First the, main reason this thread is in "Marketplace" is because of the gargantuan "$45,000 thread" in here.  But, it also fits here because it is about Mt. Gox and Mt. Gox is a key player in the Bitcoin marketplace.

Second, the purpose of this topic is to help out people who are trying to interpret what that giant thread actually means for Bitcoin, Mt. Gox, etc. without having to wade through it.  It is not a place for bickering over scams, calling people out, arguing about details--page 6289 of the other thread is for that.  It is just a simple place for people, in one short post per person, to describe their level of trust in Mt. Gox, and what their personal experience with the site and its owner has been.  Save the speculation and philosophical conflicts for elsewhere, please.  Let's keep this about just the day-to-day participation of Mt. Gox in the Bitcoin community.

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Now, to help ensure the details of that other thread don't need to get rehashed too much in this one, here's a rough overview of what it contains:

On February 21, a user "Baron" (new account) posted that:

• his Mt. Gox account had been frozen with approximately 45,000 USD in it.
• Mt. Gox had questions over certain Bitcoins in his possession
• Baron had purchased these Bitcoins anonymously over IRC and was unable to remember any details such as channel, usernames, etc.
• the frozen money came from Liberty Reserve

Mt. Gox responded:

Baron continued posting extensively, saying he wanted to return the 9000 BTC in question, offering his own chronology, but then later altering his original IRC story, saying that although he had trusted Mt. Gox with 45,000 USD he would not provide Mt. Gox with his real name or an ID scan, saying that involving authorities and the law would be financially impractical but then claiming to have spoken with his lawyers less than 2 hours later.

TheKoziTwo demonstrated how Baron's account was linked to the BTC in question--a direct link with no middlemen.

Mt. Gox clarified:

"Baron" continued posting more irately, threatening legal action and demanding access to the frozen account "to take screenshots", demanding information about Mt. Gox, claiming unable to speak on the phone due to muteness, etc.

Mt. Gox offered a complete rundown of what happened with Baron's account.  Executive summary:  damning evidence of more than $45,000 worth of theft.

Baron began posting in red that Mt. Gox is a scammer, that he would have him put in jail, while still refusing to identify himself or even his nationality, apparently forgetting that he claimed he had already done so.

Mt. Gox added that since putting the money in his Mt. Gox account Baron has been withdrawing the maximum per day, and that logs of the standard bitcoin trade channel on IRC contain nothing like the alleged purchase from "the real thief".

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And that's where we're up to now, 37 pages and a little over one week later.  I hope I was able to save some people the wade through all that.  I'll try to update it as anything new comes in so we can keep it out of this thread as much as possible, and hopefully save some people the dig through that one as well.  Took a good few hours out of my life, but better one person than everybody.  So to get the focus back on track, here is my own short and sweet description of my trust in Mt. Gox:

I had no prior relationship with anyone in the Bitcoin community when I joined it a couple months ago.  Every single Bitcoin I have purchased (not a fortune, but a decent amount) has been facilitated in one way or another by Mt. Gox.  I think that Jed has handled this difficult situation exceptionally well.  I don't feel at all that he's overstepped his boundaries.  To stand idly by while a thief made off with so much cash would have been unconscionable.  He's been fair, open, and the only thing anyone can say against him is that he doesn't spend his whole life on the internet.  Thank goodness he's actually running the business part of the time!  Baron is working his story as hard as he can, but it doesn't begin to match up.  If Mt. Gox was acting in the least bit unfair toward him it would have been a massive risk that an unknown Mt. Gox user turn out to be a respected member of the community, or the planet, who could destroy Mt. Gox's reputation in a heartbeat.  Instead we have a nameless, faceless username just trying to stir up trouble because he got caught.  I won't begin to give him the satisfaction.

End result?  I pretty much trust Mt. Gox hands down.  I'll trust the exchange with my money and identity, my respect, and with an important role in the future of the Bitcoin community at this crucial time.  I would firmly recommend it to any new or old user of Bitcoin as reliable and trustworthy.  That's the takeaway from this thing--tested and found true.

