Bitcoin Forum

Its official.

Wall Street Journal ‏@WSJ  12m
Breaking: Mt. Gox has filed for bankruptcy protection, a company lawyer says. http://wsj.com

https://twitter.com/WSJ
http://europe.wsj.com/home-page

http://www.reuters.com/article/2014/02/28/bitcoin-mtgox-bankruptcy-idUST9N0JX03O20140228

http://online.wsj.com/news/articles/SB10001424052702303801304579410010379087576
http://www.reuters.com/article/2014/02/28/bitcoin-mtgox-bankruptcy-idUST9N0JX03O20140228

Finally, MT.Gox is dead. RIP !

On the one hand,I will be missing my 25 Goxcoin , but on the other hand I am happy that it's over

Bitcoin might not be dead, but until they figure out a permanent solution to prevent exchanges from dropping like flies, I'd say Bitcoin is in a deep coma.

Corrected

That is something I have been wondering with all the bitcoin ATMs that have been deployed around the world. How many of them are dependent on the bitcoin exchanges such as Bitstamp or BTC-e? If another occurrence of an exchange shutting down locks away the money and bitcoins ATM owners have on the exchange what do they do?       

Finally the bullish news I have been waiting for.

Do you expect to see something of a panic dip based on this news, or has the market already priced this in?

So lets see, the total amount of bitcoins just shrunk.

We had 12 million + 750k (gox)coins just a few moments back. so a total supply of 13 million BTC.


Now it's back to 12 million.

+1

Well, shit.

My $.02.

;)

It was not 100% certain earlier, so it could not have been fully priced in. The news might be providing just the little nudge that the chart needed to trigger the correction we've been waiting for. It's one of those circumstances where the 'market was waiting for an excuse' to do something.

So what does this mean? How many coins do they owe to people and how many are left?
"...Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million)"

The bigger question is? Is this good or bad news - regarding to the price?

I do not think Mtgox is going to remotely want to deal with returning customers bitcoins back anymore. If they are going to reach a settlement/claim process it is all going to be through yen/dollars.

+1

There are a ton of investors waiting on the sidelines and all they want is some closure to this ongoing drama and for the bottom to be found and the worst priced in before they buy. So any end to the mtgox ordeal is bullish. There may be a short term downwards movement due to panic but ultimately upwards.

I think those who will stay on board through all this, will find kind of pride after years if we succeed( or feel very dumb in we crumble )

Disagree whoever or whatever has those R750k coins are using or will use them.  Unless they truly lost the private keys in some way.  Even the coins still in MtGox if any will have to be used. 

I've only been around since 5 December and I already feel like I've been through the wars.  

If the coins are truly in Mt Gox then they aren't hitting the market for a couple years.

After a tough war there is usually a long, prosperous peace.

You don't understand it.

choo choo

How about guaranteed bail-outs from the Fed like they do with the banks?

Get used to it. Bad companies fail in free markets. It's a feature not a bug.

no matter if coins are lost or stolen they were counted twice  at least in market perception , what good about it this is bitcoin  such miracles can't last forever, in oposition to "normal" financial world

Exactly!

CCMF.
We will go lower, very low!

Do you really believe that BTC-e and Stamp can cover all BTC withdrawals? They don't have enough coins. Same shit like GOX. The whole centralized exchanges are a BIG problem for bitcoin.

Branson I'm beginning to suspect that you are one of the GCHQ spy-trolls we have been reading about in the papers recently.

Who are these 'ton of investors'? Joe Sixpack turned on the news and thinks Bitcoin is dead. Any financial institution worth a damn won't touch Bitcoin with a 10 foot pole long after the dust has settled. Any present or future business that accepts Bitcoin is a net seller of Bitcoins, so count those out. Emerging markets are already painting it as an elaborate ponzi and in some cases banning it. There is still a ton of stolen coins waiting to be dumped.

The taint of this news will not be washed by some Reddit headline of a donut shop down the street accepting BTC. As far as the mainstream perception goes, Bitcoin has a crapton of PR to do until it can shakeoff this colossal fuckup - the fact that some stupid CEO is actually responsible for it has little meaning outside of the in-the-know folks who are already a part of the Bitcoin community.

