Mt. Gox Bankrupt bitcoin uncertainty

[Galdorf]

So much for bitcoin i think the US banks had something to do with this just think it was starting to become mainstream many retailers in US were accepting bitcoin all of a sudden then BOOM this happens.
Who looses bitcoin, who gains banks after seeing this happen safest place to invest your money is bank and they will make money from this.

 

[LifelineIT]

Bitcoin isn't going anywhere, neither is any digital currency. Those people using Gox as a "bank" either were ignorant about how to properly store their BTC or they willfully ignored all the protocols. End the end it would be like you sending me your paycheck on good faith that I'd keep it safe for you, and then you buying/selling and updating the bank with snailmail.

 

[nlinecomputers]

Bitcoin isn't going anywhere, neither is any digital currency. Those people using Gox as a "bank" either were ignorant about how to properly store their BTC or they willfully ignored all the protocols. End the end it would be like you sending me your paycheck on good faith that I'd keep it safe for you, and then you buying/selling and updating the bank with snailmail.

I disagree. Bitcoin will not survive this. The average person doesn't understand what BitCoin is which is one reason MtGov was able to store there money in the first place. It has never been and never will be more then a fad. You try to offer me bitcoin and I will tell you to get real money.

 

[Mercenary Roadie]

The banks had nothing to do with it. bitcoin is an unregulated currency (sic) and Mt. Gox stole them outright.

Do you keep hundreds of thousands in your PayPal account? Probably not as it to is an unregulated entity and is know for seizing account for no good reason.

Besides bitcoins didn't have a chance of every becoming mainstream with only a maximum of 21 million bitcoins possible.

 

[smashedbotatos]

The banks had nothing to do with it. bitcoin is an unregulated currency (sic) and Mt. Gox stole them outright.

Do you keep hundreds of thousands in your PayPal account? Probably not as it to is an unregulated entity and is know for seizing account for no good reason.

Besides bitcoins didn't have a chance of every becoming mainstream with only a maximum of 21 million bitcoins possible.

They had a high chance of becoming mainstream. That is why multiple cities aroudn the world had bitcoin ATM machines. Only 21 million? They use fractions of coins. Say a bitcoin is work $600USD then .25 of a bitcoin is worth $150USD. So honestly the amount of money available is actually unlimited since they could use fractions down to the hundred millionth or farther.

Alas that is what happens when the main use of the coin was drugs on Silk Road and Silk Road 2. It can rebound, but it needs a legit medium to be used on.

 

[nlinecomputers]

They have zero chance of going mainstream because it is NOT money. Bitcoin is a classic ponzi scheme as economist Gary North point out here:

http://www.marketoracle.co.uk/Article43356.html

 

[Markverhyden]

The way I see it they had no chance of becoming mainstream because there is a finite amount. Meaning the amount available cannot grow. Economies cannot work with that.

 

[LifelineIT]

Ya'll are funny.

First of all, it doesn't have to go mainstream. It doesn't have to replace currency. In fact its entire purpose is exist OUTSIDE of traditional markets and currency trading methodologies.

Second, to argue that it doesn't have a "basis" is also amusing. What gives the dollar value is nothing more than that it's guaranteed to have "some" value by the USA. It's not based on gold or silver or antimony or anything of the sort, and as we've seen in recent dealings with our Chinese lein holders, we don't have a problem basically reneging on the value. Don't make Marx's mistake and believe that the sum of inputs determines values and pricing---nay, it's the social contract between participants, as well as supply and demand. There will *never* be a time when individuals around the world will no longer have a need for truly anonymous commerce.

Lastly, and what I think a lot of folks don't understand, is that if BTC is traded via the methods it is intended to be traded, it is *dramatically* more secure than even using your charge card, with allowing your bank to handle your withdrawls from your checking out, etc. The very nature of digital currency exchange coupled with the absolutely finite volume of coins available = security.

I think that most of the folks who are saying that this will end BTC or digital currencies in general don't really understand the volumes of cash flying around these markets.

 

[Mercenary Roadie]

Secure??? guess you did read that over 850,000 bitcoins were stolen valued at around $400 million at the time.

This wasn't done by or at some small exchange, but what was considered the biggest and most secure exchange.

 

[nlinecomputers]

In fact its entire purpose is exist OUTSIDE of traditional markets and currency trading methodologies.

IOW It is exists to launder money. That is part of what ponzi schemes do.

Lastly, and what I think a lot of folks don't understand, is that if BTC is traded via the methods it is intended to be traded, it is *dramatically* more secure than even using your charge card, with allowing your bank to handle your withdrawls from your checking out, etc. The very nature of digital currency exchange coupled with the absolutely finite volume of coins available = security.

Bull. All I need is a keylogger and I have got your money. No different then a regular bank in that way, except hey if money gets stolen from my account my bank will return it. Can Bitecoin do that? The only thing that is secure about it is that transactions are untraceable. Which makes it no more secure then cash under your mattress.

