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Mt Gox Files For Bankruptcy After $473 Million In Bitcoins "Disappeared"
For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy. As the WSJ reports, "Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers' bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February."
The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.
"There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble"
So $473 million Bitcoins disappear just like that? But you heard the man - he is sorry. So all is well - and why not: it works for the TBTF banks every day.
What is amazing is that at the time of filing Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million), and just as amazing is that it actually had assets worth ¥3.84 billion.
Elsewhere, prices on the CoinDesk index, which tracks the Bitstamp and BTC-e bitcoin exchanges, fell slightly after the announcement but appeared to stave off a larger drop.
Mr. Karpelès, wearing a gray suit and a blue tie, appeared calm while his lawyer did most of the talking, but he appeared to have difficulty finding words when reporters asked him to send a message to his investors, just repeating his apology.
Computer geeks who were hoping to ride the momentum train to riches, and apparently had never heard of gold, were unhappy:
"It is disappointing they hid so much for so long," said Jonathan Waller, a 30-year-old game developer who said he had had 211 bitcoin in Mt. Gox. "I hope they manage to become a fully-functioning exchange again, but their reputation is so damaged it may not be possible," he said.
Over the past month, customers from as far away as the U.K. and Australia had come to air their complaints outside the company's Tokyo offices. One of them, Londoner Kolin Burges, figured in news photos around the world holding a sign saying, "MT GOX—WHERE IS OUR MONEY."
William Banks, a website developer in Australia, said he lost about 100 bitcoins in Mt. Gox. He had been using the platform since the end of 2012, when he bought some bitcoins at $40 each. Recently, he bought more at about $800 a pop as he became more confident in the virtual currency. He said he has contacted a Japan-based lawyer to look into legal action.
About Mt. Gox's loss of bitcoins, he said, "That seems impossible to me. It's just such an astronomical amount of coins to lose."
Only when redenominated in USD. Remember: BTC is its own currency so why fret? As for the collapse of this latest Ponzi scheme: if things appear too good to be true (wink wink S&P 500), they usually are.
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Well, think about it. He's a young man. Generally speaking, computer programmers live a pretty insulated life, so they tend to be naive about how the world really works. They dream about getting fabulously wealthy for something programming-related, being the next WhatsApp. Basically, the perfect storm for someone who lost $150K investing in bitcoin.
Wow, you figured all that out about him just from hearing that he's a 30 year old man that develops games?
You have a truly deep and mysterious insight into the minds of others. Do you do palm reading too?
He's a nice ordinary guy, know him personally.
BitCoin is as safe, as Obama is honest.
Cowards down arrow what the cannot refute!
Virtually extinct? On a long enough timeline...
the same mysterious forcs that stomped GOLD... just stomped BITCOIN... eh.... the FED
all your coins are belong to **poof**
Maybe it's just coincidence, but does anyone remember the short speculation on reinsurance companies like MunichRe the day(s) before 9/11? Even a few MSM had reported the paths of the transactions lead to Japan and it was looked into - and since then nothing was heard about again.
one thing i still do not understand - why would any serious investor keep his bitcoins online with exchange company and notsend his bitcoins to his personal offline wallet ?
e.g. when i was mining bitcoins with 50BTC.com i was sending all i mined to my personal offline wallet ONCE A WEEK
Apparently the fact that Mt Gox is run by incompetent assholes escaped some idiots' attention for years, and now us Bitcoin supporters are supposed to be running scared and apologetic that Mt Gox is going down.
I don't get it. Ridding the Bitcoin ecosystem of Mt Gox does Bitcoin a favor.
I have some pet rocks for sale....they are the next big thing in alternative currencies....
LMAO
just spell the "fuck" in "bitcoin"
What is really happening here?
To me this is a cultural phenomenon. We are all somhow compelled to abdicate ourselves to 3rd party risks and then beg for government to rescue us.
They steal from us through inflation, price fixing, section 215, estate tax, indebting the unborn, etc. When can it end and how?
Conformity does not discriminate between ideologies and it is difficult to uncloak oneself. Where does our enjoyment of the failure or loss of others come from?
