will be extremely hard to centrally regulate or control this product. The lesson here is the one the crypto-anarchist always wanted you to learn: in a digital society, only you are able to provide your own security, and only you are trust worthy.
These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation.
-- The Crypto Anarchist Manifesto [mit.edu]
-- Timothy C. May
-- tcmay@netcom.com
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Re:Ha ha (Score:4, Insightful)
Obviously some of the libertarian unregulated money dreamers have mod points today.
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"And so the libertarian unregulated money dream dies."
WTF?
(A) Bitcoin is no more "Libertarian" than cash is. Do you have something against cash?
(B) Bitcoin is not "unregulated". In fact, it's regulated a lot more than cash, which is also "anonymous". Surprise!
Where did this whole BS idea come from?
Re:gambling (Score:3)
Re:gambling (Score:5, Insightful)
Real Bitcoin users don't keep their bitcoins in an exchange but on their device.
No True Scotsman lost money on Bitcoin.
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Didn't we learn anything from the bank crashes? It's not like they've been that long ago.
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Re:Ha ha (Score:5, Informative)
And next time someone comes in and robs them blind, will the perpetrators be buttpirates?
Already been done by "pirateat40" (aka Trendon Shavers). [bitcoin.it]
Dude was offering 1% per week returns on an "investment" that he refused to give any information about because of his "proprietary business model".
There was no shortage of dupes lining up to give him their coins.
More like... (Score:4, Funny)
Legitimization (Score:5, Funny)
This debacle should only help legitimize bitcoin, as corruption surrounding the currency is now a public matter.
But it isn't a public matter (Score:2)
According to Janet Yellen [thehill.com]
After all, it's not a legitimate currency, is it? So no reason for the Feds to get involved! Which is also what her Japanese counterpart is saying.
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For sure. Just like when the banks blew apart and we had to prop them up with our money, we made sure with tight regulation and strict laws that something like that can never ever happen again.
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I dunno, it seems fairly resiliant. Everyone thought its value was due to the ability to buy drugs with it on Silk Road, but the close of that didn't do it much harm. Its value is already recovering after MtGox closed.
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I believe the Daily Show has lambasted it.
Re:Legitimization (Score:5, Informative)
Actually more like 18 [wired.co.uk], but MtGox counts as the first major exchange to fail. The rest of those amount to you or I throwing up an "exchange" as our CompSci101 project and then vanishing when they lost their shirts.
The loss of MtGox definitely counts as a blow to Bitcoin, but as others will no doubt point out, it had already started "failing" months ago (when you have a good 20% price spread vs the next highest exchange and you don't see arbitrage occurring on a massive scale, you know you have a problem). Any fools with either USD or BTC left in Gox since the beginning of the year (and even before that) pretty much stopped paying attention and deserve what they got.
And the effect on the BTC market since then bears that out - The price initially plummeted, but has already stabilized at 2/3rds its previous stable value. If anything, this counted (and still does, IMO) as a great opportunity to get in during a market correction and load up on deeply discounted BTC.
so you can predict performance then? (Score:2, Informative)
> a great opportunity to get in during a market correction and load up on deeply discounted BTC.
Sounds just like those stock pump-and-dump spam emails I get.
Re: (Score:2, Interesting)
No. I can "predict" that:
1) Existing BitCoin advocates won't suddenly say "oh, wow, guess I should delete my wallet now".
2) Joe Public now knows about BitCoin ("no such thing as bad PR" and all that); and
3) More interest in scarce resources drives their price up.
Interpret that however you want. Past performance is no guarantee of future results. This post contains forward-looking statements inherently susceptible to uncertainty and changes in circumstances. YM
Re:so you can predict performance then? (Score:4, Insightful)
2) Joe Public now knows about BitCoin ("no such thing as bad PR" and all that); and
There is such a thing as bad PR. It is when the first impression is negative. Joe Public is learning about BitCoin in the context of "million of dollars have been lost because BitCoins have been stolen". The general public now knows about BitCoin as "That thing that people keep losing their money in because it is always getting stolen". People don't want to lose money.