I ask you again, who are these 'ton of investors' you speak of?

agree that is bad time
now we need breakthrough in services segment to  overcome bad mood. Something new and innovative ( what average joe will like ), but not next burger shop

Hm, what do you think about Gox or someone who would eventually buying them offering settlement for fiat value of bitcoins they owe at the last price traded at Gox?

I never thought about exactly how the long-term bear market predicted by a few could happen - I just thought "rubbish!" - but what has just happened could well mark the unwinding of a whole lot of stuff going back several years.

Right or wrong "malleability", "laundering", "hacking", "Silk Road", etc. are going to be on many political agendas when it comes to digital currencies in 2014: a new kind of choo choo about to leave the station - massive negative propaganda. But I can see this also possibly being countered by major efforts at positive news by businesses and investors. Also battles behind the scenes that we only become half aware of.

One  thing that would help a little: the Bitcoin richlist should immediately stop putting the mix of positive spin and anti-regulation banter at the end of each and every Gox article they write these days. Just commiserate with the people for a week or two - it looks better and has a more human touch than the libertarian "it was your choice so let's move on" cold shoulder I'm amazed to see coming from many of the bigwigs.

For what it's worth I for one will not be blaming Bitcoin for my own stupid loss at Gox.

No massive panic in the markets. As I expected, the market has already priced in gox' demise.  :D

If I had a Bitcoin for every Joe Asshole who said Bitcoin is dead in last few years I'd bailout MtGox without a single problem today  ;D

Mainstream media didn't pick up the story yet.
More FUD will start within 24 hours.

There is no such thing as bad publicity.

Price will crash in a few hours

You still hope for $250? Sorry mate, not gonna happen.

- Every bear and bull who has sold and is waiting to rebuy.
- The ridiculously overextended short interest on bitfinex.
- Second Market
- Anyone who has become aware of bitcoin in the past 3 months but has been waiting for the boom, bust, and reversal to complete before buying in.
- My followers, who I have had on call about this. They are waiting with large sums of fiat.
- The insane buyers on Bitstamp who drove it up from 400 to 600 and put tons of fiat on the order book.
- The bitcoin bank in cyprus just opened.
- People who will start buying into the new ATM machines
- Any banker or wealthy person who has become aware and is waiting to take a gamble at this when the time is right.
- [ill let some bulls continue this list her, because im actually waiting to rebuy myself, so i wont put too much eeffort]

Screw what Joe Sixpack and Mainstread Media think. They are the ultimate contrarian indicator. Dont you get it? When public sentiment is low is the BEST time to buy. I want to buy low BEFORE public sentiment is good. Once public sentiment is good, prices will be driven up astronomically, and it will soon be time to SELL, not buy.
 
Eventually regulated exchanges in the United States which function like stock markets will be launched. When that happens, people will forget all about mtgox and those will be seen as bitcoin's kindergarten days, before the price blasts into space.

Noooo, he doesn't, bitcoin is dead as investment  :D

Good point TERA, but we didn't see the bottom yet.
You can buy now, the price is ok, but you probably can get two times the bitcoins in a few days with the same fiat.

$100 on BTCE two weeks ago not good enough for you?

Wow, I think this is the most bullish i've seen you.
Also a new exchange in Hong Kong opened up today:
https://fbcdn-sphotos-e-a.akamaihd.net/hphotos-ak-ash3/t1/1779330_606715982742010_1853333762_n.jpg

Hint: I like to play devil's advocate. I will argue agaist anything I think is irrational, whether it is bearish or bullish. It just so happens there are the most irrational bull arguments to argue against when the market is high and the most irrational bear arguments to argue against when the market is low.

Lasted for all of a few minutes. And people with orders on the way down didn't get them filled. Doesn't count. No, seriously, it doesn't.

Sub-300 prices. Don't be absurd.

What happened to the buy low sell high strategy?

TERA is pointing out that now/near future will be a great buy in time because this will most likely be the time we'll reach a bottom before the next upswing

I marked the three groups, who I see as big buyers.
And I want to sum it up:
- people with money and sense for speculation (and maybe know how), who heard about Bitcoin the first time when the price was above 1000$ and the saw it as overpriced. Now they studied the last booms and waiting for the turning point. So a few days in a row with 5%+ would be such an indicator. And maybe they are waiting for high speed exchanges!