And the slavering hyena's encircle Bitcoin's wounded plea for freedom...
$473 Million In Bitcoins "Disappeared. So stolen (fraud) in the hand of criminals. And any other exchange that allows such coins to be traded: facilitation....
"On December 11, 2012, HSBC, one of the largest banking and financial services institutions in the world, agreed to pay a $1.92 billion settlement to federal and state authorities for charges that they failed to maintain an effective anti-money laundering program. U.S. authorities charged that HSBC had allowed over $200 trillion in wire transfers to enter the United States unmonitored, including $670 billion in wire transfers from Mexico and at least $881 million laundered by Mexican and Columbian drug traffickers. In addition, over $9.4 billion in physical money entered the United States from Mexico unmonitored. Similarly, in 2010, Wachovia agreed to pay $160 million to settle charges that its weak anti-money laundering compliance program enabled more than $373 billion to enter the bank unmonitored as required by law, $110 million of which was shown to be Mexican drug money.1 In both cases, no individuals were criminally prosecuted by the Department of Justice."
I smell a rat.
What we're reading about here is a bank that was robbed; had to close; and now must divvy up what remains amongst all its owners (i.e. bankruptcy). What's the big deal?
Silverstein bought a bunch of white elephant buildings on important property in lower Manhattan. He had them blown up and then robbed the insurance company that carried the risk ... creating a little co-lateral damage and two wars in the process. What's the big deal?
The Pentagon announced the disappearance of what, over a $Trillion? And the next day it gets its record keeping office hit by a jumbo jet, flown like a fighter by a caveman who couldn't land a Cessna leaving a hole like an orthoscopic surgeon? What's the big deal?
Wall Street has one of its many Ponzi schemes go against them prematurely leaving them with lots of worthless paper and needs to make themselves whole. The Fed magically comes up with a TARP to throw over it and then flows $85 Billion of freshly printed green stuff each month to cover their downside (backside). What's the big deal?
One appeal of BitCoin: Nobody was in charge. Well, I guess that appeal still remains but there seem to be issues.
Another appeal of BitCoin: It was an anonymous medium of exchange. That seems to be problematic in the case of theft and counterfeiting.
But wait! How can something with nobody in charge have a "lead developer"? How can something that takes kilowatts of energy to find be lost through simple bad record keeping? How can a multiply replicated ledger not be able to find out what went wrong when the NSA can know what I ordered for lunch at the deli? Oh wait ... that same NSA can't tell me what people were talking about when WTC7 fell down.
I smell a rat!
The Corzine Effect
We tried gold, and they fucked around by inventing fractional reserve banking. We tried paper, and they fucked around by printing unlimited amounts of it. We tried using bitcoins and the mouth breathing fuck with dirty hair and ugly clothes stole hundreds of millions of dollars. It's almost like humans are cunts or something.
"It's almost like humans are cunts or something."
Ya think?
Karpelez's days on this planet are numbered. The only thing that will keep him alive will be a very lengthy prison sentence.
I don't feel so bad that I missed the bitbubble train on its way up. Really glad i won't be a passenger on the way down.
Has anyone whacked Corzine? or Bernanke? or Greenspan? or Dimon? or Blankenfein? etc, etc, etc...........
Am so glad I was too ignorant to even look into trading or buying these coins. Just avoided the entire scene. Now my gold, that I understand.
See what happens to a commoner when they try to act like the Fed and gubermint. Where's the opportunity anymore?
"See what happens to a commoner when they try to act like the Fed and gubermint. Where's the opportunity anymore?"
Yeah, I see. They steal everyone's money........just like the Fed and the government.
The first mistake was trusting an exchange that started by trading Magic the Gathering cards online and named for it. I think I mentioned that three years ago.
The second mistake was trusting people you never met trading money for something that most people knew nothing about. People understood Bitcoin went up in value and bought in, but knew nothing about the inner workings of the system.
Bitcoin ran the classic scam wave. New miracle product with amazing properties that will revolutionize the world. Early adopters and scam artists load up and empty out on the way up during the mania phase. Somewhere near the top reality asserts itself, and poof the money is gone. The early adopters and scam artists are nowhere to be found and people are left chasing bankrupt ghosts.
