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Marginalizing Mt. Gox: "Bitcoin Is Becoming Serious; And Serious Means Accountability"

Tyler Durden's picture




 

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

I was going to start this article by stating: “Mt. Gox needs to get its shit together.”

But its too late for that. Much too late.

Mt.Gox has been the dominant Bitcoin exchange pretty much since the beginning. In its brief history, it has suffered several bad setbacks, with the one last spring an incident I am intimately familiar with. There were plenty of reasons to give them a pass in the past, and many of us did. It was early. It was a complete and total Wild West and all of us interested were learning this thing together. There were bound to be some major growing pains. Gox made some changes, came back up and a great deal was forgiven. Not this time.

Bitcoin is no longer in Phase 1 of its evolutionary cycle. I believe Phase 2 for Bitcoin began in earnest back in November 2013, when the Senate Committee on Homeland Security and Governmental Affairs held its first hearings on the topic. Those hearings made it clear that, at least for the moment, no significant roadblocks would be put in place to prevent people from transacting with one another using the crypto-currency. Phase 2 also saw the largest Bitcoin investment to-date, a $25 million infusion led by Silicon Valley VC firm Andreessen Horowitz, as well as acceptance by major U.S. retailers, with Overstock being the most significant. Bitcoin is becoming serious, and serious means serious accountability.

As a free market currency, the market will decide the products required to keep the Bitcoin protocol open and functioning to its highest potential. The disruption of Mt. Gox will be another test for Bitcoin. A test which certainly represents a psychological challenge, but probably not much more than that. Bitcoin will survive and come out of this stronger than it was before, just as it has done so many times in the past. However, I do not believe Mt. Gox will be so fortunate.

Mt. Gox is likely to continue to lose customers on its way to ultimately becoming marginalized as an exchange. In fact, Bitstamp is already trading more volume than Mt. Gox and I’d expect this lead to grow going forward. It also provides opportunities for more market players, although the various government rules and regulations out there have definitely stalled such growth, particularly in the U.S., which is not host to any exchange of significance.

Personally, I do not see how anyone is going to feel comfortable trading or holding sizable BTC balances on Mt. Gox after this fiasco. After all, being able to move your bitcoins from one place to another is the most fundamentally important part of the protocol. If people begin to question the ability to do this, they may start to question the usefulness of Bitcoin itself, which is not something any of us want to see.

That said, Mt. Gox’s decline is nothing new, as it had already begun following the serious issues early last year. Coindesk reports that:

For example, on 16 April, the number of bitcoins traded on Mt. Gox alone equaled 572,186 BTC (90% of the total of the three exchanges).

 

In contrast, on 18 December there was a roughly equal dispersion across BTC China, Mt. Gox and Bitstamp, with a volume of 93,934, 109,723, and 137,070 BTC respectively.

Now here’s a really powerful graph showing the volume traded on the top three exchanges that demonstrates what I am talking about:

BTCvolumechart

Graph courtesy of Coindesk.

As you can see, Mt. Gox has already been in decline, and I expect that to accelerate going forward. In fact, the price on Mt. Gox usually trades at a significant premium to Bitstamp, but is right at this moment trading at a $40 discount. This is not good.

Screen Shot 2014-02-08 at 2.30.48 PM

Graph courtesy of Coindesk.

What I really want to see is Mt. Gox resolve this issue as soon as possible so that the Bitcoins tied down with them are released and can be freely moved around by their owners. If this happens soon, Bitcoin will rapidly emerge from this difficult moment much stronger and hopefully with some more important lessons learned.

For Mt. Gox though, I think it’s pretty much game over.

 

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Sat, 02/08/2014 - 21:40 | 4416215 Yen Cross
Yen Cross's picture

  Paging "Phone Clown"

 

Sat, 02/08/2014 - 21:43 | 4416219 Dear Infinity
Dear Infinity's picture

It's 2014 and all markets are a joke

Sat, 02/08/2014 - 21:51 | 4416237 wintermute
wintermute's picture

Multiple, professional, exchanges is the next step in the growth phase.

Sat, 02/08/2014 - 21:56 | 4416255 DoChenRollingBearing
DoChenRollingBearing's picture

Let a thousand exchanges bloom!

Sat, 02/08/2014 - 21:56 | 4416258 Soul Glow
Soul Glow's picture

Is that a Bush reference?

Sat, 02/08/2014 - 22:02 | 4416271 DoChenRollingBearing
DoChenRollingBearing's picture

ObaMAO!

Sat, 02/08/2014 - 22:21 | 4416307 THX 1178
THX 1178's picture

New title, "Mt Gox and Bitcoin grasp at straws."

Sat, 02/08/2014 - 22:30 | 4416337 Stackers
Stackers's picture

I thought MtGox's terms and conditions for money withdraw were shit the first time I read them in 2012. Never understood why it was so widely used, other than it was first. It's always had crappy customer service and service terms.

Sat, 02/08/2014 - 22:32 | 4416342 fonestar
fonestar's picture

Mt.Gox needs to just go away now.  It was an important place in the first chapter of Bitcoin's history but at this point it's more of an embarassment (and one that has no business impacting the price of BTC).

Sat, 02/08/2014 - 22:37 | 4416357 Soul Glow
Soul Glow's picture

It's a free country....er, I mean internet.

Sat, 02/08/2014 - 22:39 | 4416370 fonestar
fonestar's picture

Yes, that much is true.  Actually the more money that goes into BTC, LTC, etc I believe helps fortify the internet and net neutrality.  If Bitcoin can grow to a large enough size no politicians will dare mess with a free and open internet.

Sat, 02/08/2014 - 22:44 | 4416381 Soul Glow
Soul Glow's picture

Please don't start sentences with "actually".  It makes you sound like a know it all.  Thank you for visiting Fight Club.  Come again.

Sat, 02/08/2014 - 22:48 | 4416396 fonestar
fonestar's picture

Come again? 

fonestar has never met a door he has not been forceably shoved through.

Sat, 02/08/2014 - 23:53 | 4416572 Soul Glow
Soul Glow's picture

Actually you have walked through all the doors at your own valition.  

If you question this, I will remind you, you currently have the choice to become a monk - or a salesman.  

Which have you chosen?

Sat, 02/08/2014 - 23:59 | 4416583 fonestar
fonestar's picture

fonestar is a virtual Shaolin monk in Satoshi's name.

Sun, 02/09/2014 - 00:02 | 4416592 Soul Glow
Soul Glow's picture

Actually the more money that goes into BTC, LTC, etc I believe helps fortify the internet and net neutrality.

Fortify?  And how is that?  You stated an opinion without giving a reason.  Care to give a reason how bitcoin is going to help people sit on their ass, accumulate wealth, and create a better tomorrow?

Sun, 02/09/2014 - 01:29 | 4416733 silverserfer
silverserfer's picture

Ottowa obituarty-  April 14, 2014 Gary Furgason  age 41 was found dead in his mother's attic of apartent suicide. His obituary mentions  he was fond of bitcoins, virtual pussy, and peanut butter m&m's. It goes on to mention he was known online as "Zorlog in the world of warcraft forum and "fonestar" in the pokemon and digicoin forums. Police specualte the suicide was a result of a massive $2450 loss in biticoin investment scam. He wes aparetly lured to a prop bitcoin exchange where he lost his 3.2 biticoins that were "vapoirized" as those in the internet community woud say.

 

may God have mercy on his soul. And may God have mercy on whatever poor chap had to haul around that 400 lb corpse at the Ottowa morgue.

 

Sun, 02/09/2014 - 15:08 | 4417525 fonestar
fonestar's picture

It looks like Bitcoin is headed down into the $600s on BTC-E and fonestar couldn't care less.  Just another buying oppertunity for the strongest currency on planet Earth.