Go Mt. Gox!  I'm behind you!!  This incident just proves how hard you work to do your job, and I'm greatly indebted to you for it.  Here's to a long and bright future for both you and Bitcoin itself, despite anybody else's attempts.


Sincerely,
eMansipater

I think you just blew my mind MarkM

So they're kind of like baseball cards?  I know a guy who used to collect those.

I'm kind of amazed that no one has started a betting pool on this one yet.  Especially since this is "Marketplace".  I for one, would love the chance to bet good money against anyone who believes that Mt. Gox is going to keep the 45,000 themselves.  Or against anyone who believes that trusted third party logs of the alleged IRC transaction will ever come to light. TTBit, you want to put something up on BitcoinSportsBook?  Putting our money where our mouth is seems simpler than bickering ad nauseam.  And it would be a good way for an observer to measure the community's trust in Mt. Gox.

Only read the first 21 pages, but promise I'll finish when I have the time.  I just have one question:

Has nobody searched the IRC logs for Baron's address?  Seems like a pretty simple thing to do.  If his story is real he had to hand over the destination address at some point.  If he didn't use the standard channel then his explanation of the whole thing is badly lacking (how did he end up in some random channel, trading BTC, but have no memory of the nicks, channel, and no way to get them from a history, etc.)

And to Jed (Mt. Gox) I sincerely hope you aren't having to read this thread repeatedly but if you are my trust is with you.  Freezing is a safe middle ground since the money is still there and in good hands.  Sill behind you and all the work you do for the bitcoin community!  Some of us out here still have a little patience


sincerely,
eMansipater

Alright, everybody--on three!

1)Obfuscation != indemnification
2)Video-sized public keys = no bandwidth savings and terrible codec performance
3)"Build a web browser"

Need I say more?

No hate from here, I've had many a nerdgasm on cryptography/steganography before.  Just thought I'd save everyone the trouble of trying to explain why this won't work.

p.s. the blockchain is around 150mb right now

Right! (I changed the one word above and bolded the first one because I'm pretty sure that's what you meant: "not valid")  Talking in terms of currencies you could say that billionaire person is in Bitcoin 2.0 already while we are all in Bitcoin Original.  They can't sell their Bitcoins on our exchanges or exchange them with our software--if they wanted to use them they would have to find some poor fool to join their side of things and leave ours.  Or if you want you could flip those terms--the point is that each person gets to decide which currency they're using, and nobody can force them to change if they don't want to, not with the biggest supercomputer in the world.  This is actually a much stronger position than real world cash!


Excellent!  You are very welcome.

theymos is right on the money.  But since I don't know your level of technical familiarity, feel free to let me know if this still confuses you.  Basically, your bitcoin client won't accept any deviation from the "hardwired" rules even if every other person out there switches--you will be the only person still using Bitcoin Original but it will still work perfectly.  And importantly, if Bitcoin 2.0 ended up in the toilet because of the injudicious expansion, people would still be able to rejoin Bitcoin Original and spend their coins from before the switch as if nothing happened.  This is the biggest reason that a network-wide change would be pretty much all or nothing:  the situation of competing protocols is pretty unstable.

More broadly, since currencies are a medium of exchange between parties the concept of being subject to the will of everyone else is unavoidable:  if everybody else on the planet starts treating the USD like toilet paper, your millions under your mattress won't mean what they used to.  The main difference between bitcoin and USD is that the federal reserve can print official USD whenever they want to, and banks can 'create' USD through fractional reserve systems.  Bitcoin Original, by contrast, will never change even if there is only one person left in the world using it.

It's also informative to look at this from the perspective of the person starting up Bitcoin 2.0 because they are basically starting a new currency and giving people starting credit based on how many Bitcoins they (continue to) hold.  Why would they do that?  Unless there is reasonable assurance that everyone will switch to the new software (like in the case of adding decimal places) it is going to be one huge debacle.  Most businesses/investors are never going to switch to Bitcoin 2.0 just because it hands out free money.  And anyone who accepts Bitcoin 2.0 would be a fool.  If you don't believe this, you could start a Bitcoin 2.0 version and see what happens (I'm sure you're too smart for that, but it's a helpful thought experiment).  A much more realistic idea for a Bitcoin 2.0 would be that the person would make you hand over your Bitcoins to get the new Bitcoins, and base them on their own blockchain instead of just trying to update Bitcoin itself.  Then, like theymos pointed out, the two will exist side by side and could be traded between.