Remember the hologram bracelet craze of 2010-2011. A company called Power Balance claimed a fake hologram embedded in silicone had the ability to increase your balance, increase your core strength, and regulate the energy flow of your body. They used an old parlor trick balance test on people, that if you didn't know was a trick was very impressive. They got a rather gullible but very well liked celebrity to endorse the product, Shaq, and sold millions of the things. CNBC endorsed the product as product of the year and placed a $3 billion target on the energy band market. Man did the scam artists come out of the woodwork. Within months there were hundreds of energy band companies selling at Mall kiosks, on infomercials, and even pyramid scheme multi level marketing. The problem was that in order to perform the balance test you had to know the product did nothing and the test was a trick. You had to set out to scam people from the beginning.
From the beginning it was a scam. Eventually the scam was outed and a lot of people lost money. Lawsuits were filed and court orders for refunds were made. But instead of justice people got bankrupt companies and executives enjoying the spoils of the scam they pulled.
Even now there are people that still believe the fake hologram bracelet works and people still try to sell them. People say, but the balance test works on me I feel incredible. Even when a guy grabs a pen and says, "Look I'll do the same test with this pen. This is a magic pen and it will immediately balance you." Instead of oh my god I was scammed, I get wow that's amazing can I have that pen.
There is some defect in humans, a gullibility complex, that enables people to be easily scammed. Some innate herd mentality to follow an alpha figure, blank trust. Good when the alpha is an honest figure but horrendous when not. The wolf in sheep's clothing.
If you understand the alpha scam, it is easy to spot, but hard to stop the sheep from following the wolf to his den.
"There is some defect in humans, a gullibility complex, that enables people to be easily scammed."
Completely agree that 80% of the population has this complex to some degree. I think most ZHers fall into the descendants of Diogenes category and are "unnaturally" skeptical.
Possibly the silliest post I've read here today, and that's saying a mouthful. You really haven't the slightest clue about what BTC is and isn't now do you?
But you haven't let a little thing like that get in the way, good for you.
BitDust.
Good time to buy.
I think BitCoin is up like 2,000 percent in the last year (at this point).
$473 million aid package for Ukraine.
Another attempt to discredit Bitcoin. Another failure.
Yawn.....
The Bitcoin Channel
Well said Sir.
Anyone who is familiar with ZH commenters has got to watch the video Krispcritter put together this morning.
It is truly a hilarious parody of this Bitcoin farce and ZH.
https://www.youtube.com/watch?v=Nf_ZhB0WMv0
Now that is one funny video! Hats off to Krispcritter for producing it and to forwardho for the link.
If they ever find those bitcoins, they are also going to find billions of socks and pencils.
I thought you couldn't lose bitcoins. Something about how the awesome technology keeps track of every transaction er somethin.
THat was the main selling point, right?
The real bank analogy to the Mt Gox situation is that someone at Mt Gox went in and stole from the safety deposit boxes. It is a good crime because people don't go check them on a regular basis and if someone does check it and it is empty the institution can play it off as a one time event.
Like I said, the powers that controll the fiat control governments, kill presidents, causes and ends world wars. The solution to this problem is not a virtual one.
One has to wonder if Mr. K now has a few contracts on his head. Placed by some of those underworld players who allegedly used bitcoin to launder money.
Had the same thought.
Drug lords and cartels don't take kindly to being pinched.
What?! No FDIC to back it up?!
What do they say about Love and War?
remember, someone can dig up your tin can too.
If I were the USG or Fed Reserve and wanted to pull the kill switch on a new potential rival to the global fiat USD, I couldn't dream up a better racket than Mt Gox to destroy confidence.
This may spell the end of digital currencies for a long time or at least it'll slow down their progress to a trivial noise level.
Bang on on your first point, a big whiff on your second. After this initial hype meant for dummies, overall confidence in BTC will grow now that Mt. Gox has found it's own level: oblivion.