 

[LifelineIT]

Again, the victims of that particular exchange were people willing to trade security for speed. The thefts actually happened because Gox basically "trusted" you to only spend your BTC once and operated the transfers without making use of the integrated mechanic for doing so. Much like SR2, I suspect that someone at Gox is in on it, but it was NOT a difficult or elegant attack, and, due to the nature of BTC transfers, the new owners of the BTC are known by ID if not by name...yet.

And no, its not inherently designed to be used for anything. Does PayPal exist to launder money? Prepaid visa cards? Mutual funds?

Oh...and no, if you're using your wallet correctly, a key logger isn't gonna get you anywhere, but even then the argument is a non-starter, as computer based theft accounts for tens of billions of dollars a year in just the US alone, on our so called "secure" system.

Is the recent Target attack going to end target or Visa? Target who actually did something wrong and failed to uphold a legal agreement with its customers? Nerp...and that's a lot more cheddar from a much less savvy group of consumers.

 

[mr m]

. The average person doesn't understand what BitCoin is which is one reason MtGov was able to store there money in the first place.

I don't know if MtGov was a typo or extreme insight on your part. It wouldn't surprise me in the least to learn the NSA was behind this.

 

[nlinecomputers]

Again, the victims of that particular exchange were people willing to trade security for speed. The thefts actually happened because Gox basically "trusted" you to only spend your BTC once and operated the transfers without making use of the integrated mechanic for doing so. Much like SR2, I suspect that someone at Gox is in on it, but it was NOT a difficult or elegant attack, and, due to the nature of BTC transfers, the new owners of the BTC are known by ID if not by name...yet.

And no, its not inherently designed to be used for anything. Does PayPal exist to launder money? Prepaid visa cards? Mutual funds?

Oh...and no, if you're using your wallet correctly, a key logger isn't gonna get you anywhere, but even then the argument is a non-starter, as computer based theft accounts for tens of billions of dollars a year in just the US alone, on our so called "secure" system.

Is the recent Target attack going to end target or Visa? Target who actually did something wrong and failed to uphold a legal agreement with its customers? Nerp...and that's a lot more cheddar from a much less savvy group of consumers.

Strange I didn't lose any money when MY debt card was compromised by Target. Target may have lost money and the bank may have lost money but both are protected by insurance and massive diversification of funds. MtGox went bust.

Paypal is designed to move money. It has no value on it's own. There are no Paypal notes or Paypal coins. It is simply a pipeline nothing more. Bitcoin has a unique if artificial value assigned to the coins. People are investing in it not spending it. Which again says Ponzi scheme. It's value will bust when the security of it is compromised enough and when major criminal players get tracked down. (Because nothing is untraceable on the internet given enough resources.)

 

[LifelineIT]

This is a circular argument that isn't gonna go anywhere, but you've missed my point entirely:

1. MtGox is designed to hold and move money in EXACTLY the same way PayPal is designed to do so. MtGox in and of itself does not create BTC. There are literally dozen if not hundreds of other exchanges that continue to operate just fine.

2. With little exception, if your personally handled investment account was compromised, you'd be poop out of luck--specifically commodity or day-trade, and the argument could be made that BTC is a virtual commodity. Again, it happens every single day, totalling volumes dramatically larger than this. Hell, high-risk losses on marginal-trades amount to dozens of times this loss every year in other unregulated market schemes, and they persist because the potential for profit is so large.

3. I'm telling you that this theft didn't require any NSA-level hacking. Literally MtGox basically operated a courier pigeon service with other peoples money. "Well, I'm gonna go ahead and take this from your account because you're saying that two weeks ago you had this money in our account, and now I'm gonna GIVE you this money from this guy because last we heard he had it but that was a couple weeks ago, now you be a good boy and send him his stuff." And then "Oh...you didn't get your money? Well here, we'll give it to you again." Public exchanges, by and large, go against the spirit and mechanic of BTC trading, which is really evidence that BTC was NOT designed to be a black-market currency because the exchanges basically only "protect" shady deals. That and, of course, the tracking of the ownership of ever BTC forever in the public domain.

 

[nlinecomputers]

Whatever dude. And I will be sitting here laughing at you when the inevitable "bank run" happens. Whenever you have a currency backed by nothing they always eventually crash. And all of those exchanges will be wiped out when they can't meet the demand for real money, you know, Dollars, Euro, gold, something of real value.

 

[LifelineIT]

None of the current first-world currencies are backed by anything other than the shallow promise of a government, that's the same for the dollar as the yen as the yuan as the euro, rinse-repeat. This is why China got so concerned when our economy tanked back in 08, as suddenly the value of our debt decreased DRAMATICALLY as the value of the dollar dropped DRAMATICALLY and what they had were promissory notes...

You have noticed that since Gox the value of btc hasn't particularly changed, right? And you do know that commodity-based investments are considered generally safe but that everyone with a brain has already pulled out of the big one (gold), because that market bubble can't possibly sustain much longer, right?