Sun, 02/09/2014 - 20:40 | 4418442 silverserfer
silverserfer's picture

no thats dogecoin fonestar. You are so pas se.

Sun, 02/09/2014 - 10:14 | 4417004 wallstreetapost...
wallstreetaposteriori's picture

All I hear when you speak is slurp... slurp...  satoshi.... slurp slurp.  

Sun, 02/09/2014 - 12:34 | 4417201 fonestar
fonestar's picture

You stick to your FUD and I will keep my hyperdeflationary currency.  We will see which is worth more in three years time.

Sun, 02/09/2014 - 11:23 | 4417075 Basilian
Basilian's picture

Fonestar I know you are very invested in the rhetoric surrounding bitcoin. I enjoyed your perspective as well as those from some from your nemesis on here. The thing I cannot understand is that surrounding all this rhetoric is the reality that "Law" is created by governements and enforced by tax payer funded goons. So when you say 'no politician would dare...." I am not sure we are all reading the same headlines and seeing the same movie. There is no Dept of Justice -- simply look at HSBC --- so seeing as this is the world we live in what power do you think Bitcooin wields over any goverment anywhere? When users of bitcoin are criminalized and hunted down and put to death and labeled insurrectionist, anarchist and terrorist I am almost certain its popularity will plummet. "Adapt of die" can also be "Use it and Die."

 

Sun, 02/09/2014 - 12:40 | 4417209 fonestar
fonestar's picture

What type of global police force is going to work together to enforce a Bitcoin ban?  Are the Chinese, Americans, Koreans, Slovenians, etc, etc all going to work together?  That's not a very plausible scenario.  At the end of the day, technology, progress and mathematics are much, much more powerful than these governments and their "laws".  In fact, if governments and laws want to stay the least bit relevant and retain credibility they will be forced to adapt to Bitcoin.

Sun, 02/09/2014 - 13:41 | 4417333 Basilian
Basilian's picture

Governments wield the power to control or give over control of currency decree, currency production, and essentially the sovereignty of a nation and people to central banks. I am not sure the big governments will want this new age of transparency and will fight a very ugly fight. I am not trying to be "right" or "win" this discussion I value your insight and logic. I am also not trying to be a pessimist and hope we forge forward. I think we all know you cannot kill human frailty of character with a gun---if only it could be so easy. I think everyone here was almost happy that Krugman had the hubris to say on national TV that "the US dollar is backed by men with guns" --- something that this community has always known and never had to say. The UN and the " world" opinion has really meant nothing -- look at every UN vote and you all know only the big 5 decide anything. There have been overwhelming votes on issues that merely get steam rolled and go unreported in the media. Look at the magnitude of killing to preserve the federal reserve currency and the petro dollar and you think seriously that bitcoin will bring these forces down by reaching some hundredth monkey tipping point? The financial system and stock market have allowed the monopolization of the means of production into the hands of the government/corporate partnerships that exist. The legal world enforces no law and constantly downgrades criminal acts to civil ones with a fine of the cost of doing business with billions being made and millions being paid in fines. Legal defenses these days are based on deniability or on individual ignorance even though that same individual walks with the profit of his ignorance. Why would any government that gets to print endless money ever allow that power to be taken away? In this world if you cannot buy a person with your endless power to give them fake money you can kill them with that same power to print endless fake money that you force people to use. Our financial industry is hooked on a velocity of money profiteering and the rest of us are along for the ride. Exactly how does bitcoin ever become more than a fringe percentage and gain this leverage you allude to--you and so many others? Take any place Bitcooin is currently being used to success and go in there and kill everyone using it---what happens? If the shadow banking industry is really almost as big or bigger than the global banking industry why would that be easily surrendered? I hope you or others can explain. The readers here represent a insignificant knowledge pool of how the world even really works -- the rest of the population is asleep and ignorant to these mechnisms.

Sun, 02/09/2014 - 14:02 | 4417373 Basilian
Basilian's picture

Fonestar your logic on math and science is great ---your knowledge on the definition of power and human nature needs to be revisited. A trip to Syria maybe and look into the face of the heart of darkness and not be allowed to turn your gaze away from it for a while. I like the world you describe.

Sun, 02/09/2014 - 15:45 | 4417632 fonestar
fonestar's picture

Look, the biggest and best weapon TPTB have against Bitcoin is their floundering media empire which they will use to try and scare people into remaining in their inflationary schemes.  When discussing Bitcoin vs. dollars I can't think of a time in history where one product was so vastly superior to the other in every conceivable way.

Sun, 02/09/2014 - 17:40 | 4417912 Basilian
Basilian's picture

The monetary logic is sound I am just not seeing the leverage for this to push past fringe ---and this is not an attack on your position. Do you think those governments and corporations that control these monetary systemic mechanisms globally want transparency so there can be true meritocracy?How does that benefit the kleptocracy?

I think that bitcoin will be a great fringe area that will be allowed to flourish until its not allowed to flourish. Historically we saw that gold in the past had a fair market value placed on it in by the US governement and a forced sale under the guise of national security --- what's changed? Couldn't bitcoin be blamed for funding the next 9/11 and be criminalized that easily? Will people use it under penalty of death--NDAA? You asked earlier what" world police"---have you not seen the Iraq war and Afghanistan and Libya and so many others---that "world police" is the one. Do other cultures resist western culture--absolutelly not--they resist Western banking and a loss of soveriegnty that goes with it. Couldn't Bitcoin even if it was adopted be just as easily subjected to the price control of products if the prices are being set by the current monopoly that exist? I guess the only thing you do not get there is a secret ledger that currently exist for the shadow sector.

I agree with you in so many areas except your dismissal of true power and human nature that daily exhibits itself in global slaughter. I think you have to pay governement law enforcers like wall street rock stars along with the judges and regulators and they could never be bought off. Insulate your control over the creation and use of capital like a cult and educate your population on the pure evil of "white collar victimless crime" and why it most assuredly and agreed upon universally must be punishalbe by death. Until you have a population with that level of resolve and mantra like understanding that "central bank" is BAD then I am not sure it ultimately offers an alternative.

I hope the trajectory is not boring you.

Sun, 02/09/2014 - 19:21 | 4418205 TheHound73
TheHound73's picture

If they want to start a war against a decentralized currency, you and I can't stop them.  Which side are you on?

Sun, 02/09/2014 - 17:40 | 4417913 Basilian
Basilian's picture

The monetary logic is sound I am just not seeing the leverage for this to push past fringe ---and this is not an attack on your position. Do you think those governments and corporations that control these monetary systemic mechanisms globally want transparency so there can be true meritocracy?How does that benefit the kleptocracy?

I think that bitcoin will be a great fringe area that will be allowed to flourish until its not allowed to flourish. Historically we saw that gold in the past had a fair market value placed on it in by the US governement and a forced sale under the guise of national security --- what's changed? Couldn't bitcoin be blamed for funding the next 9/11 and be criminalized that easily? Will people use it under penalty of death--NDAA? You asked earlier what" world police"---have you not seen the Iraq war and Afghanistan and Libya and so many others---that "world police" is the one. Do other cultures resist western culture--absolutelly not--they resist Western banking and a loss of soveriegnty that goes with it. Couldn't Bitcoin even if it was adopted be just as easily subjected to the price control of products if the prices are being set by the current monopoly that exist? I guess the only thing you do not get there is a secret ledger that currently exist for the shadow sector.