I'm further away from buying Bitcoins today than I was two weeks ago. Security concerns.
I wouldn't buy them here for lack of funds, not b/c I'm concerned over security
bitcoin will replace dollar as the main currency of the world, the lost of mtgox is nothing, smart btcers will always save their own btc on private wallet
I'd hate to think this article wasn't written in advance.
I heard many investors are going legal against them
Some are going legal against the silver manipulators: www.kingoftherepublic.com
he can always make up shorting gold
Mt. Gox was the bad apple in the BTC universe and I'm glad to see it go. Because Comex is a fraudulent exchange that steals our money with impunity, does that mean gold and silver are? Are they faulty, or is it Comex? No difference here.
So enjoy the day BTC haters but you can expect that it will be around to bug the living shit out of you for the rest of your lives. These folks have always read what they want to read and heard what they want to hear about BTC and probably always will, because most of them don't understand the first thing about it and are threatened by that. They also missed the boat like big dummies when BTC was in the double digits and just want to see it fail. Dream on.
Mt. Gox blaming BTC for its failure is silly, but that's what the haters buy today. I'll be laughing as BTC kicks them in the 'nads again and again as it has over the past 5 years each and every time the haters have it dead and buried. You'd think they'd learn to avoid that, but to each their own I guess.
BTC is here to stay, deal with it. Or not and keep sounding like Luddites and embittered PM owners who like serial kicks in their virtual balls.
gold is so yesterday, unlike btc which is cool and worth more than gold, btc can't be confiscated, unlike gold with fdr
Gold is a fools game.
When I start seeing William Devane hawking it on Fox news, its like when a cop gave me stock tips in 1999 while sitting in a hot tub on vacation.
I don't know whats better these days. But gold will see $900 before it sees $2,000.
Can't be confiscated, just hacked. And I thought each one had some kind of code ? won't we be able to see when they are spent and by whom ?
Fonestar's new theme song...I'm sure he stares at this video all day long from his basement anyways ;-)
Let's Get Physical:
https://www.youtube.com/watch?v=vWz9VN40nCA
This sums it up succinctly:
http://assets.amuniversal.com/cbe65f608154013100c9005056a9545d?width=750
I wonder if this had anything to do with any of those paratrooper bankers lately?
"You fucked up, you trusted us."
Bluto. 1979
well, it wasn't Bluto, but it's still a hilarious clip! Belushi cracks me up...
Flounder is Fonestar and he just found out his Bitcoins have been destroyed ;-)
Animal House: Cheering up Fonestar:
https://www.youtube.com/watch?v=LARx7M9s15w
Those coins will show up unless it was a government backed group that 'stole' them in the first place. Someone will try to spend them or if it was hackers working for or with financial institutions they will show up being used to ramp up or down prices by inflating volume of trades on other exchanges.
Good riddance Empty Gox, Bitcoin will be much better off
We now should expect Mr K to commit Seppuku, right?
Would set a good example for the banksters.
When in rome..
The authorities sure as hell can do the forensics to find those coins in the blockchain and where they went and in turn detective work to link the wallet address(es) to busness(es) or individual(s) if they want to unless they are being instructed to not do so or perpetrated the act in the first place...
The best part is the BTC community and fluffers like fonestar can do the forensics themselves and force the authorities hands on the issue when they drag their feet (and in turn prove or disprove magazines like Forbes are controlled opposition) and turn this into good press and publicity. Ball is in your court as Don Henley used to sing how bad do you want it?
So why hasn't this already been done and publicized?
Doesn't even take Mt Gox to do it, does it?
Cui Bono? Neither side wants to admit it since it undermines boths arguments for and against. Coins never disappear and are easily traceable through wallet addresses in the block chain since ALL transactions are public and not anonymous. They NEVER dissappear from the record only languish in dead ends in some cases aka wallets that are encrypted that no one knows the passes to. The forensics trail is in the block-chain. The anonyminity is in the wallet address. Kinda kills the arguments both sides make about anonymity and for and against now don't it. The FEDS could easily find the wallet addresses then do typical detective work to find out who they belong to if they really wanted to. They have all the tools now and do it in other applications you know like people who set up like 20 shell companies and create all to skirt paying taxes for starters.