Nobody ever made the argument that digital currency would replace banknotes any time in the near future, however at this time digital (i.e. unprinted) American dollars are spent at a rate faaaaaaaaaar exceeding the printed numbers as the Fed just punches into one of 7 machines how much money to release that month and then the large banks just sludge it around in their withdrawal accounts. No government is ever going to adopt a currency they can't monitor, either, but that doesn't change the feasibility of the medium.

 

[brandonkick]

I won't pretend to understand a lot about the way the financial systems work, the federal reserve or foreign currencies work. It seems to me though that in theory this would only really work on an extremely small scale.


If you consider its wild fluctuations in value, adding in all of the bad press (Silk Road, Mt. Gox), I just don't see the average person wanting to use it.


I'll also agree that currency isn't "backed" any more. It's a system where enough people believe that a dollar (or any other currency) has some value and are willing to honor that value. BitCoins aren't any different in that respect. Where they are different is the stability and the potential for being stolen.

We live in a world where people can't be bothered to adopt safe browsing habits, can't be bothered to perform security updates, or run/update antivirus programs. Forgetting about the security issues that come from these people not wanting to do the things mentioned above, you know they aren't going to listen to reason when it comes to the safe measures for storing and using their BitCoins.

As a whole, I just don't think that people have that same level of acceptance in that these coins have value like a dollar bill or a yen does.


When I first started college I was seriously going to invest into BitCoins. I had around $500 left out of my tuition refund and was going to slap it in a BitCoin wallet as it seemed like a "cooler version of PayPal". Had I done so, Id have millions and millions of dollars right now as at that time bit coins were worth a very small fraction of a cent. But to see them go from that tiny tiny part of one cent to over $1200 each would raise questions, and I think its enough to make just about everyone skeptical of them.

 

[smashedbotatos]

Something a lot of people are forgetting is that BitCoin wasn't created to replace any currency.

It was created as some what of an intermediate currency to be able float between countries easily. I could send $1200 worth of BitCoin to another country via the internet in a matter of seconds. Not to mention, from home, no Western Union, and no intermediate company that will take a percentage.

The receiving person will get it immediately, and doesn't have to cash it like a travelers check, or western union.

BitCoin won't be going anywhere anytime soon. It may have a tarnished reputation, but there are still a lot of backers. The value of the coins is already going back up. They are also starting to use sub-bitcoin sizes. Like millibitcoin. Since 1 BitCoin is worth $692 USD then 0.001453 BitCoin is $1USD. It is a digital currency and it seems strange, but if you read up on it it makes a lot of sense, and fits perfectly where it is used.

 

[nlinecomputers]

Something a lot of people are forgetting is that BitCoin wasn't created to replace any currency.

It was created as some what of an intermediate currency to be able float between countries easily. I could send $1200 worth of BitCoin to another country via the internet in a matter of seconds. Not to mention, from home, no Western Union, and no intermediate company that will take a percentage.

The receiving person will get it immediately, and doesn't have to cash it like a travelers check, or western union.

BitCoin won't be going anywhere anytime soon. It may have a tarnished reputation, but there are still a lot of backers. The value of the coins is already going back up. They are also starting to use sub-bitcoin sizes. Like millibitcoin. Since 1 BitCoin is worth $692 USD then 0.001453 BitCoin is $1USD. It is a digital currency and it seems strange, but if you read up on it it makes a lot of sense, and fits perfectly where it is used.

Sorry. I call bs. If it was only just a means to send money then it would simply be based in Dollars. Seriously, other then some misguided cool factor, as alluded too above, why would you need to? For example the comment above about not needing to cash it is BS. Few people take this currency. My landlord doesn't, the grocery store don't, not the gas station or ME. Want your PC fixed? You better have US Dollars or you need to find someone else. So if you actually want to spend this money, except for buying Drugs, you have to convert it to real money.

As for using it to beat transfer fees that is only going to last as long as they can continue to avoid taxes. Which is drying up. The IRS is already hitting people with capital gains tax on Bitcoion transfers. And at some point Mining will stop and that too will drive up exchange fees.

 

[smashedbotatos]

Sorry. I call bs. If it was only just a means to send money then it would simply be based in Dollars. Seriously, other then some misguided cool factor, as alluded too above, why would you need to? For example the comment above about not needing to cash it is BS. Few people take this currency. My landlord doesn't, the grocery store don't, not the gas station or ME. Want your PC fixed? You better have US Dollars or you need to find someone else. So if you actually want to spend this money, except for buying Drugs, you have to convert it to real money.

As for using it to beat transfer fees that is only going to last as long as they can continue to avoid taxes. Which is drying up. The IRS is already hitting people with capital gains tax on Bitcoion transfers. And at some point Mining will stop and that too will drive up exchange fees.

You are partially right, but missing the point.