I agree with you in so many areas except your dismissal of true power and human nature that daily exhibits itself in global slaughter. I think you have to pay governement law enforcers like wall street rock stars along with the judges and regulators and they could never be bought off. Insulate your control over the creation and use of capital like a cult and educate your population on the pure evil of "white collar victimless crime" and why it most assuredly and agreed upon universally must be punishalbe by death. Until you have a population with that level of resolve and mantra like understanding that "central bank" is BAD then I am not sure it ultimately offers an alternative.

I hope the trajectory is not boring you.

Sun, 02/09/2014 - 14:00 | 4417374 Basilian
Basilian's picture

Fonestar your logic on math and science is great ---your knowledge on the definition of power and human nature needs to be revisited. A trip to Syria maybe and look into the face of the heart of darkness and not be allowed to turn your gaze away from it for a while. I like the world you describe.

Sun, 02/09/2014 - 19:54 | 4418318 MeelionDollerBogus
MeelionDollerBogus's picture

enforcing every router manufacturer to hard-code it into their chips would do it.
The entire planet would be rid of bitcoin pretty much instantly even without the grid going down.

Sun, 02/09/2014 - 00:06 | 4416603 MeelionDollerBogus
MeelionDollerBogus's picture

Completely agree. People who actually produce tangible goods & necessary services need to start charging for them in bitcoin & other cryptocurrencies.

I'll hold my gold & silver for when the grid goes down but IF the fiat exchanges are wiped out or vastly reduced AND prices are NOT IN DOLLARS, euros, yen, but in digital currencies, I will use them.

I would expect, of course, a spread to apply given volatility but in the last 90 days the bitcoin volatility is much better than it has been BEFORE that.

It's still down to 630 fiat USD from that big time high, a huge drop, but once people establish GOODS & services for digital currencies & ensure they avoid any which look compromised, this should all level off as barter-power & equal-value for X x good_A vs Y x good_B will force volatility down, as the tangible values will enforce a range of volatility on a currency used to price each such thing.

I still don't like the exponentially expanding blockchain for bitcoin but provided other digital currencies have no achillies heel each, that can take care of the problem by using another one.

 

Sun, 02/09/2014 - 00:17 | 4416626 Soul Glow
Soul Glow's picture

So people who, "produce tangible goods & necessary services" need to charge for it in a currency that is not tangible nor a necassity?

Sun, 02/09/2014 - 00:36 | 4416655 acetinker
acetinker's picture

Dunno what a necassity is, but will agree that MeelionDollarBogus is most likely a college professor.  In other words, he couldn't pour piss out of his boot if the instructions were on the heel.

 

Sun, 02/09/2014 - 00:43 | 4416675 FredFlintstone
FredFlintstone's picture

Awesome, can I use this? ..."he couldn't pour piss out of his boot if the instructions were on the heel"

Sun, 02/09/2014 - 00:51 | 4416693 acetinker
acetinker's picture

You certainly can, Fred.  My father-in-law gave that one to me.  Now, it's yours.

Sun, 02/09/2014 - 01:57 | 4416757 acetinker
acetinker's picture

Fred, It is incumbent on me to tell you that any knowledge you may impute to me, is not actually my own.  I may freak you out., or compel to look further. Rest assured, Armagedom is not imminent.

Sun, 02/09/2014 - 19:53 | 4418306 MeelionDollerBogus
MeelionDollerBogus's picture

no: computer programmer first, then escort driver, now I run conferences for the big banks.

Sun, 02/09/2014 - 01:09 | 4416714 Genetic
Genetic's picture

Hmm, I felt something was wrong with his statement. I have a very old way of looking at money. That it is a compression of time/work. So if I let say, am a plumper and I work all day, I should take a currency for payment that someone made on their computer with a program. Question: why am I the only human doing work? Another thing that hit me is, the fed and US-Govt seem to be find with bit coin. And that does not seem strange to anyone? Also wasn't it Rockefeller who was talking about digital currency to Arron Rosso long before bit-coin? There just seem to be to many things that make you go Hmmm! I did a short blog-post on a conspiratorial view of bit-coin with a very interesting fraudulent slip from Max Keiser on bit-coin tangibility

Sun, 02/09/2014 - 10:28 | 4417022 Bendromeda Strain
Bendromeda Strain's picture

It really is very simple - Jew bashers will always cry out "Judefetzen! What have they done to our money", lumping in the innocent with the guilty. But it is the Old Testament itself that had a very clear proscription on anything besides honest weights and measures. This is where it gets real in the midst of a billion metric tons of bovine excrement. When the Creator laid out this mandate, the honest weight and measurement started with the money itself. Metal has a weight and a purity - fiat and bits, what have they?

Sun, 02/09/2014 - 16:09 | 4417704 MeelionDollerBogus
MeelionDollerBogus's picture

hm, I see what you're getting at. A great benefit comes from compression of time/work into a monetary unit but that benefit is 'additional' rather than necessary. So long as equal-value is possible money can be used as a proxy for work/time. Some values can't accurately represent work energy, or work-complexity, or time-consumed, based on the situation. A variable universe/nature/city-life / etc.  can change the translation-mapping of value from work-hours to paid-dollars to saved-time for a particular route or good, or perhaps you choose poorly, pay little but quality is so low you pay 3 times eventually for the one good or service.

The way I see it is if you are producing & someone else is producing, you are a plumber with tools, materials & skills, someone else perhaps is a carpenter, electrician, farmer, you each should be able to produce your own currency units & exchange with each other.

After all, not everyone needs your services right now but if you're a plumber I fuckin' guarantee the day will come and they will not be happy if you have no incentive to show.

Herein lies the problem you are in fact feeling: how can anyone produce a currency who does no work? Solution: those who do no work, have no value, shouldn't, but those as yourself who do, should be unrestricted in doing so except by demand of the markets you deal with, your customers, your suppliers, etc.

That being said I strongly prefer the idea of using PGP signatures / GPG.

After all, if a person can barter, perhaps that person can arrange a deal for time, that perhaps food will be given in barter once it's grown but today it isn't finished growing, as payment for plumbing services, etc., a lot of possibilities exist so I picked just one there for brevity - and a debt in the mean time is formed only out of trust.

IN such a situation if that trust could have been established a signature could also establish repeats for time-lagged payment in both directions & what GPG / PGP does could permit it being remote rather than someone in the middle messing with both of you.

Face-to-face isn't so bad but if a lot of suppliers with their own delays & inventory capacity become an issue that's where a currency removes the time-lag problem by having a deliverable on the spot (IOU note = currency unit) or money serves (silver coin=actual value, paid in full). So rather than a compression of time-work it's more like a proxy for time-work.

By all means if I'm a lousy plumber & you're a great one and I need your services, for ME It's a multiplier of time-work to pay you: not for you, but for me, because the total magnified benefit isn't the currency or your skill, it's how lousy I AM at doing the same work yet I do have the money to pay you, so I will.

It's a bit tricky but think about. If I DO become much better at cooking, you think I'm going to enjoy so many restaurant meals? Maybe none. Maybe I do it all myself & even fancier than what I'd be served, perhaps not in presentation but perhaps in the flavours & quantities for the same time-unit of work. That means spending money at the fancy restaurant or even a decent-valued diner no longer is a compression of time-work, it's now a loss because I have the skills.

It's not the unit of currency alone that decides, it's the real value I have or lack compared to what I can purchase as a proxy.

Sun, 02/09/2014 - 16:02 | 4417678 MeelionDollerBogus
MeelionDollerBogus's picture

close but the concept is actually inverted: that which is tangible & necessary, in a wide variety of goods & services, each establish relative value to each other. Once a currency is tied to them its own volatility can't deviate. When you are trading a financial asset on margin or tying it to other assets on margin that deviation becomes massive as it isn't goods & services being sought. Bitcoin is like this for being tied to fiat currencies on exchanges while THOSE currencies are tied to swaps, margin-leveraged carry trades, etc.