About time to get closure
The uncertainty has been spooking the market

This can be a valid point. Let's assume with every bad news 1000 new people hear of Bitcoin. 95% think, Bitcoin is stupid. 50 think, it is great and want to buy.
-> It does not really matter when the people, who never liked Bitcoin still don't like it with bad news and if new people don't like it. But there will always be people who like it. Just mention all the time "7500% gain in value in one year" and people start reading ;D

The problem is this news affects the fence sitters, who'll be turned off.  It also gives the regulators an excellent excuse to regulate bitcoin out of existence -- "Look, it's nothing but scammers and suckers."

As a bitcoin convert, *I* am not chomping at the bit to buy right now.  Look at the charts and tell me I'm wrong.

Bitcoin can't be killed by regulators. By design. For starters, it's global. No single country can makes rules for it, and global cooperation is not going to happen. Then there is the fact that it can't be killed. The tech is out there, all they can do is make it illegal which is not going to hurt the price. Which is why they won't do that either.

False. illegalization will kill most of the demand. Most bitcoiners are hobbyists and investors who will listen to their government rather than risking going to jail, and most people are not anarcho-libertarians.

You should explain this to companies like NeoBee and every business accepting bitcoins.

That`s may Impression since you started arguing bullish.
But it is ok as one can reconsider one`s own arguments

+1  Also, Bitcoin can be killed by scammers, thieves and  the negative media reporting FUD that goes along with it.  We are seeing this to some extent now.  :(

I have two major issues with Bitcoin being something that anyone would want to invest into at these prices:

1) The price has not gone down nearly enough given the recent light of events. The most well known Bitcoin exchange being now synonymous with one of the biggest financial thefts/losses in history is one step shy of the worst possible news that could happen - which is some flaw in the Bitcoin software itself.

2) Not only has Bitcoin's acceptance/breakthrough efforts have been set back significantly but the risk factor has also increased - who knows what will come of this development and the repercussions that governing agencies and others might impose. Such uncertainty, whether anything becomes of it, is still a factor that should weigh on the price because at a moment's notice some FUD could be created out of thin air relating to this situation and drive prices lower, which would be reasonable given the amount of fear in the air.

TLDR: Bitcoin price is still way too high given the calamity of the situation, the new risks now attached, and no foreseeable development in the near term that could entice investors to not 'miss the train'. Investing at these prices, IMHO, is pretty stupid.

Prohibition. Most drinkers were hobbyholics, not hardened gangsters. Which is why everyone stopped drinking and the price dropped.

Only reason people pay lip service to the law is because we are threatened with jail if we don't. It is very easy to use bitcoin anonymously for those so inclined, and there will always be somewhere in the world where using them is fully legal for those not adverse to relocating. Imagine, living like a king somewhere in SE asia because people in other countries are making you rich by breaking the law. However things go, the next years will be fascinating.

Apples != oranges.  If bitcoin is booze, so is fiat.  Only fiat is legal booze.  Your analogy would be accurate if the prohibition banned gin, while everything else -- vodka, whiskey, saki, etc., remained legal.  If during such prohibition a thriving gin industry emerged, you'd have a point...

Actually, black markets exist for US dollars in countries that have banned them. So yeah, we are both talking apples. Or oranges if you prefer, Oranges are cool people with me.

I don't fear fuds or regulators directly, what I fear immensely is that they may scared  away miners. With current  difficulty level it may be death spiral( huge difficulty against low hash rate ). To stop this core developers may be forced to hard fork. This may be the end of fireworks for long time..
But I see also light in the tunnel, but I am obliged to stay silent about that at least temporarily 

If you wish to suggest that (black market $ volume) > (legitimate market $ value), I'm afraid I got nothing :D

haha welcome to the world of bitcoins

That's really quite irrelevant in this case. The value of black market dollars are higher than legal dollar markets. It will be the same with bitcoin if some countries ban it.

That's not how mining works. If difficulty drops people with currently outdated equipment will get back into the game. The keyword is equilibrium. There is no such thing as too high or too low hashrate.

You are forgetting that price is directly influenced by demand.  If 99.9% of demand (all but those few backwater countries) vanishes, the price plummets.  Even on those black markets.

Don't worry.  Megafarms have no choice but to keep mining as long as (data center cost) < (price of the coin mined).  Even hobby miners have preordered gear that is yet to arrive at their door.
Mining ain't stopping any time soon.