Bringing it back to basics, just think of it like currencies.  You could get everyone to stop using the currency they use and start using a new one, like Brazil did with the Real, but you would have to have a very good reason and the endorsement of some major authority figures for the whole economy to switch over.

We do have a historical precedent of how the community tends to respond:  in block 74638, or alternatively on August 15, 2010, someone exploited a loophole in the then-current client to give themselves 184 billion bitcoins.  An update to the Bitcoin software was immediately created that deleted that block and corrected the blockchain while including all other legitimate transactions (the cryptographic security of bitcoin makes it easy to keep valid transactions in these scenarios), and that new version of software was released to the public.  The majority of the nodes switched immediately for obvious reasons, and the fixed blockchain overtook the compromised one at block 74691 (very quickly).  This is also an excellent demonstration of why simply trusting the most computationally intensive blockchain is a safe move--once a clear majority of computing power has switched that blockchain will always win out to become the most secure record.  And even in the midst of this commotion an attacker with more computational power than the whole network couldn't have spent other people's coins or altered their transactions.  It also demonstrates how Bitcoin's nature allows anyone connected to the network to hold it accountable.  Go jgarzik!

Sincerely,
eMansipater

Precisely.

Just like in the real world, where if everyone else on the planet starts treating your banknotes differently you are up a creek without a paddle, there is no protection against *everyone else* changing the way they use bitcoin.

Speaking more technically, to fork the blockchain effectively the majority of the network's processing power must agree to the change.  And for a change as drastic as increasing the total number of bitcoins, everyone who wanted the change would have to start using a new Bitcoin program.  If you chose not to upgrade your program you could still keep going as always with those who also did not upgrade.  The value of your bitcoins, and the services available to you such as buying and selling for other currencies, etc. would depend on the people using that original software, and whether they would provide those services.

Speaking practically, no serious user of bitcoin, including the exchanges, major bitcoin businesses, etc. are going to accept a version of the program that changes the rules without a very good reason such as closing a security loophole.  There is no practical scenario where your value in bitcoin is going to be swept away unexpectedly by the network, because everyone else on the network has that same concern.

The method of coin creation is "hardwired" into Bitcoin, so even with all the world's supercomputers put together an attacker can't just put pretend coins into the mix--any blocks that do that won't be accepted by anyone else.  Blocks are only accepted if they follow the rules.  The only thing an 'attacker' could do is compete fairly for that set amount of coins that is being generated--and this costs that person just as much in hardware, electricity, etc. as anyone else.

It can be difficult to imagine just how small 8 decimal places go.  Let me give you an idea:  the U.S. economy is around 14.7 Trillion dollars, or:

14,700,000,000,000

In servicing this size of an economy people have put to use about 1 Trillion dollars of hard cash in some form (approximately 3000 per person in that country).  If we wanted to use Bitcoin to replace all U.S. dollars then one Bitcoin would be worth about $50,000.  So a $1 loaf of bread would cost

0.00002 BTC

which only uses 5 of those 8 decimal places.  That means bitcoin in its current form can handle 1000 times as much economic activity as the entire U.S. economy before you would have trouble buying a loaf of bread.  You can imagine that this won't happen for a while.

Even if it were to happen, however, and/or some fluke circumstances took place such as a rich early adopter losing their 2 million bitcoins (ouch!), there still wouldn't be a problem because Bitcoin can easily be updated to use more decimal places.  Unlike above, everyone would happily accept this small change in the bitcoin software since it doesn't hurt anyone and has a very good reason.  So we can keep dividing bitcoins till kingdom come without issue.