It's a subtle difference but it really matters.

Those who produce tangible goods & needed services do NOT have an obligation to use a currency that is not tangible or a necessity: it's up to them, but IF they do so, stability will be granted upon the currencies selected FROM the wide array of goods & services. It's important it's a diverse array of services & goods because if it was all the same thing the very large recombination of valuations of pairs (range 1 to n, n2 - n) would not exist, or would be very small (e.g. n should be over 1000, probably over 1000000 is good), to enforce this.

Also for various goods that last a fair while but do get a different valuation because of age you then can price in value of so many used goods vs so many new goods of the same time.

Seems silly but when T-Mobile is offering to pay your termination fees for transfering service WITH A TRADE-IN, or when GM is willing to reduce payment on a new car based on valuation of an older car, that valuation of used-vs-new still matters and that vastly increases the potential upper limit for N.

Sun, 02/09/2014 - 00:26 | 4416615 acetinker
acetinker's picture

I'm sorry dude, but anyone who thought "Magic, The Game " was cool is deluded.  When it morphed into a bitcoin exchange, well that's just plain stupid.  BTW, where is that "I'm the King of the world" card I had stashed?  What's it worth?

Sun, 02/09/2014 - 19:55 | 4418323 MeelionDollerBogus
MeelionDollerBogus's picture

MtQOX: home of the quatloo!

Sat, 02/08/2014 - 22:20 | 4416314 john39
john39's picture

but the central bankers are secretly playing the role of Mao this time around...   digital fiat is on their agenda...  we are now in the implementation stage...  and like the intellectuals of Mao's China in the 1950's...  people who should know better are falling for the trap because they so much want to believe that freedom has arrived.

Sat, 02/08/2014 - 22:42 | 4416348 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

That is a very interesting observation.

Clearly freedom in the USA and probably most of the world is down significantly in recent years.  Freedom has not arrived.  The grip by TPTB is strengthening by the day.

Not even going to Costa Rica would help much for most...

http://tinyurl.com/9hlvzdx

***

But, for the alert and nimble who maintain themselves well diversified, that is about the best that can be done.  

Sat, 02/08/2014 - 22:35 | 4416351 fonestar
fonestar's picture

There is no reason to even so much as suspect that central bankers had or have anything to do with Bitcoin and its origins.  Having said that, there is reason to be concerned about Google's envolvement and the self-important "Bitcoin Foundation".

Sat, 02/08/2014 - 22:43 | 4416375 DoChenRollingBearing
DoChenRollingBearing's picture

Yaah, it's all those Canadians and Americans getting in there and mucking things up...

Sat, 02/08/2014 - 22:43 | 4416385 fonestar
fonestar's picture

In the end it doesn't matter.  The combined global hashing power and user base of Bitcoin is what matters.

Sat, 02/08/2014 - 23:54 | 4416570 Prisoners_dilemna
Prisoners_dilemna's picture

Perhaps this short video (7 minutes) by Andreas Antonopoulos can shed some light on this small discussion.

He suggests that Bitcoin will defeat the kleptocracy and thereby save capitalism.

 

Necessity is the mother of invention?? or

"First they laugh, then the fight, then they accept you."

 

On a seperate note, as I watched the video above I couldnt help but ask myself...

"Why can bitcoin do this but gold can not?"

Serious question from a AU/BTC fan.

Sun, 02/09/2014 - 11:22 | 4417072 aminorex
aminorex's picture

in the modern era, transactions are global, not local.  if you try to close a transaction with someone in south africa using gold, you have to place fiduciary trust in a counterparty, and suffer clearing times.  with bitcoin, the transaction is instantaneous, and no mutually trusted chain of counterparties is required.  

 

Sun, 02/09/2014 - 15:10 | 4417533 fonestar
fonestar's picture

....well close enough to instantaneous.  At any rate, a lot faster than waiting for the Wells Fargo wagon to show up with your gold bars ;)

Sun, 02/09/2014 - 20:01 | 4418343 MeelionDollerBogus
MeelionDollerBogus's picture

And how long will it take to receive the goods & services you are paying for? Presuming you are paying for goods and/or services for yourself you have sent money very quickly to get value back which will take a very long time to arrive, isn't that right? Now what was the point of that? The money shouldn't move faster than the goods & services, it encourages fraud. Money parts my hands after the service is done or after the goods are put in front of me & inspected to make sure they are good quality. Never before.

Sun, 02/09/2014 - 20:16 | 4418388 TheHound73
TheHound73's picture

Never paid it forward on a magazine subscription? (BigJuggs perhaps:)

Anyways, even while paying for goods after delivery you'll be paying a good chunk in fees for a bullion transfer.  Even wire transfer costs me $20.  If buyer and seller agree on bitcoin, what's the problem with saving $20 in fees?

Tue, 02/11/2014 - 02:07 | 4422967 MeelionDollerBogus
MeelionDollerBogus's picture

Never.

I don't pay "fees" for bullion transfer, I pay the real bullion price for the real bullion in front of me & vice-versa.

As for "saving $20 in fees" you aren't: you're paying for the transmission infrastructure use on ALL transactions rather than per-transaction because you provide one part of it (computer, phone, router, USB stick) and pay for access to another (fibre optic, wi-fi, etc). And you're paying for all the electricity. I'm betting that you're overpaying quite a lot.

$20 on a wire transfer? Wow. I would never.

Once I bought sunshine mint bars using Interac online. Since the structure for interac fees on my account is a fee per BULK number, and only if I exceed another number per month, I'd pay $1 for that - except I was under - and that means I paid nothing.

Shit, damn. NO wonder you bitcoin tards lose all your money, you can't keep track of anything OR find good deals.

Sat, 02/08/2014 - 22:49 | 4416402 john39
john39's picture

most  corporations and banks are owned by a very small group of people, metaphorically you can call this vroup umbrella corp.  so what does it matter whuch particular subsidiary actually develops bitcoin.  all that really matters is that they maintain control over the system after the dollar dies.

Sat, 02/08/2014 - 21:55 | 4416256 Soul Glow
Soul Glow's picture

Growth phase?

Ha.

Sat, 02/08/2014 - 22:00 | 4416263 OC Sure
OC Sure's picture

I lever my thumb under my index finger, place a solid gold ounce on top, release and laugh out loud as it flips high into the sky glistening in the sun. It lands firmly in the palm of my hand and I drop it in my pocket.

The power goes out!

I reach into my pocket, take out the coin, and flip the coin again.

I like that.

Sat, 02/08/2014 - 22:25 | 4416322 1stepcloser
1stepcloser's picture

so you mean, to be such, we need bitcoin futures and ETFs?  Let me know when I can naked short it!

Sat, 02/08/2014 - 22:15 | 4416295 Bangin7GramRocks
Bangin7GramRocks's picture

Bitcoin is no more of a market than your local bookie or the bank of slot machines at the casino. You can gamble and make money on all three but they are not markets.

Sat, 02/08/2014 - 22:28 | 4416338 fonestar
fonestar's picture

It's fonestar dipshit.

Sun, 02/09/2014 - 11:16 | 4417063 firstdivision
firstdivision's picture

Phonystar wishes he was a pornstar so that he could be paid in fiatstars

Sat, 02/08/2014 - 21:39 | 4416216 Dear Infinity
Sat, 02/08/2014 - 22:44 | 4416389 fonestar
fonestar's picture

Yes.  Bitcoin is here to stay.  Adapt or die.