Yet another fk tht needs to hang from a lightpost.
The loss of that money was due to global warming.
Don't think so?
Prove it wasn't. If you can't, why, that's proof that it was. All the proof you need.
Because Obama.
Don't worry, boys, I'm sure the cash will turn up somewhere...
At least he was man enough to say he f'ed up. Those filthy fuckers that run the FED and everything else never take the hit. The funny thing is my gold coins seem to be in the same place I left them they didn't disappear. Fake money is another ponzi for the stupid.
//I don't give him credit for that, since they had been losing customers coins for potentially years, and right up until they declared bankruptcy, didn't comminicate any issues to customers, and tried to pretend everything was fine.
There are fundamental problems with bitcoin, but if you live in the third world and don't have access to credit or wire transfers or SEPA or a bullion dealer, bitcoin can be a way out. (unless you chose Gox in which case it was a dead end) But Mt. Gox is not equal to bitcoin.
It looks like MtGox NEVER EVER checked that the balance of bitcoin in their accounting system matched the amount of bitcoin they had in their possession.
It is a simple and basic requirement of management of a company to periodically check that the balances add up, and corresponds to the actual assets and liabilities.
I hope that Japanese law has the concept of "criminally negligent". And if they had an external auditor, that auditor ought to loose his license.
OK, time to show my ignorance, but can someone please explain to me how you can go about stealing someone else's zeros and ones?
And to answer this sarcastic quip
Only when redenominated in USD. Remember: BTC is its own currency so why fret?
If vendors take it without converting to state issued currency for goods and services even if it is a limited amount at the moment, yes it most certainly is since currency is nothing more than some medium based on a HUMAN REPRESENTATION OF VALUE used in facilitation of trade of goods and services BETWEEN HUMANS. It takes whatever fucking form the 2 parties are willing agree upon to use as currency.
Out of this $473,000,000 - how much actual cash was ever put into (these) bitcoins?
I'm just saying, the actual cash losses here might be closer to $1,000,000.
Or $0.
exactly...that's what I was thinking. You can't go by whatever the value is today, because these aren't "real" anyway. I can see how the losers of BTC's can say they lost however much in fiat that they originally "invested" whenever they transferred funds for however much in BTC. But most of them probabaly got in really early and so the losses in true dollar terms traded for BTC would be a whole lot lower than today's BTC so-called dollar "value".
How can they even really say they're worth 473 million anyway? Why would the crypto folks care what the value their BTC's are in terms of fiat dollars or any other paper currency?
Wasn't the whole point of the crypto shit to get away from fiat paper outside the central banking system? Why don't they find some other way to value their BTC's? As in maybe they lost X amount of ounces of silver or X amount of ounces of gold.
Why value it in terms of dollars when cryptos are anti-dollars in the first place? Seems hypocritical to me.
depends if you account for "mining equip" capex and ops (time + energy bill) and include this cost. Physical metals price certainly are not accounted for based on cash purchase price.
You mention something that I think is very important for the price of bitcoin, and is often overlooked because the concept is hard to understand: Mining.
Bitcoin mining is the process that creates bitcoin, and at the same time the process that validates bitcoin transactions. Anybody can mine bitcoin - you just need some hardware and the energy this hardware needs to run. To protect against too many bitcoin being mined there is a mining difficulty that is periodically adjusted to ensure that the amount of bitcoin mined is constant (except for the other rules of Bitcoin that ensures less and less bitcoin is mined until the limit of 21 million is reached).
Because of this basic economics tells us there is not a lot of money to be made from mining bitcoin: If bitcoin can be sold at a higher price than the expense of mining it more mining will be done, until the profit from mining is marginal.
But the capital expenditure for bitcoin mining hardware is large, as specialized hardware is needed today for efficient (read: protitable) mining. Miners who invested in mining hardware will continue mining even at a slight loss, to get at least some of their initial investment back.