Pro tip: Prices are only where they are at because people like you can have an immense fear and make rationalizations about why prices should be at these levels or lower. If the market thought that these prices were reasonable, they would not be here; they would be higher.

^The market does not react spontaneously, otherwise stuff like trading and arbitrage would be impossible.  It's adjusting as we speak :(
http://s3.postimg.org/9v43w9fsj/Capture.jpg

It's a temporal world.  Change/time.

Not forgetting anything. The price is what it is because the demand is there. Which is to say, the demand for black market dollars is higher than the demand for legal dollars. Another factor is scarcity of supply in such situations.

With bitcoin, the countries with failing fiat economies are the most likely to ban it. Those are also the countries where people will be most desperate to find alternatives to hold their money over fiat. Reduced supply (only criminals have bitcoin) with rising (desperate) demand means the price will stay stable or go up. If it goes up it will spill over into the legal parts of the world in the form of arb. These are basic fundamentals.

According to your logic, if bitcoin is made illegal, the price of my bitcoin holdings would skyrocket?  I'm off to Washington -- lobbying to illegalize bitcoin so's I can haz filthy rich :D

Gox has been failing for almost a year now.

We started calling it emptygox back in august, when everyone was fleeing via bitcoin because fiat withdrawals were not processing, and at that time Bitstamp because the most important exchange.

Yep and the same thing happened after the China debacle - took about 48 hours until the news really sunk in and people started selling.

adjustment is done every 2016 blocks, what if we can't make this far


I am not miner myself I have never been. I don't know what kind of mentality they have. Will they persevere in case price plumt suddenly to $50 bucks or will they drop instantly.
Without huge asic players network may experience serious problem lasting to new adjustment point. There may be need to support network for sake of its survival not profit at least in short run

wohohoo, now I smell real fear and a touch of desperation!

That just means confirmations might take longer for a while. Doesn't matter (except for easily frightened people who don't understand what they have thrown money in, which means cheap coins for the rest of us).

Miners invested in equipment. That's more than electricity. Some get electricity for free or flat. So they'll keep mining.

But you are right - should the price drop extremely low, we may never make it to the next adjustment of difficulty. But frankly I can't see why the price would drop to sub $1 levels. As plausible as gold dropping to sub $1 levels / ounce.

The algorithm for Bitcoin Difficulty change is not one way.  If miners stop mining and the number of blocks solved per hours drops below parameters, the difficulty will adjust downward to keep the number of blocks solved per hour within parameters.


https://en.bitcoin.it/wiki/Target (https://en.bitcoin.it/wiki/Target)

Guys,

This looks more like a restructure and rebrand now than before...
"Bankruptcy Protection" has some similarities to "Bankruptcy" but there is a huge difference...

http://www.ehow.com/info_8053559_bankruptcy-vs-bankruptcy-protection.html
http://www.differencebetween.net/business/difference-between-bankruptcy-and-bankruptcy-protection/

It is basically a protection from the court to give them time to restructure and remodel and rebrand and re-everything (recode, relocate etc) while investors cannot sue them during that time:
http://www.zalkinrevell.com/bankruptcyprotection.html

So.. think about it, if they are going to rebrand and start new, what is the next step they need to make? this one.

Some evidence:
1. There was a HUGE btc debt erasing for a low $ value in the last weeks of trade on MTGox. (about 350k-400k coins have been erased as debt for a sum of around $63,000,000 - $72,000,000 ($180 per coin).
2. Gox.com redirects to MTGox.com.
3. Gox.com registry shows it was recently changed to the name of Mark Carpeles.
4. Mark said other parties are involved in trying to find a solution to this current problem, its live on mtgox.com
5. It's obvious that not taking a step to save and rescue almost a million MTGox customers can damage Bitcoin severely in the long run, due to more banks not agreeing to work with BTC companies, more regulation straggling Bitcoin businesses, panic from main stream and more. Therefore it is an incentive for big players to intervene.
6. On the document where a rescue plan is discussed and structured, the date for the shut-down of MTGox's website/trade is Japan morning time of the 25th February 25th. The document was released BEFORE the shut down happend, and indeed it was at the time specified.
7. The next step, according to the document is to restructure and Mark to step down.

