That's just a preliminary step. The important milestone is when people are successfully completing big withdrawals and receiving their funds from Mt. Gox without problems. If there's any stalling on delivering cash, something is very wrong at Mt. Gox.

Current market depth (USD, TradeHill)

The market right now has some depth to it, with a good supply of buyers and sellers, so the current price, about $15, is what a Bitcoin is worth right now.

With Mt. Gox offline, things have been relatively stable. If Mt. Gox shows high volatility while Tradehill does not, that's an indication that something funny is going on over at Mt. Gox. Normally, a larger market is less volatile.

There are major conflict of interest issues with an exchange that itself is a trader.

A real exchange doesn't care what the price is. They just make money on transactions. There's no way they can lose big. The same is true of brokerages.  (Mt. Gox is both, because it holds customer funds.)

It's so tempting for brokerages to trade for their own account. Historically, this is a bad thing; many brokerages have collapsed doing that. It's also possible for brokerages to cheat their customers in many ways.

One is "front-running". A player who passes along orders can insert their own orders into the stream. All they have to do to make money consistently is to occasionally put in their own matching "buy" order when someone sends in a "sell" above the last price, and fill their own order first.  Conversely, they can put in a "sell" on a downtick. The edge from that information advantage is enough to insure profits in a volatile market.

Another is failing to segregate customer funds from the brokerage's own funds. Legitimate brokers are required to do this. (Banks are not, which is why banks are so heavily regulated.) If funds are segregated, and the brokerage goes bust, the customer's funds are still there. Failure to segregate funds usually means the broker is speculating with the customer's money.  Mt. Gox is opaque enough that we don't know if they're co-mingling funds.

This is why I strongly suggest not keeping funds with Bitcoin "exchanges". Move out all balances daily. Trade if you like, but don't use an exchange as a bank. They're acting as banks, or at least non-bank depository institutions, but they don't have the regulation or auditing required to hold the funds of others.

If Mt. Gox delayed trading for a long enough period for people to get their money out, everybody would pull out their cash. We know Mt. Gox loses some money in the "rollback", since some funds were transferred out before they stopped trading, and thus some transactions can't be rolled back. We don't know how big those losses were. If everybody pulled out their cash, Mt. Gox would have to make up those losses or go bankrupt.

I'd suggest pulling all funds out of Mt. Gox immediately after they re-open, and waiting a few days to see what happens next.

Right.

Everybody, go read pyramid scheme on Wikipedia.

The cluelessness level here is embarrassing.

We've just had two days of a nice steady $13-$15 Bitcoin. There's enough trading that it seems the market agrees that's the price.

Bitcoin today (USD, TradeHill)

We're getting past the drama phase. That's what a useful currency is supposed to look like - flat and boring. When the chart looks like that, merchants can price products in Bitcoins. Merchants typically deposit their day's receipts in a bank once each day. If the price of Bitcoins is steady over the course of a day, merchants can convert to a real currency once a day, pull out the cash, and put it in their bank account.

There's a reasonable amount of market depth behind that, too.  At first, trading on Tradehill was very thin, but now there's a a few thousand Bitcoins of market depth on both the bid and ask sides. That's not huge by financial standards, but it's enough to allow some modest real-world businesses to convert their daily take.

Back in the Mt. Gox era, we were seeing $30 and $8 in the same week. That had to stop.

This is real progress.

I'm going on the fact that there are links for "Sign up" and "Deposit Money", no contact information, and a free SSL cert which doesn't identify the subject. Perhaps once you log in there is a "withdraw" option.

Probably not.

• There's no business name and address on the site. There's no way to withdraw funds, only deposit.
• They're in Russia.
• Their entire volume today is 47 bitcoins.

Any questions?

Exactly. That's the way most pump and dump schemes go. There's a good chance it's already gone.

Everyone speculating on Bitcoins needs to read Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. Especially the part on Tulipomania. This book was published in 1852, and reports all the classic make-money-fast schemes in their Version 1 form. 

It's worth understanding the economy of Second Life. Linden Dollars, like Bitcoins are convertable to and from other currencies. The things for which Linden Dollars are used are somewhat banal, but that's also true of Bitcoins. "Mining" of Bitcoins is a lot like "camping" in Second Life. While the two systems are not truly comparable, it's worth looking at how it's worked out in SL land.

Second Life has had financial disasters. The most famous was Ginko Financial, which was a Ponzi scheme disguised as a bank in Second Life. SL has thefts and frauds, too. But the currency cranks along. It's manipulated by Linden Labs, though; they add new Linden Dollars to the economy to keep the US$ exchange rate relatively constant.

That's important. Volatility is a huge problem with Bitcoin. Until the exchange rate stabilizes, with, say, under 1% variation per day, nothing of real value can be priced in Bitcoins. If the volatility gets down below 1% per day, pricing in Bitcoins on a daily basis becomes feasible.  If volatility gets below 1% per month, it's usable as a currency. Until then, it's a speculative commodity.

The Mt Gox site is now really a Zendesk.com page. Zendesk runs help and ticket systems. That's why the Mt. Gox site is now showing the Zendesk logo:

Those guys are so bad at TV that they're funny. It's TV by noobs.

In a strict sense, they're "non-bank depository institutions". But I felt that was too advanced a term for this forum.

For background on that subject, see this paper from the Kansas City Fed: "Recent developments at banks and nonbank depository institutions". That was written in 1983, near the beginning of US financial deregulation, as the types of financial institutions started to proliferate. It used to be that the same institutions accepted deposits and made retail loans. The job can be split, though, with one institution accepting deposits and another making loans. Non-bank depository institutions have to put their money somewhere, and if they put it in a bank, they are lending it to the bank. 

Bank regulation exists to protect depositor's funds.  Generally, banking regulation is applied to depository institutions, regardless of whether they make loans. On the other hand, businesses which lend their own money but do not hold deposits (like payday-loan companies) are not regulated as banks.

So an "exchange" like Mt. Gox would be subject to banking regulation in some jurisdictions. PayPal is regulated as a bank in the European Union, and as a money transfer service in the US and Japan. As of April 1, 2010, money transfer services in Japan must be licensed. Does Mt. Gox have a license?

Why all the haters? 

• The "early adopters" and promoters already have most of the Bitcoins.
• The "exchanges" and "exchangers" are all on the flaky side.
• The volatility is so high that nobody can afford to take Bitcoins for real merchandise.
• The entire Bitcoin market does less volume than one supermarket.
• The "mining" thing is silly.

It could be worse, though. We could have a virtual currency run by Zynga.

It's just a talking-head video, from someone not interesting to watch. Text would be more useful.

The News Technica article says it much better:

"It is completely incorrect to describe Bitcoin as a 'pyramid scheme.' Technically, it’s a 'pump-and-dump.'"

I'd agree that keeping funds on any of the Bitcoin exchanges is foolish. The problem with Mt. Gox, and some of the other exchanges, is that they're not just an exchange.  They're banks, too. They hold customer funds as deposits.

None of the major Bitcoin "exchanges" is solid enough as an institution to act as a bank. They're not even at the level of some small-town independent bank in terms of organization, security, regulation, or financial strength. Mt. Gox, before the crash, was handling more money than some small town banks. But they had only two people, and no clue about security of a financial institution. Real banks and exchanges have insurance bonds on their employees, errors and omissions insurance, and real auditors. Not these guys.

If you use an exchange, sweep all your funds out of it at least once a day.

"Early" is relative.  Yes, there's a sucker born every minute, but not all of them will go for your pyramid.

If you're the proprietor of a pyramid scheme, you're considered a crook in many jurisdictions.