Re:so you can predict performance then? (Score:4, Informative)
That completely skips over the idea that shareholders may demand companies not accept or stop accepting BTC calling it fiduciary irresponsibility.
And, what if the governments get involved? Governments could start regulating the exchanges. Governments could issue onerous orders concerning BTC transactions. Imagine being a business and selling something for 1BTC and having the value drop by half before you have shipped the item. Do you continue the transaction as is, ask for more money, or cancel it? What if the government says you must continue with the transaction?
Now, image buying something for 1BTC and then having to pony up another the next day because the value dropped over night and the company will not ship unless you pay for the change in value? What if the government says you either pay or the transaction is canceled AND the business can charge you a fee for cancelling the transaction?
Finally, anyone who got BTC back in November have lost about 1/2 the value. Think about the people who have been talking up BTC to their family, friends, etc. who now get to answer about how this has effected them.
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> People who sold things for BitCoins (BTC) and haven't moved them into a hard currency
Pretty much every merchant prices their products in local currency (i.e dollars, euro, etc.) and uses a "payment processor" to provide an exchange rate via software, and convert the bitcoin payment on the fly to their local currency. So there is no currency risk. This kind of service is necessary until use of bitcoin is widespread enough to make it as stable as other foreign currencies. Foreign currencies do fluctuat
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The price initially plummeted, but has already stabilized at 2/3rds its previous stable value.
Thereby making the Zimbabwean dollar look stable in comparison.
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Bitcoin did what? (Score:5, Insightful)
According to the Wall Street Journal, Bitcoin held an impromptu press conference that addressed recent rumors.
Bitcoin held an impromptu press conference? Did the Dollar and the Peso attend as well?
Oh, you mean Mt. Gox held an impromptu press conference. Yeah, well, whoever trusted an online card trading portal as if it were a bank deserves whatever they got, IMO.
Re:Bitcoin did what? (Score:5, Informative)
This one's on me and not the editors, somehow I went from "the exchange's owner so-and-so" to "the exchange" to "Bitcoin" in the space of about half a cup of coffee. Although the image of the bitcoin network showing up in person is an amusing one.
I'm annoyed with myself because the misconception that this is a Bitcoin issue and not a MtGox issue is one I try to dispel.
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This is a bitcoin issue, you just don't want it to be.
Half a billion dollars worth of bit coins just disappeared, well, was just publicly announced as disappeared.
And there isn't shit that anyone can do about it.
Thats a problem, and its a problem that exists BY DESIGN.
Your currency is one for criminals. There will be a few innocents who could benefit from such a currency outside of the governments watchful eye, but your currency isn't outside the governments watchful eye. They still see everything that ha
Re: (Score:2, Interesting)
No, they didn't. Every single Bitcoin in MtGox still exists, you can track them down in the block chain, and in this specific case, someone even still has access to them
MtGox didn't lose BTC, they lost transactions (or rather, double-counted them in one direction) due to a flaw in their implementation. MtGox "lost" nothing more than an imaginary number on their balance sheet. Doesn't matter
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It's a Bitcoin Exchange issue, not a systematic issue with the underlying Bitcoin network itself. It is, however, Bitcoin's problem, in that exchanges are how everyone interfaces with it.
Comment removed (Score:4, Insightful)
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It's a Bitcoin exchange problem, not a problem with Bitcoin itself. In much the same way that the current economic crisis is a banking problem, and not a dollars problem.
Falkvinge et all investigaton suggests inside job (Score:5, Interesting)
Thousands of volunteering and self-organizing detectives have been meticulously laying a puzzle that reveals the Gox billion-dollar heist as an inside job. As smoke clears on the implosion of the Empty Gox bitcoin exchange, thousands of people in the community committed to revealing the truth behind the stonewalling exchange. What was claimed first to be a technical problem, then an outside theft, has been conclusively determined that the MtGox management knew too much, too long ago, to have this be an ordinary case of theft.