In my view, the chances of that rescue plan to be happening just got a lot bigger.

Obviously, I might be wrong, and obviously even if a plan IS happening it doesn't guarantee it will succeed.

Anyway, I think you should know and realize that this is (in my opinion) probably what is going on.
We should get a statement on MTGox.com website within a week in my opinion.

I don't see how they could ever be successful again, at least as long as the same people are on board. Just more buying time.

Restructure means the CEO/management and/or employees etc will probably be replaced.

Don't forget, that us, the Gox customers who have fiat/bitcoins on record (right now as debt) will gladly login to our new accounts where we can see our debts and resume trading.
When we resume trading, they will gain commissions.
If they allow BTC withdrawals, limited at first, but allow it - then people will report successful btc withdrawals, others will report successful fiat withdrawal, there will be more transparency in the way the company works and at first, the prices will be lower than the other exchanges. But with time, people will realize it is working in terms of withdraw and trade.. therefore people will want to put more fiat in this "new" exchange to gain some arbitrage opportunity and/or buy cheap for the long run. Therefore new money will find itself landing on the new exchange.

I think a HUGE clarification is needed on whether these coins were LOST as in STOLEN, or LOST as in DESTROYED.



Here is the difference:

If they were stolen, market thought 850K were on gox (which they weren't), but the other 850K have been in the ecosystem the whole time.

If they were obliterated,  market thought 850K were on  gox (Which they werent) and 850K wasn't in the market the whole time which makes bitcoin more rare.


Yes I know that either way it is bullish, since now 850K bitcoins won't be released and come out flooding the other exchanges, but it makes a big difference in both terms of scarcity of bitcoin, but also.... how does it feel to know that roughly 1/12 of bitcoins are in a criminal's pocket?

I hope for the sake of all of us that these bitcoin were accidentally destroyed. I'm sure its probably a mix of stolen and destroyed though...

Either way we NEED clarification on this point. Anybody have any idea? did Karpeles specify?

And..... you expect them to just openly state that they stole the coins?  ::)

Do you think that just stating the coins were "LOST" is sufficient? In bitcoin world, things don't get lost, the private keys are either stolen or private keys are "Lost".

Either the coins are lost forever and we should be able to be given a list of BTC addresses that the funds should NEVER be moved from since the private keys are not in existence any more, or they worked their way into a mixer and are gone. Bitcoin is the ultimate paper trail, these answers should not be that hard to find out unless gox completely wiped their database.

Which is it? any company filing for bankruptcy has an obligation to provide details on how the coins went missing. whether stolen or "burned"

My guess is the majority went missing due to karpeles accidentally dropping a table on a database of private keys.
 

Fraudsters have no benefit from releasing clear info. It's not a matter of what's possible.

Self-regulatory organization (SRO), the board of which would be elected by exchanges and perhaps the bitcoin foundation, which would be voluntary for exchanges to join, which would provide supervision and guidance.  Exchanges that didn't join the SRO could still exist, but the public would have the option of purchasing bitcoin from one that had that extra layer of supervision.

Please don't forget that this was not Karpeles alone.

There are tons of Bitcoin's elite that manipulated the market, lied, and vouched for an obviously inept organization.

Thats not the point - the thing is that difficulty does not get adjusted after 14 days. It gets adjusted after 2016 blocks. Should the hashrate drop significantly, the time to the next downward adjustment will also be very long. During that time, TX processing can be so slow that it affects Bitcoin price. That may make the remaining miners give up mining. TX processing would come to a halt and Bitcoin would die.

This scenario  isn't realistic, though - at least those miners who don't pay for power will keep mining. As will those miners who simply want Bitcoin to survive.

And everyone will know that as soon as the the 2016 block is done everything will be back to normal...

Ah, a few pages back I see some people who only have half of the price equation (very important to have the whole equation when we are discussing the infamous topic of "What bitcoin prices will do if it is made illegal [in an unspecified number of countries] partially due to Gox's stunt")

The basic economic misconception is that price = demand.
Using that equation, demand will go down since "Joe Schmoe" listens to his government and doesn't want to go to jail.

Reality? Price = supply vs. demand.