Sat, 02/08/2014 - 23:04 | 4416437 OC Sure
OC Sure's picture

But it is not in lieu of hard money, precious metals; instead, it is complimentary. It is not meant to be divisive, but liberating.

Sat, 02/08/2014 - 23:09 | 4416452 fonestar
fonestar's picture

Complimentary indeed.  I think gold bugs and sound money advocates should be extremely grateful for Bitcoin as it is now obviously serving as a fiat fear index.  Will Bitcoin be the card played forcing world governments into finding responsibility and religion?

Sat, 02/08/2014 - 23:27 | 4416503 DoChenRollingBearing
DoChenRollingBearing's picture

Some of us are grateful, fonestar.  The future will show us.  We may not have to wait long.

Sat, 02/08/2014 - 23:51 | 4416558 OC Sure
OC Sure's picture

"Will Bitcoin be the card played forcing world governments into finding responsibility and religion?"

Well, by "finding responsibility and religion" you mean to slow or stop the printing presses which in turn is to deprive despots of their sustenance. So, by competitive forces, if people chose to transact by bitcoin, then de facto the dollar (all fiat currencies) become crowded out. This crowding out will force despots into urgency to stomp out the competition. Their iron fist will clentch tighter but only to make their feeding hands get bit that much harder and they will be forced to release this time as they always do. Yes, it is inevitable. The variables are timing and what other cards come into play. Bitcoin may not be THE card but one in a series of cards of a winning hand played by those who champion liberty.

I view the digital currency as another accretive advance of technology within this ongoing Information Age to further enlighten the masses that their Emperors are naked.  

Sat, 02/08/2014 - 23:51 | 4416568 Vint Slugs
Vint Slugs's picture

@fonestar and oc

First of all, the proper word is complementary, with an "e".

Second, fonestar,  if you even contemplate that a virtual currency will force world governments into finding  responsibility and religion, then you are not only economically ignorant but you are also economically naive beyond all measure. 

Btw, for all of your proselytizing  of bitcoin on these pages, thank you so much for giving us an after the fact heads up about Mt.gox ("Mt.Gox needs to just go away now")

Sat, 02/08/2014 - 23:55 | 4416577 Prisoners_dilemna
Prisoners_dilemna's picture

"Second, fonestar,  if you even contemplate that a virtual currency will force world governments into finding  responsibility and religion, then you are not only economically ignorant but you are also economically naive beyond all measure.  "

I believe this is called "ad hominem" and you have been found guilty by a jury of your ZH peers. Say 5 "Satoshi our Savior's" and you will be forgiven.

Sun, 02/09/2014 - 00:55 | 4416696 lordylord
lordylord's picture

Sure he took a jab at the end there, but you should address the first part of the comment.  Why would governments willingly give up so much power?  Bitcoin advocates can't answer that very important question. 

Sun, 02/09/2014 - 01:18 | 4416721 TheHound73
TheHound73's picture

Government fiat will fail due to their own incompetence and corruption.  Is this a controversial prediction?

There will probably be a fight when Bitcoin expands from the 5 million or so worldwide that are currently using it.  I will be curious to see the technical and legal means governments will attempt to ban it.  Bitcoins are intangible, basically precious numbers.  Making it illegal to exchange numbers for goods and services while allowing commodity and barter exchange to remain legal reveal for all to see that the king wears no clothes.  An outright ban is an outright admission that they can't compete.  Furthermore if a ban can't be or isn't enforced, what happens then?

Sun, 02/09/2014 - 09:45 | 4416992 lordylord
lordylord's picture

You're dreaming if you think bitcoin will be some catalyst for change.  Governments will ban its use if it threatens them.  The only return to sound money will be from a currency collapse or economic collaps.  In such a scenario, food, water, medicine, land, and lead will have value.  And yes, silver and gold will be valued as money.  Bitcoin's value will be nothing.  If people see that fiat can fail, they will not flock to a virtual currency even if there is a stable infrastructure to support the internet once/if the collpase happens.  TLDR; If a collapse doesn not happen, governments will ban bitcoin.  If a collapse happens, bitcoin is worthless anyway. Sorry you bought all your bitcoin at >$1000 and now have to do some pumping.

Sun, 02/09/2014 - 13:05 | 4417262 Prisoners_dilemna
Prisoners_dilemna's picture

I disagree Lordy.   Does prohibition ever accomplish the stated goals?

Or merely drive normal acceptable human behavior underground while simultaneously driving the price of the good up?!

Sun, 02/09/2014 - 13:58 | 4417367 lordylord
lordylord's picture

Fine, then bitcoin will be at best an underground currency with very limited utility.  But you are forgetting one very important aspect.  Bitcoin lives on the internet and the internet can easilty be controlled.  You NEED to covert bitcoin to fiat when government bans transactions in it.   I doubt a drugdealer, for example, would want bitcoin when it can't be converted to fiat.

Sun, 02/09/2014 - 15:36 | 4417610 BadLibertarian
BadLibertarian's picture

You are assuming that the Internet won't go p2p, and the grounds for that assumption are eroding.

http://redstone.us.com/2014/01/13/the-beginners-guide-to-redstone-techno...

Sun, 02/09/2014 - 20:20 | 4418397 MeelionDollerBogus
MeelionDollerBogus's picture

a p2p internet for exchanging digital money has lots of weaknesses to snooping, EMP's, microwave to fry the chips, and has no benefit in-person to trade, and a problematic police-state society requires goods be in-person to be accepted so there's no benefit in having the money go too fast or take the long-way around vs hand-to-hand.

Sun, 02/09/2014 - 03:20 | 4416798 TheHound73
TheHound73's picture

 "Btw, for all of your proselytizing  of bitcoin on these pages, thank you so much for giving us an after the fact heads up about Mt.gox ("Mt.Gox needs to just go away now")"

I don't want to put words in fine fonestar's mouth but I seem to recall him warning against Mt.Gox on multiple occasions. I seem to recall him letting y'all know he's a BTC-e and localbitcoins.com kinda guy.

Sun, 02/09/2014 - 00:10 | 4416608 mister33
mister33's picture

I wouldn't call microchip-money complimentary when digital currency purchases don't drain TPTB of their precious... and instead help TPTB keep their precious... If the market cap of bitcoin instead invested in silver and gold coins this whole thing could have already been over... Anyone of TPTB still has the financial and media capacity to destroy digital currencies but instead they are inducing volatility slowly to build a market and grow it. They would probably buy it, regulate it, and use it as a tool to further shackle the distressed people of the world if they could. No... What TPTB do fear are inflationary pressures, the inability to exit QE, rising interest rates, a global debt sell-off, and a public demand for gold and silver as money once again in competition against paper fiat notes (digital fiat notes aren't much better).

JP Morgan Files Patent for Bitcoin-Style Payment System

http://www.ft.com/intl/cms/s/0/e230307a-61c4-11e3-aa02-00144feabdc0.html

"JPMorgan’s proposed system involves creating “virtual cash” that would sit in an online wallet, reminiscent of the computer files that hold Bitcoins on behalf of their users.

The JPMorgan system would also create a public record of transactions made using the technology – a feature that would appear to mirror Bitcoin’s use of “blockchain”, a massive block of code stored across a peer-to-peer network of computers that acts as a public ledger of all Bitcoin transactions."

 

 

Sun, 02/09/2014 - 17:18 | 4417863 Crash Overide
Crash Overide's picture

I find crypto currencies interesting and enjoy the discussion.

If government wants to mess with your gold they have to come take it from you or find the hole you buried it in.

If government wants to mess with your crypto currency, they hack your wallet, an exchange, or disrupt communication methods to access your coins.

 

I know these are generalized statements but it's some of the pros and cons.