But the miners are paid in bitcoin, which (at least the bitcoin people think) is a form of currency. So instead of converting the bitcoin into fiat the miners mining at a loss tend to only sell enough bitcoin to cover their energy costs, and hold on to the rest, hoping that the price of bitcoin will rise more.
And this, I think, is the main reason for the large rise in the price of bitcoin last year: Miners saw a relatively low mining difficulty, compared to now. And they saw new mining hardware coming into the market that would make mining magnitudes more efficient. So they invested a lot in this new mining hardware. But as everybody began using the new hardware the mining difficulty increased.
Less supply of fresh bitcoin from miners combined with a lot of media attention luring new mostly inexperienced "wanna get rich now" "investors" into the market is IMHO what caused the price of bitcoin to rise to be the same as an ounce of gold.
Problems with Mt. Gox are not problems with bitcoin technology. The failure of Mt. Gox is the free market at work. Mt. Gox was incompetent, and the people who had money in Gox lost money because they chose to entrust their bitcoins to a company that was at best incompetant and at worse criminal. It is GOOD for bitcoin that Mt. Gox failed. Although for people who got screwed by Mt. Gox, this will be little consolation.
The problem with bitcoin is that while I agree with the evangalists that the bitcoin network and technology is valuable, if bitcoin wasn't accepted as a currency, people wouldn't value it. If people don't accept gold or silver as a currency (which a lot of places don't, if you don't believe me just try to pay for your gas at Shell with silver), people still value it. So yes, bitcoin can be subjectively valued the same way fiat can, and bitcoin has the advantage over fiat of not being centrally controlled (which is still somewhat debatable, if the bitcoin foundation decides on a change, miners and the bitcoin community implement the change) plus "Satoshi" and now the FBI (via silkroad) hold a huge percentage of the coins, which they could try to use to manipulate the market.
Another problem with bitcoins, is that even though for the bitcoin protocol, only 21 million coins will ever exist, there are dozens of "altcoins" such as litecoin, namecoin, etc, that are indistiguishable from bitcoin to the average user, the only disadvantage they have is the number of adopters is lower. So once bitcoin increases in value, that increases the incentive for people to "invest" in one of the various altcoins.
So in my opinion the Mt. Gox failure is good (free market at work) for bitcoin long term. Short term a lot of people associate Mt. Gox=Bitcoin, when it isn't, and a lot of PR damage has been done, but the free market, if allowed to work, results in a stronger system.
Brother you're making WAY too much sense for this crowd :-)
You are right, pretend money is what everyone should invest in!
...
unless you can pay slave wages (a.k.a. taxes ) with it , or hide it under your kids sock drawer, then it must be pretend ? what a maroon
Keep believing you idiot. That will be your downfall.
//That's funny, I'm way, way, way up on BTC even after this noise. Even after any more to come, I'll still be. Yeah, I'm THAT kind of idiot, as opposed to your kind who has Zero clue about what BTC is or isn't, or even how BTC doesn't = Mt. Gox.
You need to be concerned with your own downfall, like how you foolishly missed the boat while BTC was still valued in double digits.
You GoxSuckers crack me up.......
Physical gold and silver = money. No counterparty risk. All else = substitute money.
A return to the "gold standard," such as we had in the early 20th century would solve nothing as that was still a Fractional Reserve banking system. This is what caused the boom and bust cycle which is inherent to ANY fractional reserve system. Over-extension of credit = boom followed naturally by credit contraction when people get uncomfortable and start trading their substitute money for the real thing = bust. An unavoidable consequence or fractional reserve banking and a means by which banks convert fictional money (substitute money created in excess of reserves) into hard assets through foreclosure.
Now we have FICTIONAL Reserve Banking. 10% reserves? 10% of what? More paper? More zeros added to their accounts at the Fed?
Electronic currencies lend themselves to all the same risks as fiat currencies. Counter-party risk, no stable or intrinsic value, and (as Mt. Gox shows), apparently easy electronic theft.
This is what happened to people in the thirties that had money in banks that had over-extended themselves. This led to the FDIC and a host of other evils. The people demanded their bank deposits be backstopped by the govt. People don't change enough to change this pattern. Electronic currencies can be manipulated at will by TPTB, as can the paper price of gold and silver, but they can't turn gold into lead.
