Bitcoins : Mt. Gox gone bankrupt

[mistermack]

Mt Gox is, or was, the main trading floor for Bitcoins for some considerable time.
It's just gone bust. It doesn't affect the bitcoins that much, as it had stopped trading some time ago.
But it has taken with it, or lost to hackers (so they say) about half a billion dollars in bitcoins.

http://uk.reuters.com/article/2014/02/2 ... 6C20140228

Mt Gox had gradually stopped trading, over the last six months or more.
They were advertising a MUCH higher dollar price for bitcoins, than the other exchanges, but were not paying out the dollars when people sold.

This page links to the remaining bitcoin exchanges, and their current prices : http://preev.com/
Click the star next to the ? to see the choice of exchanges.

Ominously, the one named ''Local Bitcoins'' is showing a price of about $100 higher than the others.
That was the first sign of trouble at Mt. Gox.
People selling their bitcoins have the choice of taking $650 at Local Bitcoins, or $550 at Bitstamp.
Why would they take the 550? There must be doubt about the 650.

It's not looking good. Having said that, the price is still WAY higher than when Skepticus was pushing them on here.
About four times higher. My theory is that the price is being kept up by the situation in the USA of legalisation of Marijuana.
From what I've read, the people growing it and selling it can only deal in cash, as putting the money in a bank is illegal on federal money-laundering grounds. They must be stashing it in bitcoins. That's just my guess.

[laklak]

Anybody that invests in Bitcoins or Dogecoins or other vapor-currency deserves whatever happens to them.

[SteveB]

My life savings!

[JimC]

Who was the Aussie chap who was here for a while, absolutely mad about these bitcoin thingies?

Can't remember his name...

[Hermit]

Who was the Aussie chap who was here for a while, absolutely mad about these bitcoin thingies?

Can't remember his name...

...when Skepticus was pushing them on here.

As for the currency itself, it's a nerdy pyramid selling scheme that makes the detection of the selling of illicit drugs, money laundering and other transactions involving illegality very difficult to detect, and theft of Bitcoins is frequent and the size of the stolen amount usually massive. What's not to like?

[JimC]

Who was the Aussie chap who was here for a while, absolutely mad about these bitcoin thingies?

Can't remember his name...

...when Skepticus was pushing them on here.

As for the currency itself, it's a nerdy pyramid selling scheme that makes the detection of the selling of illicit drugs, money laundering and other transactions involving illegality very difficult to detect, and theft of Bitcoins is frequent and the size of the stolen amount usually massive. What's not to like?

Is it my fault that I only skim people's posts?

[Audley Strange]

Skepticus... hehehe.

I hope the dude made some money off it. I however remain skeptical of such currencies.

[JimC]

Skepticus... hehehe.

I hope the dude made some money off it. I however remain skeptical of such currencies.

Doesn't that really mean making money off others who lost some?

[Audley Strange]

Skepticus... hehehe.

I hope the dude made some money off it. I however remain skeptical of such currencies.

Doesn't that really mean making money off others who lost some?

Yep, fuck em. A fool and his money are easily parted.

[macdoc]

Early days....sounds like a history of banking and the Vancouver Stock Exchange amongst others....scamps and snake oil salesmen all.

Crypto-currency has a role to play for transactions and bounce goddamn paypal and VISA et al out of their rip off cushy positions.

We do okay mining....no different than any other economic activity. We concentrate on Lite-coin as it's GPU intensive and we can put pairs in towers we already have.

So kid made $350 or so in the last 12 days - I'm getting my books for free ( Litecoin exchanged for Amazon gift cards) and now TigerDirect is taking payment in crypto directly so good to get the GPU cards that way ).

I have to keep him off speculating with his own limited money and make sure he pays the power bill but hey it's gear that is already around....why not make something that people are looking for.
Easier than baking tarts.

[macdoc]

Doesn't that really mean making money off others who lost some?

wealth creation is not a zero sum game.

In the Mt Gox situation - it's either outright theft by the owners, or gross negligence of the owners in ignoring security issues that led to theft by others.

For miners it's turning electricity and computing power into a currency that can buy real wealth ( useful material goods ).
One amongst many.

For transactors - it's a way around the CC companies and their ridiculous fees.

For speculators...it's just one more thing to bet on.

Because there is a limit built into the amount of currency that can go into circulation then it has some advantages over the currently poorly implemented fractional lending money supply creation which blew the world economy apart by sending M3 through the roof based on false values of housing.

The global housing boom: In come the waves | The Economist
http://www.economist.com/node/4079027‎
Jun 16, 2005 - In come the waves. The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops. Jun 16th ...

That was 10 years ago and the pain continues ( particularly in Spain ).

Really tho it's just one more bit of chipping away at the mess created by speculation ( mainly in housing ) and manipulated by the major financial players.

They are not in this yet.....we'll see how the underground aspect of this copes with the need for regulation.

[Tyrannical]

The problem with the Bitcoin crowd is they don't realize we already have a digital currency, normal money. Cash is for tips and drug deals, most everything else is already handled electronically. Even historically a bank check is just a manual implementation of digital currency.