Will making bitcoin illegal affect demand but not affect supply? Absolutely not, this is preposterous.
Supply will also go down. (Yes, technically speaking supply is fixed, but bear with me here.) Some exchanges would have to shut down, either having been made illegal, or having no legal funding/withdrawal methods. This would technically reduce supply (yes I know miners are the supply, but exchanges serve an important role as middleman. In the same way that poppy fields still exist, but drug stores do not stock heroin, therefore, price goes up due to reduced ACTUAL supply to consumer.) Institutional miners/mining farms would have to shut down as their operations would be illegal. Only "criminal" anonymous miners and "criminal" OTC dealers would be significant suppliers of bitcoins, and liquidity would be an issue. Sure, roughly the same amount of bitcoins could be created, but it would be harder to get it to the consumer. You could grow huge fields of marijuana... and then get arrested.

And since we love drug analogies so much, what is another way that supply would be reduced? Well, what does the government do when they seize thousands of kilos of cocaine and marijuana? They burn it, destroy it. Sure, occasionally they smuggle it in and sell it themselves, but for the most part it is destroyed. What will they do whenever they uncover some teenager's basement mining farm? Will they sell the bitcoins on the ILLEGAL open market? No, just like with drugs, they will send the coins to a trash address using proof of destruction (yes, proof of destruction is possible in the protocol.) There is no reason to believe they will treat it any differently. While it is still legal, yes they can auction off DPR's coins. But what about if DPR's coins were not coins but a stash of home-made bombs or methamphetamine? Would they sell those on the open market? No, they are illegal, so they would be destroyed. Yet another way supply would be reduced is by the government confiscating coins and destroying them.

Supply would be reduced to - "criminals" and "criminal" miners.
Demand might be reduced, yes, but by how much is not so apparent. People currently risk jail time in Argentina to buy a currency that inflates less than the Argentinian Peso. And the dollar black rate there is more then the legal rate... Already people risk jail time to sell drugs (made illegal, supply dried up, prices skyrocketed, and demand DID NOT dry up) and they risk lawsuits to download music and films on bittorrent (made illegal, supply is a little harder to get at, bandwidth skyrocketed, demand skyrocketed).

So when pondering the infamous "What will bitcoin price do if it is made illegal?," be sure that you are considering the price equation as "price = supply vs. demand" rather than just "price = demand." For if you only consider the effects of litigation on demand, and not the effects of litigation on supply, you will surely get Goxxed by your government when the time comes  ;)

depends. the difficulty will only be lowered to a max amount (i think 30%, but not sure). there are alts which suffered from that.

but i dont believe more than 30% of miners are quitting (are there even any quitting yet?) and i am sure we could make a fork to circumvent the problem

The supply = (all the bitcoins mined to date - bitcoins "lost" due to lost private keys etc.).

The local bubbles of scarcity are balanced by local surplus bubbles (a guy trying to sell bitcoins without interested buyers).

*As far as black market value of currency, it is driven by white market value of that currency.  If there was no way to spend the dollar, its black market value would be close to zero.

They don't have enough money to allow withdrawals.
If they reopened, there would be a massive flood of withdrawal requests as everyone tried to be the lucky one who actually got paid, and then there would be no money left at all.
Only an idiot would send more money to an exchange which has openly admitted that they don't actually have any money.
What is the good of buying cheap BTC if they don't actually have any BTC to sell you?

This. I am a (not really wealthy) person waiting to invest fiat  in btc at the "right time", but I do not see the time as right at all now. At least couple months from now and considerably lower prices, to compensate the risks

Looks like you were right. Price is dropping, albeit very slowly.

Get a helmet and body armour; it hasn't even started yet!

My $.02.

;)

...lolz welcome to crypto

This is my 3rd cycle..... if u are going to hang around you better get used to it :D

You should imagine the situation and see exactly how it folds.
Say they limit the withdrawal to 10BTC/DAY with 50 limit per month...
Then those who have 500 BTC will take 10 months to withdraw... what about those with 5,000 BTC? 100 months... in the current rate.
So yes, manye PEOPLE will withdraw, but not many COINS will be withdrawn,

So they dont need that many BTC to allow withdrawals, furthermore, they can limit BTC withdraw to only verified accounts.

Now, at that point where people withdraw successfuly, both fiat and BTC, others will want to put money in there, maybe small amounts, but they will want to put it there because they could easily arbitrage or just buy cheap and withdraw to an outside wallet.

Therefore, this will resume operations.