Good and valid points.
IMHO the main reason for the large losses at MtGox were that a lot of gullible people thought their bitcoin was more safe in MtGox than in their own hands. They were using MtGox as a bank - a bank with no deposit insurance, who has not ever published an external audit report. Stupid!
Bitcoin was designed as an almost trustless currency. If you have bitcoin in your own possession (instead of just a claim on bitcoin) you only have to trust that at least 50% of the miners are honest. And if the miners are not honest the investment they made for specialised mining hardware is lost.
Who here thinks an unallocated gold account in a bullion bank is more safe than gold in your own possession? Please rise your hands.
If this turns out the way I hope, the free market forces will work, and the bitcoin community will learn they have to demand more proof from exchanges that the client funds of the exchanges is really there. And take delivery instead of using whatever form of bank.
No need for more regulation or a bitcoin-FDIC (FDIC is really a fraud anyway, as it cannot handle a systemic collapse).
Ceiling cat haz ur Bitcoinz.
Trades them for cheezeburgerz.
This puke better hope that he made a large donation to Obongo's campaign... or he is in deep shit...
I checked and my gold and silver is still where I left it. Whew...
It's kinda like Schrodinger never even having a fucking cat to start with.
No no, we call that the New Thought movement... Just wish for something long enough, sending out positive vibes, and it will materialize. It's true... Just watch The Secret.
/sarc
I remember reading about this great investment called the South Sea Company... Some say it's a bubble, like that Dutch tulip fiasco, but I don't believe them.
This is what happens when the jews of wall street get involved
I want to see what Francis Sawyer would say regarding this.
Gold Pitchezzzzzz
DEAD MAN WALKING.....AND APOLOGIZING.
He may be killed, though I do not hope so.
But they had more than a million customers, many of whom have lost all their life savings hoping they could get rich quick, some probably wanting to kill him. And some of the people in bitcoin are shady and may not hesitate to hire a hitman.
I hope he gets his rightful punishment from a court of law: Prison for criminal negligence. Or longer prison time in case he was deeper involved in this fraud.
Were there any Mt Gox accounts that were NOT cleared out to the nearest femtocoin?
I just loved their initial announcements, "er, technical problem, folks, be right back, don't worry NO COINS WERE STOLEN".
Y'know, what this means is that nobody at the place was even monitoring activity. Yeah mutable transactions or whatever, but they didn't even run daily totals? Friggin' geeks.
Exactly. Just like Corzine not knowing anything. Every company I have worked for in the last 30 years has daily dashboards showing a variety of data. And 30 years ago daily reports weren't easy to get and could be a day behind but someone was looking at them every day. So Mt Gox wasn't tracking the number of accounts, number of transactions, totals transacted, and totals on deposit????? Unpossible.
I am rather pleased with myself that I didn't fall for tulip bulb mania 2013
foneystar, you are doing absolutely nothing to convince me that BTC is legit. You are actually doing the opposite. Thank you.
He should have "printed" some more.
Don't need to print anything, my Bernie Madoff statement shows that I am a trillionaire.
"Don't need to print anything, my Bernie Madoff statement shows that I am a trillionaire."
Better check your “Cozine statement.”
Oh, and the IRS doesn't care. They still want their pounds of flesh from your “Bernie Madoff statement”--"That will be $300bil. plus penalties and interest." Better take that PT job at BK.
"The Nazi/SS concentration camps were really direct tax camps of one’s labor."
Mount Gox = Pet Rox ....Why not just Mount Cox?
Either way, you are fucked......stupid people never learn.....there is no such thing as a free lunch....unless you are an illegal alien or an Obama voter....
Gox, aka 'Gocks' are ugly sock hand puppets meme for the uber dweeby.
Now use 'Mount' as a verb.
Mount Gocks.
Why anyone put actual money into anything near these guys is beyond me...
Lets hope Yahoo Mail Servers never crash and close down causing millions in associated losses from lost emails. Because this would be the end of all email technology of course.