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Since these are Digital "coins" don't they have some unique property that can be identfied and tracked?
Re: Falkvinge et all investigaton suggests inside (Score:2, Insightful)
Indeed they do. And some 400000 coins Karpeles publicly moved two years ago to prove ownership, still sit where he put them.
So it seems someone forgot their wallet password. Probably they didn't notice until people rushed to get out and they tried to dip into cold storage.
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Yes, the smell of testosterone.
http://suitpossum.blogspot.com... [blogspot.com]
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Bitcoin "addresses" are unique. They are derived from several rounds of hashing functions on the private key of of a public-key encryption pair. Addresses hold some bitcoin balance amount, which is recorded to 8 decimal places. Bitcoin transactions move some amount of balance from one or more input addresses to one or more output addresses. The private key is required to digitally sign a transaction, so whoever knows that key, can spend the coins they control. Bitcoin "wallets" are files that contain a
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Yes, they do, you utterly missed the point. You are not anonymous in ANY way using BitCoin, exactly the opposite in fact. The only theory you can follow is that you can create so many fake identities that its impossible to figure out who you are, but again, this is false.
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And so the point of maintaining the blockchain with a record of where each coin goes is....
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is this the same as the other self organizing investigation that tracked the silk road bitcoins to bitstamp?
"I apologize for causing trouble." (Score:5, Funny)
Your stewardship of Mt Gox resulted in a fairly significant black eye for the very currency you've plundered and/or allowed to be plundered.
I find your lack of remorse disturbing.
This is actually good news (Score:5, Insightful)
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A small percentage of the people who lost money at MtGox will learn from this and be more careful and picky as to where they place their money in the future.
Yeah: they'll keep their money in Yankee dollars instead.
Re:This is actually good news (Score:5, Insightful)
So what you're saying is that everyone is supposed to magically learn from this how to defend against the next exchange which does a better job of handling its theft so no one gets any red flags until its too late and they've take ALL of the money rather than just half of it? Is that what you're saying?
This job was sloppy. The next one will be bigger (assuming a collapse doesn't occur this time, which I don't think it will, probably 1 or 2 more first) and probably not show any signs that its happening in advance.
Re: (Score:3, Informative)
So what you're saying is that everyone is supposed to magically learn from this how to defend against the next exchange which does a better job of handling its theft so no one gets any red flags until its too late and they've take ALL of the money rather than just half of it? Is that what you're saying?
YES! Well, not the "magically" part.
Here is the lesson: You do not store a crypto-currency on someone else's server. You maintain control of it yourself.
Now, you might need to convert that crypto-currency into a local currency, or vice versa. And to do that, you will need to find an individual or an exchange with a solid reputation (because you can not inherently trust them). But once that transaction is complete, you immediately take back control of your crypto-currency. You DO NOT leave it in someone
Re:This is actually good news (Score:4, Insightful)
cry for more government, more regulation and more fascism.
Measured amounts of government regulation is what separates us from Lord of the Flies scenarios. There is simply no basis in fact to equate reasonable bank regulation meant to prevent outright fraud with fascism.
Not a shock (Score:2)
Not at all at this point. Hard to believe this went on for so long. If they had fixed it earlier, even a 5 or 10% loss would be a problem but, it would be something they could recover from. Down by half?
I mean, a 1% discrepancy in the books...shit, something is wrong, but you almost expect something like that now and again; hell my grandfather had an exta 10k in his account, and when he reported it to the bank they thanked him cuz they had been looking for where it was but couldn't find it....and 10k isn't
... aaaaannd it's gone. (Score:2)
[ANN] Mt.Gox overview: January 2012 / Transparency (Score:2)
Here's the thread on bicointalk [bitcointalk.org] where Mt Gox announced their first attempts at providing some operational/financial data to the bitcoin marketplace.