Sat, 02/08/2014 - 23:58 | 4416580 OC Sure
OC Sure's picture

@ Vint Slugs:

Edit: Complementary.

Oops! ...Thanks

Sat, 02/08/2014 - 23:58 | 4416564 wee-weed up
wee-weed up's picture

 

 

"Yes.  Bitcoin is here to stay.  Adapt or die."

____________________

Ha! From your lips to TPTB's and their enforcer's (FBI,CIA, DHS, etc.) ears!

Bitcoin is doomed.

And if it does survive...

It will ONLY be because all of the above see profit in it's intense regulation.

Sat, 02/08/2014 - 22:01 | 4416269 Soul Glow
Soul Glow's picture

Oh yeah, also, we are supported by the UN and SWIFT.

- From the website

Sat, 02/08/2014 - 22:07 | 4416282 layman_please
layman_please's picture

"Endorsements from central banks, the European Union and the United Nations" 

yeah sure, some guy out of the blue offers central banks a new universal currency technology?! 

"Having eradicated the significant systematic deficiencies of Bitcoin, then bridged the portfolio limitations of the IMF’s SDR, the new base asset is a proactive response to recent negative public sentiment towards banking in general, and recent global events including The GFC, Euro-Crisis, BASEL II, III, and fiscal & political instability in Prime currencies."


Sat, 02/08/2014 - 22:40 | 4416366 moonstears
moonstears's picture

As per article..."Senate Committee" Bitcoin meeting in NOV mentioned, see WHO was there, not WHAT "coin" it was about, these will be the players when the dust settles, IMO.

Sat, 02/08/2014 - 23:17 | 4416475 fijisailor
fijisailor's picture

I registered.  Unlike BTC this is easy to use.  They just need to add more currencies and they will dominate FX and money transfers.

Sun, 02/09/2014 - 23:29 | 4418825 MeelionDollerBogus
MeelionDollerBogus's picture

like dollars, I won't use this unless forced to at gun-point.

Sat, 02/08/2014 - 21:49 | 4416238 seek
seek's picture

Gox has been fucked since early 2013, when they lost the ability to do more than a handful of wire transfers a day.

If you look at their volume v. the market, they've gone from virutally 100% to 30% or less on weekdays. They're toast.

Sat, 02/08/2014 - 22:14 | 4416265 DoChenRollingBearing
DoChenRollingBearing's picture

The bigger and stronger we can make Bitcoinistan™ (the BTC ecosystem), the better.  To that end, I really would like to see wider acceptance of BTC (slowly happening) as well as other ways for people to get and sell BTC more easily than at present (although https://localbitcoins.com/ has helped in my case).

I have yet to deal with any exchange.  I received, bought and spent (some of) my BTC without them.

Sat, 02/08/2014 - 22:54 | 4416411 disabledvet
disabledvet's picture

I have no idea what you're talking about and i love it.
I think there is no greater constituency for deep sixing the dollar than inside the USA itself....unless of course the USA returns to gold money...which from the global viewership in these here parts might remain an acceptable alternative to the current "regime"...of course you would have to be a Banker of the upmost integrity.

I mean...who would trust a Banker with their gold?
http://www.google.com/imgres?newwindow=1&sa=X&tbm=isch&tbnid=eBLKN2ZtdZq...
that was just a kid...being told by his boss i might add...to "take a picture."

Sure isn't acting like a bailout tycoon.
Here's his preferred look:
http://www.google.com/imgres?newwindow=1&sa=X&biw=1234&bih=518&tbm=isch&...

something not quite right with his eyes.
seems...a little crazy.
"crazy....gold....person." hmmm. just rolls right off the lips.
try trading in that guy's House.
"tap on the shoulder" you say?

losses were acceptable...but only from the best.
Everyone knew what the collateral was back in those days.
Just as obviously NO ONE questioned the value of the dollar either.
That thing was backed by John D Rockefeller, US Steel and the largest coal deposit on earth. Still is basically.

We built huge houses back then..and lived in them.
http://wildwesthistory.blogspot.com/2013/04/mountain-man-maxwell-one-of-...

Sat, 02/08/2014 - 22:14 | 4416297 Yen Cross
Yen Cross's picture

 I've great respect. Implied calculations are diluted. We both know the outcome of this calculation.

  Seek

Sun, 02/09/2014 - 20:22 | 4416405 TheHound73
TheHound73's picture

I have access to Japanese banking and the arbitrage between Mt.Gox and other exchanges has been gravy.  However, I can report that JPY withdrawals out of Mt.Gox since the beginning of 2014 have basically been frozen to a drip.  Their excuse is a 1 week New Years Japanese bank holiday has caused a 2 week delay in fiat transfers... and getting longer and longer.  I currently assume Mt.Gox has gone full Ponzi.

Sun, 02/09/2014 - 04:23 | 4416819 JustUsChickensHere
JustUsChickensHere's picture

Having the US govt steal (sorry freeze) $5M of their customer's money did not help them either.

Sat, 02/08/2014 - 21:54 | 4416248 verbot
verbot's picture

max coin... saw max keiser launch a new coin on his show...

i like max and stacy, they are very fun and smart. crypto monies are still a scarcity model inside what is actually an infinite pool... when are we gonna wake up to that fact? its all just numbers now and therd is no reason anyone should be hungry or get sick and die for lack of numbers....think about it..

Sat, 02/08/2014 - 21:59 | 4416260 Soul Glow
Soul Glow's picture

Max also sold silver coins for profit.  

Disclaimer:  I am the world's greatest silver bull.

Possibly ever.

Buy silver!

Sat, 02/08/2014 - 22:04 | 4416268 DoChenRollingBearing
DoChenRollingBearing's picture

I thought that Max said he was "the world's greatest silver bull."  LOL!

Soul Glow!  I recently have been buying small amounts of "junk silver".

Sat, 02/08/2014 - 22:39 | 4416364 Soul Glow
Soul Glow's picture

Junk is the best.  Only silver bulls will trust it and we will trade it only bewtween ourselves.

Buy silver!

Sat, 02/08/2014 - 23:26 | 4416499 Ness.
Ness.'s picture

In just stopped a guy with a snowplow on his truck and asked him if he'd "help a nigger out" and plow my drive (I've got 3 ft of snow in front of my house). I went inside to grab my wallet.  No cash.  Asked him is he would take a silver coin instead.  The dude just laughed and said he'd be back tomorrow if I was dumb enough to give him silver instead of cash.  

Immediately restored my faith.

 

But he had never heard of BTC.  Funny, that!

 

 

Sat, 02/08/2014 - 23:57 | 4416576 Soul Glow
Soul Glow's picture

Americans Utterly Clueless about Silver [Zero Hedge]

Sun, 02/09/2014 - 00:02 | 4416588 TheHound73
TheHound73's picture

touché

Sun, 02/09/2014 - 04:33 | 4416824 frenzic
frenzic's picture

Americans Utterly Clueless

Sun, 02/09/2014 - 08:54 | 4416958 ILoveDebt
ILoveDebt's picture

Win.

Sun, 02/09/2014 - 23:50 | 4418870 MeelionDollerBogus
MeelionDollerBogus's picture

actually? hm. Perhaps fonestar could comment on junk grade bitcoins.
after all, Fonestar is smart-n-savvy, right?

Mon, 02/10/2014 - 07:38 | 4419310 TheHound73
TheHound73's picture

Bitcoins stuck on Mt.Gox are being traded OTC at 85% to 90% of par!

Sat, 02/08/2014 - 22:21 | 4416312 william114085
william114085's picture

I view him as a bit of a charlatan.  I once noticed a "pay-day loan" advert link on his web-site.  I pointed it out as hypocritical.  He promptly blocked my i.p. address.