BitCoin exchange crashes / hacked / bad business / etc. -- files for bankruptcy. Sounds like free market capitalism to me.
Global Banks risk/crash/ bad business/etc... -- claim some voodoo TBTF/TBTJ psychosis economic disaster and get governments to bail them out at the cost of the tax slave public. Sounds like Plutocracy to me.
But when your stuck in a paradigm of make beleive fiat credit and central banks, I guess the former makes more sense to you. After all strippers and local neighborhood coke dealers take cash, not Bitcoin. Just #AskJPM.
EXCHANGES do not have a POSITION in their market. They CLEAR transactions. That's it.
The NSA hacked and destroyed (and possibly created) these coins.
Can't have any FOMC competition.
Shocking. Im shocked. Just blown away. Cant believe it. How could this happen. Whats the explanation???
The Mt Crap bk? Hell no, I'm talking about YOUR IDIOCY
Seriously, that ceo looks like he takes it in the gox.
The only reason why the other exchanges aren't crashing or going BK (yet) is probably because the majority of BTC holders got in at higher valuations and they're not sweating the drop. They're not cashing out as they're hoping for a pop. That pop will likely never happen and BTC's valuation will grind down and down and down back to a level where the concept attracts new players and confidence has been restored.
The hype was pretty bad, worse than that dreadful FB IPO. Without massive support from the underwriters, FB stock would have died just like that. The underwriters have the muscle on Wall Street to pull this off. Unless BTC attracts some muscle, it has nowhere to go but down once account holders see that there's no FIAT armageddon and their BTC valuations keep going down. The window to redeem BTC for anything else is closing imo. Too much talk now about the corruption and manipulation. Fed will act in some form. Truth is that many countries already issued restrictions on all forms of BTC transactions.
What's the point talking about it anymore? It's done, it has no backing and it never had any backing. Get over it, folks. The USD, EUR or GBP you access in you online bank account is just as much digital or crypto as any of the so called "crypto currencies". At least the USD, EUR and GBP are backed by your bank and the central bank. Nothing to brag about but still 100% better than any bogus BTC exchange out there.
See, the trouble with Mt. Gox is that it exchanged Dollars for BTC and when valuations spiked (that alone may have been a stealth attack by the CBs FYI), the exchange couldn't deliver the cash to pay out their account holders. Gox is worse than Lehman. At least after Lehman the CBs printed to cover all and any further losses. Gox has nobody able to print anything and neither do any of the other bogus exchanges.
It doesn't matter how rare BTCs supposedly are when it cannot be converted into anything a person needs to survive on a daily basis. Certain crap is rare but aside from a few nerds or collectors, nobody is willing to accept it and exchange it for something real.
Looks to me like MtGox was operating like a fractional reserve bank. They vere supposed to hold their client funds on a non-fractional basis. But somebody figured out how to steal bitcoin from them, and they hoped they could recover the losses from their revenue. But the price of bitcoin raised, making it even harder to recover.
SHTF for MtGox.Their problem, and unfortunately also a problem for many other. But no major problem. With a bit of luck the market will decide instead of the state trying to impose a lot of new regulations.
The feds seized a bunch of btc last year, they probably liberated these as well. They have the best hackers working for them.
http://www.huffingtonpost.com/2011/08/08/government-recruits-hackers-cyb...
Metaphysical/physics question-o'-the day:
What weighs more an empty bitcoin wallet or one holding $10,000 worth?
It is more interesting when a magic trick makes a blonde appear!
reference: "Any sufficiently advanced technology is indistinguishable from magic." — Arthur C. Clarke ....
That must be what a bitch-slap feels like.
Why can't we have it both ways: Bitcoin+goldcoin= Bitgold crypto currency back by yours truly gold and silver... Let peace be upon ZHers.
FED in every single country will be coming for my head now that I have given out this idea. I officially patent and trademarked the Bitgold name and my exchange is officially open with 200g gold 999.99 pure= 10000 Bitgold. There will be conversion charge of 3% for fiat currency to my Bitgold but free transaction.
Open for business, any takers now?
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