[macdoc]

It's not really a digital currency as you describe it- they are digital transactions .

With crypto-currency all transactions are digital and there is a track of every single time one changes hands.

This is a very good article on it.

Open networks keep growing even if individual participants fail.

It is critical to understand just how different an open payment network is from the proprietary payment networks that exist today. To illustrate this differently, let’s look at another open protocol: email.

Bad actors are quickly weeded out of open networks because consumers have choice — the choice of many new entrants coming on the market to vie for their business.

Email is a good example of an open network with a standardized protocol; and this standardization is one reason why email is fast, free, and works just about anywhere in the world. There is no single company or country who controls the email protocol (just like Bitcoin), so thousands of different clients and implementations have been created all over the world giving it great reach and driving down prices for consumers who have many email options to choose from. You may have noticed you can successfully send emails between different service providers (such as Gmail to Outlook). This is also due to the open nature of the protocol.

If an individual email provider has a security breach, or loses the integrity of its customers, this doesn’t reflect on the concept of email generally — it merely reflects on the integrity of the individual provider. Further, the beauty of open networks is that they provide a low barrier to entry for competing services to come in and vie for your business as a consumer. Bad actors are quickly weeded out of open networks because consumers have choice — the choice of many new entrants coming on the market to vie for their business. Open networks do a great job of keeping incumbent companies honest, because if they make a mistake and lose their customers’ trust, their customers will be gone in a flash.

An open payment network is a game changer.

Unlike Bitcoin or email, our financial institutions and payment systems today are proprietary. This limits the ability for consumers to easily switch between payment providers and creates less competition for services. If the provider of a proprietary payment network isn’t serving its customers’ needs, where else will their customers turn? There is only one company you can use to access a proprietary payment network — the company that owns it. This higher switching cost has a few side effects: less competition in the market, higher fees, limited geographic reach of any individual network, and less innovation around things like speed of transactions.

Clearly open networks offer a number of benefits, so why hadn’t an open payment network existed previously? Until recently, many people thought it wasn’t possible to build a payment system on an open network. The core issue was around preventing duplicate spending without using a central company to verify each transaction. Nothing prevents you from sending duplicate emails multiple times, for example, if you wanted to do this.

Bitcoin will take time to mature as the protocol is tested and strained with new types of attacks.

This problem (the “double spending” problem) is what Bitcoin solves, and in this sense it truly was a technological breakthrough or invention (one that I think will be viewed as very important historically). If you’re someone in the business of verifying transactions on a proprietary network, the invention of Bitcoin cannot be safely ignored. It will change or disrupt the providers of most proprietary payment networks in the coming years.

http://techcrunch.com/2014/02/28/whats- ... t-bitcoin/

[PsychoSerenity]

Doesn't that really mean making money off others who lost some?

wealth creation is not a zero sum game.

Just because it's not a zero sum game does not imply it is a win-win game. It's a complex system that's a mixture of both and can be very much closer to one than the other depending on the particular circumstances.

The aspect of wealth creation, trading, use of currencies etc. that is win-win is the benefit that arises from evenly distributed resources and the advantages in efficiency due to specialisation.

I've yet to see any reason to think these crypto-currencies are better for purposes of trade that might bring these advantages than any normal currency. The trade they seem to centre upon tends to be illegal and in some cases for reasons that are detrimental to society for the benefit of a few individuals.

The aspect that is zero sum, - speculation, hoarding, the fact that the money can't be traced, charged, taxed, - is primarily an advantage to those who are already wealthy. Crypto-currencies are very good at all this, especially where they're based on a limited money supply which leads to deflation, punishing those in debt and benefiting money lenders. The financial crisis wasn't caused by a flexible money supply, but by having it almost entirely de-regulated. Returning to a limited money supply doesn't solve this problem.

Even the mining is effectively speculation. It's only worth paying for the computers to do the work (which is not doing any genuinely useful activity for the benefit of society) where the value of the currency is maintained or increases. The coins you mine are mostly given value by other people paying their own money in. When you cash out what you've primarily done is take money form other people for no real benefit.

[mistermack]

Things appear to be moving fast in the bitcoin world.

Yesterday I made the comment that ''LocalBitcoins'' was putting up a price that was a hundred more than Bitstamp, and that that was the fist sign that something was wrong with Mt Gox.

I since looked up LocalBitcoins, and it appears to be a website putting people in touch with sellers, rather than a trading floor. Don't know how that is secure.

Today, just 24 hours later, bitstamp is quoting $570 dollars. LocalBitcoins is quoting $800 and rising.
From an uninformed viewpoint, it looks very bad.
Maybe some criminal gang has been running an organised rip-off of sellers and buyers, via the site, so people have stopped using it. The only reason that I can think of, to offer $800, is if you have no intention of paying.
http://preev.com/btc/usd/source:bitstamp
http://preev.com/btc/usd/source:btce
http://preev.com/btc/usd/source:localbitcoins