Sun, 02/09/2014 - 08:59 | 4416964 tip e. canoe
tip e. canoe's picture

a bit?

you're being much too kind

Sat, 02/08/2014 - 21:59 | 4416259 jbradt
jbradt's picture

MT Gox is a frekin rip off. Anybody that invest money in that fraud of an exchange, can just kiss there money goodbye. They do not pay any withdrawals. What agency do I contact to report there out right crimminal fraud??

Sat, 02/08/2014 - 22:04 | 4416272 Rusty Shorts
Rusty Shorts's picture

Ask these guys, they're missing 2.3 trillion

https://www.youtube.com/watch?v=HW80RrjxBa4

Sat, 02/08/2014 - 22:40 | 4416368 Soul Glow
Soul Glow's picture

I can't access the link but I assume it is Rummy shrugging off the loss of the governments trillions weeks before 9/11.

Sat, 02/08/2014 - 22:07 | 4416275 shitco.in
shitco.in's picture

Gox being insolvent and eventually imploding could be the best thing to happen to the bitcoin ecosystem since the Silk Road shutdown.  Ever since Gox stopped allowing USD withdraws, the most effective way to get fiat out has been in JPY to a Japanese bank.  This led to financial institutions (think: yen carry trade) to perform arbitrage on Gox.  Anyone who has been watching Bitcoin closely has seen the drip bots across Stamp and Gox, the volume these things have done is incredible and is definitely not the work of an average investor.  Gox is insolvent, they are trying to crash the price of BTC by doing what they are doing so that they can hopefully perform some arbitrage of their own (with Gox being lower than other exchanges) and return fiat or BTC to customers because they went to fractional reserve a long time ago. Because the only way out in fiat from Gox was JPY, this led users on the exchange to purchase BTC to trade out, which caused the price to be bid up significantly higher than the other exchanges. 

 

Regardless of all this, it is fairly obvious by looking at the looping sell orders and order books on Gox, that they have been attempting to manipulate the price downwards for quite a while.  The obvious assumption would be because they have been close to insolvency and have been trying to earn back whatever they could.  Once they are officially "dead", the price of BTC should skyrocket.  If you want cheap coins, buy them now because anything less than 5k is probably not going to happen ever again. 

Sat, 02/08/2014 - 22:36 | 4416352 fonestar
fonestar's picture

I'd like them to pack it in and go away at this point.

Sat, 02/08/2014 - 22:49 | 4416400 automaton
automaton's picture

The moment I get a 5K piece of bit junk on my computer is the moment I get EMP'ed.  I'd rather have war nickels and cans of coke.  At least the hill people of Appalachia are willing to exchange the latter for some meth or huffing paint.

Sat, 02/08/2014 - 23:11 | 4416454 shitco.in
shitco.in's picture

Hey, let's not get things wrong.  We stack PM and have plenty of alternate investments as well... but our specialty is crypto. You are going to be in for a surprise :) 

Sat, 02/08/2014 - 23:13 | 4416458 automaton
automaton's picture

Coke=Money in Appalachia.  Ask a hill person what a bitcoin is.  

Sun, 02/09/2014 - 00:46 | 4416683 shitco.in
Sun, 02/09/2014 - 11:54 | 4417134 Metal Minded
Metal Minded's picture

Steve Earle - Oxycontin Blues(2:54)

 

http://www.youtube.com/watch?v=rKjfh7RDp8s

Sun, 02/09/2014 - 08:57 | 4416961 ILoveDebt
ILoveDebt's picture

The better question is why would I be dealing with a hill person in Appalachia?  Did I go hide in the mountains when civilization collapsed?  Prepare for a whole lot of Deliverance type action going on.  

Sun, 02/09/2014 - 23:53 | 4418874 MeelionDollerBogus
MeelionDollerBogus's picture

time to gets tha vasoleeen, tha crossbow an' stop brushin them chompers cuz we don't need teeth where we goin', boyz.

Sat, 02/08/2014 - 23:12 | 4416460 fonestar
fonestar's picture

fonestar spoke to the people of Appalachia and found them very supportive of Bitcoin and excited for its future prospects.

Sat, 02/08/2014 - 23:36 | 4416526 Ness.
Ness.'s picture

Will you offer them a discount on rent if they pay you in bitcoins?

Sun, 02/09/2014 - 00:00 | 4416587 automaton
automaton's picture

I'm sure you did.... I'm sure you did.  Ask a hill person what he'd rather have:  a crate of Mountain Dew or a bitcoin.  Like Detroit, Camden and Stockton, they don't have dollars in Appalachia.  No dollars, no bitcoin.  Coke, Mountain Dew, Dr. Pepper, et al, will go a long way.  

Sun, 02/09/2014 - 11:31 | 4417083 aminorex
aminorex's picture

Bitcoin does not depend on your computer.  You own the bitcoin even if your computer is destroyed or stolen.  Just get a new computer, or better, use your phone.  The phone is temporary.  Bitcoin lasts forever.  It's not like data on your computer.  It's like a theorem of mathematics.

Sun, 02/09/2014 - 23:56 | 4418881 MeelionDollerBogus
MeelionDollerBogus's picture

it's a network operation : all bitcoin transactions stop when networks are blocked from transmitting the blockchain

Sat, 02/08/2014 - 23:32 | 4416516 willwork4food
willwork4food's picture

@ shitco

This is a pretty huge accusation. If true you have hit a home run. However I am confused by your comment:

 Because the only way out in fiat from Gox was JPY, this led users on the exchange to purchase BTC to trade out, which caused the price to be bid up significantly higher than the other exchanges. 

Why would someone purchase BTC to trade out? To what? Why would they take their fiat, buy BTC, then want fiat back?

Sun, 02/09/2014 - 00:09 | 4416605 automaton
automaton's picture

Excellent point.  That's why I don't understand why anyone gives a damn about the price of gold or silver or land (in the desert that I can rent out for rave parties).  People acquire those to unload fiat.  Why run back to it?  On a side note, I do support dogecoin.  It's logo is a shibu inu.  Much better than bitcoin.  I would buy dogecoins before bitcoins.

Sun, 02/09/2014 - 00:40 | 4416672 shitco.in
shitco.in's picture

Because the only way to get fiat out of Gox was through a bank deposit in JPY to a Japanese bank.  SOME people were getting Euro out after long periods of time, and no one was getting USD out.  Basically anyone that wasn't able to get JPY out of Gox was forced to used their (insert fiat here) "money" to purchase BTC and then try to (up until recently successfully) transfer their BTC out.  No one was trying to convert back to fiat (except JPY) because they couldn't get their funds out otherwise.  

 

What would you rather?  Take a 20% hit and get your money, or never see it again? 

Sun, 02/09/2014 - 09:05 | 4416970 ILoveDebt
ILoveDebt's picture

This was pretty much a known fact amongst traders in the BTC community for months.  They finally brought it to light to a slightly larger auidence on coindesk.com recently, but the greater public has no knowledge of how much of a failure Gox has become.  And Shitco.in explained the reasoning below.  Traders there did what they did to get some value out of GOX.  

The price collapse happened this week when they completely stopped allowing BTC to leave the site as well.  I don 't know what the rationale is for this as now nothing can leave the site.  It may just be a general reaction the whole community is having to a relatively large and symbolic Bitcoin exchange apparently dying.  

Sun, 02/09/2014 - 12:54 | 4417244 shitco.in
shitco.in's picture

The thinking is that people will have a better chance of collecting something now in fiat.