Surprise! They never followed through with their commitment. :-(
How can they have only $60M of liabilities? (Score:4, Interesting)
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No. When handled correctly a bank or other type of financial institution should _never_ mix their own funds with their customers. They are completely separate entities.
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I imagine that'll come up in due time; Bitcoin users account for almost all of MtGox's creditors.
Re:How can they have only $60M of liabilities? (Score:4, Insightful)
No, client funds are not company funds. If you run a parking lot and a car gets stolen from the lot you're not liable for replacing the car. You might get that liabilty if your valet wrecked the car, but not in general. Same with deposit boxes, storage lockers, mail packages and so on if you want to get your money back in case of theft you need insurance. Which is what FDIC is for bank accounts. No insurance, then you might not even have a claim against MtGox. First you'd have to take them to court and win to make them liable for damages. And even if you do, well there won't be any money to collect there anyway.
In accounting, generally deposit accounts with customer money are considered liabilities. If a depositor shows up and asks for their money, you are obligated to give it to them. You seem to be confusing legal liability (a "duty of care" to do or not do something) with financial liability (an obligation which must be paid back).
Mt. Gox didn't have storage boxes without knowledge of what was inside them (safe deposit box analogy). They had computerized accounts for each customer, with money in each account. Regardless of whether they were a "bank" they were holding money for other people and that money is a liability in the financial sense.
MtGox (Score:2, Informative)
Ht Charles Stross [antipope.org]
Interesting attack on Bitcoin (Score:5, Interesting)
From the AP Story [washingtonpost.com]
The reactions of the various Japanese government officials are interesting. Essentially, there was no "theft" because Bitcoin is not a "real" currency. Which is an interesting attack. Anyone can steal your bitcoins and you have no recourse to the law because it isn't actually theft.
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If it's government-protected currency, it's government-regulated currency. Bitcoin owners have been crowing for a while that Bitcoin's raison d'etre was to be independent of governments, and I'd say that I'm pretty comfortable with the JP government going "you don't want to play in the financial industry sandbox? You don't get to come in when your sandbox is wet."
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That's what I've been telling people for years - Bitcoin isn't a currency. Even the fiat currencies of the world have the economies of the countries issuing them behind them, Bitcoin has nothing. Bitcoin a trade token on par wi
How am I going to exchange my Magic cards now? (Score:5, Funny)
Yeah, yeah, millions in bitcoins, but what about the Magic the Gathering Online Exchange? I keep all my wealth in Moxes. How will I exchange them now?
So, incompetence then? (Score:2)
So basically someone ginned up what they thought was a banking system only to discover they were grossly incompetent to run it and hadn't implemented anything resembling security?
Or did someone just manage to scam everyone out of bitcoins?
From the sounds of it someone just threw something together which was woefully insecure and allowed for a rather large scale theft.
Real banks have been at this for decades, and even they have problems. Trusting someone who just built one over the last year strikes me as a
Damn! (Score:2)
"I apologize for causing trouble" (Score:2)
wtf. 500 mil is not just 'causing trouble' and something you can simply dismiss with an apology. Time for a public hanging.
Re:"some weakness" (Score:5, Informative)
MTGox's fault for not understanding a spec whilst using it to move vast sums around but it probably highlights the importance of good naming practices when creating a spec.
Re:"some weakness" (Score:4, Insightful)
Making a mistake is one thing. Not realising that something is wrong when over $500000000 slowly disappears from your accounts is the criminal thing. I mean, in practice this must mean that they constantly noticed their hot wallet is empty (when it should not be) and filled it from the cold wallet without investigating anything. Over and over and over again.
Amazing.
Re:"some weakness" (Score:5, Insightful)
It tells me they were not following accounting principals and balancing the books at the end of the month. (Which I suspected long ago when I closed my account with them)
Any company that I question the accounting practices on is one that I run from screaming. Stocks, jobs, bitcoins, does not matter.
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No, that's exactly what OP is describing. The fact that a single transaction can have different binary formats owing to variations in zero-padding on the txid is called "transaction malleability".