1) They are part of a class action lawsuit and receive something once Gox is forced to liquidate its assets

2) Someone might buy their debt for pennies on the dollar in hopes that they will recover more than they paid

Sun, 02/09/2014 - 23:59 | 4418887 MeelionDollerBogus
MeelionDollerBogus's picture

wow:

http://bitcoincharts.com/charts/localbtcUSD#rg60ztgSzm1g10zm2g25zv

high 1300 USD

low 588 USD. Today.

ONE day.

That's all I need to know. A 54.7% loss from top to bottom in 24 hours.

Mon, 02/10/2014 - 00:00 | 4418895 MeelionDollerBogus
MeelionDollerBogus's picture

that's all bitcoin is for. Volatility is far too unstable to purchase goods or services with BTC so BTC is used only as a ponzi-multiplier for fiat. Nothing else. Pure ponzi. Bag-holders are now fucked.
Utter collapse is around the corner - probably next week.

Mon, 02/10/2014 - 00:02 | 4418899 MeelionDollerBogus
MeelionDollerBogus's picture

LOL

inside a year we'll see bitcoin back to 5 DOLLARS.

Sat, 02/08/2014 - 22:09 | 4416287 Prisoners_dilemna
Prisoners_dilemna's picture

"I believe Phase 2 for Bitcoin began in earnest back in November 2013"

Can we not prognosticate in the same way about MtGox?

No doubt mt.gox has been losing market share. I can't argue your excellent graph.

But the market is still so small (3 exchanges) that I can see mtgox making a come back from this.

 

They were early innovators. They got fucked by the US govt for not registering as a money transmitter.

 

I don't use mt Gox but I'm more impressed by what they've done for bitcoin than what this article does.

Mt.Gox is dead. Long live Mt.Gox!

 

Sat, 02/08/2014 - 22:50 | 4416398 Buckaroo Banzai
Buckaroo Banzai's picture

Two words: Osborne Computers.

Sat, 02/08/2014 - 23:20 | 4416482 seek
seek's picture

There are way more than three exchanges. Due to regulatory hassles, however, there's a natural monopoly that develops in highly regulated markets. Outside of those markets, there are many exchanges. (And that's not counting localbitcoins, which can inflate the number to however big you want it.)

Sun, 02/09/2014 - 01:14 | 4416717 PN7
PN7's picture

There are more than 3 exchanges.  This link wil take you the Huobi exchange which I believe is the biggest bitcoin exchange in China.  Click on "Markets" at this site and a list of 13 or 14 markets pops up, and you can check them out.  Coinbase is a good exchange located in San Francisco.  And I believe Kraken is also based in the USA.

http://bitcoinwisdom.com/markets/huobi/btccny

Sat, 02/08/2014 - 22:10 | 4416291 nmewn
nmewn's picture

"What I really want to see is Mt. Gox resolve this issue as soon as possible so that the Bitcoins tied down with them are released and can be freely moved around by their owners."

I have no words to describe the depths that some people will go to find yet another bagholder.

No, yes I do.

His name was fonestar.

Sat, 02/08/2014 - 22:19 | 4416308 Yen Cross
Sat, 02/08/2014 - 23:52 | 4416566 nmewn
nmewn's picture

I'll say it again here:

"Some, these days, prefer the ethereal to the real, for some reason out of habit & convenience I suspect.

Its not for me to judge the rightness or wrongness of their endeavors, as I cannot know whats in their hearts (except for the obvious exceptions like fonestar) in duplicating what they say they abhor.

But I do know, what is real and what is not...and what has been instituted for their convenience."

I-Will-Stand-By-Every-Word.

Sun, 02/09/2014 - 03:04 | 4416792 dark pools of soros
dark pools of soros's picture

again, you are on the internet..  please go back to the old gossip fence ya hypocritical luddite

Sun, 02/09/2014 - 08:27 | 4416940 nmewn
nmewn's picture

Again, you cashed out (some or all) of your BitCoins, enough fiat to live two to three years on if I recall your bragging around here correctly.

I have been consistent on what it is and is not. I have fed no ones hopes & dreams or aspirations of what it could be. I have pointed to the danger it represents as it is encumbered by its very design. I have also commented on its valuable qualities of moving benny bux from point A to Point B but that was all.

You on the other hand, traded them in for benny bux didn't you Soros? That you can stick in your back pocket...you don't need internet to use benny bux Soros...no electronic devices either...no encryption...no electricity. You had no thought of the bagholders in the "BitCoin Community" you were leaving behind and any larger purpose they may or may not have had, no thought of Mt.Gox imploding if everyone did the very same thing as you did, only one thought...I got my benny bux, I got out.

And you dare call me a hypocrite, fuck you.

Sun, 02/09/2014 - 12:40 | 4417207 chemystical
chemystical's picture

+1 and logged in solely to give you that up arrow.

Hypocrite indeed.  The other foney pumper told us a few weeks ago that bitfraud was the "ticket to riches".  For the early buyers ofc it is.  For the bagholders?  Not so much.

Same foney hypocrite gushes about 5 or 6 digiit Btc (in USD per), but as much as admitted he/she/it was full of shit when finally responding (after nearly a dozen challenges) to my question, "Why did you - IN YOUR OWN WORDS - sell some Btc (at $200 USD per) to pay some bills, and then a few months later - AGAIN IN YOUR OWN WORDS - buy some at $800 USD per?"

I asked, "Do you lack credit, lack a pot to piss in such that you'd sell low and buy high, or do you lack the same courage that you berate others for lacking, or are you simply full of shit and having difficulty remembering your lies?   And why the fuck would anyone take financial advice from someone who paid 1600% APR to buy back his own Btc?"

His/her/it's reply?  A single and VERY TELLING sentence: "Fonestar says a lot of things."

Fraud unmasked, and any who follow and defend that false prophet can either denounce him/her/it or declare themselves full of shit as well.  None have.  No apostates amongst the delusional.

Mon, 02/10/2014 - 02:49 | 4419113 MeelionDollerBogus
MeelionDollerBogus's picture

bUt teh b1tcoinz has tha invUlner@blez, fonestar told me so!

Imma sell all my beanie babiez, ALL IN, BITCHEZ

Sun, 02/09/2014 - 12:42 | 4417216 logicalman
logicalman's picture

Luddites were fighting for their livelihoods against bosses who wanted low wage, low skilled people, cutting out those with skills.

Sound familiar?

I think you meant the term to be insulting, and most would take it that way, but I would disagree.

 

 

 

Sat, 02/08/2014 - 22:22 | 4416294 Cabreado
Cabreado's picture

You can't run a cohesive society on alternative currencies.

If you are not interested in a cohesive society, perhaps you are more enthralled with what BTC, et al has to offer you, personally.

If you are more enthralled with what currencies have to offer you, personally,

you might consider that BTC, et al came about for that very same reason; the reckless disregard for the $USD.

Mon, 02/10/2014 - 04:48 | 4419214 MeelionDollerBogus
MeelionDollerBogus's picture

other than the entirety of human history being opposite of what you claim, you're completely right.

BTC isn't the one but various tangibles will do great for barter, including silver, copper, gold & medicine.

Sat, 02/08/2014 - 22:16 | 4416302 Rusty Shorts
Sat, 02/08/2014 - 22:22 | 4416313 bubblemania
bubblemania's picture

Bitcoin could replace common stock, completely bypassing the wall street banksters. It's called colored coins and Reggie Middleton and other in the NYC area are putting a lot of work into this. Imagine having a Company X  bitcoin and using the technology and platform to create shares. Highly disruptive.

Sat, 02/08/2014 - 22:26 | 4416324 Yen Cross
Yen Cross's picture

 That comment just solidifies BTC. Is BTC a "stock certificate"?

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