Re:"some weakness" (Score:5, Insightful)
Actually, no money today "just works". Yes, the old coins did. They were minted out of precious metals and because of that they had some value. You could essentially cut off parts of it and sell those parts if you felt like it. That actually did happen.
Roman coins are actually a rather bad example because they, at least for some of them, already had the same effect money has today. The value is less the intrinsic value of the coin itself (made of bronze they were not that valuable), but because of the trust people had into the issuing entity (the Roman senate, or later the emperor). In early medieval times, people returned to the system of intrinsic value because there was no entity that you could (or rather would) really rely on that could say that copper in your bag is worth more than the metal is worth. That only came into existence again when countries were strong enough to give money its symbolic value again. And that's where we are today.
The coin (or bill, for that matter) itself isn't that valuable, but its symbolic value is what gives it its value. It represents something. When I hand you a dollar bill, it's worth one dollar. Why? Certainly not because the paper with the funny print on it is worth a buck. The material value of a dollar is negligible. And it gets even more absurd with a 100 dollar bill.
The value of modern currency is in the trust the person receiving it has in it. If you allow me to buy something worth 100 bucks with a 100 dollar bill, you trust that bill to be worth those 100 dollars (ok, you might want to check whether it's genuine because you do not trust me, but if it's genuine and the Fed printed it, you trust that bill), you rely on getting something worth 100 dollars again with that bill.
Why do you do that? Because you trust the entity issuing the bill that they can back it up with something. In case of the US, probably you trust it because you rely on the US' economy to produce enough to prop up the bill's value.
That our current currency has zero intrinsic value can easily be seen when states start to fail. Take most of the European countries after the war. The money bills were essentially worthless. They printed insane denominations on them (up to a billion, and with a hint of luck you could probably get a loaf of bread with it), but they still lost value pretty much by the second simply because nobody trusted the money anymore.
So essentially, the value of contemporary currency is in the trust people put into it. The trust that they will get something in exchange for it. As long as that trust applies universally, a currency will continue to work. When that trust is lost, the currency becomes pretty much worthless.
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Umm... the same can be said about any currency. Every currency is only worth whatever the receiving end is willing to part with in exchange for it.
The thing that makes our current currencies "valuable" is simply trust. I trust the issuing entity (the country, the fed, the ... whoever prints your money) that they know what they're doing, that they ensure the currency is stable and that I can still expect that I will get something in exchange for it tomorrow. If that trust is gone, the currency becomes a piec
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Fail for who, lets face it - people who were in prime position to steal all bitcoins from mtgox were mtgox owners/employees. If you had half a billion dollars in cash sitting in front of you, wouldn't you make off with it? I know i would.
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This is my conspiracy theorist side talking, but I wonder if the heist was actually state sponsored (as opposed to being done by "criminals"). What better way to destroy a currency than to completely erode any public trust in it? And what better way to do that than to orchestrate one or more "epic fails" like this one, that have people talking and questioning the security of bitcoin. Maybe it wasn't so much about stealing the money as it was to undermine the currency itself.
Now please excuse me while I g
Re: "...and the bitcoins have disappeared." (Score:4, Insightful)
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That's the thing though, they haven't disappeared. The Bitcoin ledger is public, every transaction traceable. MtGox should know or at least be able to figure out where the coins went, and then see what they were spent on.
That's the problem with stealing Bitcoins - like real money you still have launder them somehow.
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Yeah, I would really like to know how this happened, because as far as I thought I knew, all BitCoin transactions are "logged" in a public "blockchain" or something, so you can actually track all transactions to their anonymous sources.
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The bitcoin protocol itself works by having every transaction public, this is all stored in the blockchain. I send you a coin, and publicly announce this with a message signed with my private key. If I try to spend the same coin twice, then this is where the transaction confirmation chain kicks in (and why you need to wait for X number of confirmations). When you announce sending a coin to somebody else, I see the message, and additionally sign your transaction message with my private key and add it to the