No worries--it can take a while to actually fit in to your head just how beautifully bitcoin solves all the potential problems with digital currency.  I just discovered it a couple months ago and I'm still in awe of it.  I'm also very happy that my investment has roughly tripled in that time.  Both theoretical and actual substance working together--a rare event for our planet indeed!

sincerely,
eMansipater

Technically, each and every block attempt is unique:billions and billions of them every second.  It's just that once a new block is made you have to be sure to include its hash in your continuing attempts.  There's not really any sense in which everybody is working on the *same* block, except that if you are very unlucky and make a new block just after someone else did, but failed to include theirs, your attempt fails.  It's much more like each hash attempt is a lottery ticket, where you can make as many lottery tickets as you want and the odds of winning per ticket don't change until the difficulty is adjusted.  So when someone outside the pool finds a block, the pool doesn't "give up" and move on.  It just adds in that information, just like it did all the transactions that were coming in as it worked away.


No, the OP meant only that none of the pool's lottery tickets turned out to be winners for 10 hours straight.  The network rate of wins varies but these days it would be extremely rare to go 10 hours without a winner anywhere on the network.

sincerely,
eMansipater

Stop confusing this poor person, all of you!  Yes telestrial, here on the forums you are likely to find a lot of people who do mining, talk about mining, etc.  But mining is just the competitive process to mint bitcoins and keep them secure.  It's about as relevant to the whole bitcoin economy as the printing of banknotes is to the U.S. dollar economy:  the normal way for regular people to use bitcoin is just like any other currency where you are rewarded for working, selling things, or offering services regardless of what computer you run.  If you want bitcoins I recommend you do what I did and exchange some other currency for them via https://www.bitcoin4cash.com or some other reputable service, accept them for work, or sell something for them.

As an aside, however, the mining process is actually a beautiful detail in bitcoin because of the competition being based on computing power.  Forgetting the technical side of things for a moment we can see how amazing it is by relating it to the printing of banknotes.  Most banknotes cost a few cents to print and the job of doing that is contracted to specific people.  But what if, once it had been decided how many more new banknotes were needed, anyone could compete to produce them?  As long as we have a way of ensuring that only that number are produced, and that the company printing the most secure banknotes gets to spend them, we can see that competition will drive the amount of security going into each note close to its face value.  We would end up with notes much more secure than anything we've had before, and instead of one entity making money hand over fist the competition would mean the company makes roughly the fair value of what it costs to perform the work of creating the bills.  This is how bitcoin works--competition keeps driving the difficulty of mining closer to the cost of mining, and this all makes bitcoin incredibly secure because attackers of the network need to either overpower the network temporarily (for a small scam, like spending coins they already own twice) or perform as much work as has been done cumulatively so far (to take over the whole network).  Most beautifully, as bitcoin increases in value the difficulty will tend to scale with it, meaning that the more people use bitcoin, the more secure it gets.  Pretty cool, hey?

Getting back on track, the vast majority of people who use bitcoin will not and should not do any mining.  Mining is just a technical detail that makes everything work.  It has to be in place first, but once it is people can just use bitcoin like any other currency and be able to trust that it's secure without necessarily knowing the nitty gritty of why.  For some other parallels beside using cash and printing banknotes, think of the difference between:

Using the Internet and running an Internet Service Provider (ISP)
Wiring money to someone and running a currency transfer company like Western Union
Using a computer and designing one
etc.

When I explain bitcoin to people, I don't even tell them about the mining process unless/until they ask who creates the coins, or if they would be interested in the technical design.  It's just plain irrelevant to everyday people, except to know that it's very secure (and getting moreso all the time).  I hope that helps!

Sincerely,
eMansipater

I enjoy a good ribbing, especially one that puns on my nick so no worries moa.  But since I'm still relatively new to the bitcoin community, I thought I'd take the chance to comment anyways.

As a person who runs my own 3D printing business, has been involved in several tech startups, helped to start a national political party, and has run for public office with a modicum of success, I've spent a lot of time trying to promote cutting edge ideas among the general public.  The potential for bitcoin to be applied in creating a microtransaction economy, provide unprecedented access to financial security and services in the developing world, and increase the competitive pressure on financial services powerbrokers everywhere makes me pretty passionate about it.  But my experience has taught me that there are two types of communities:  one that remains fundamentally detached from an understanding of the world beyond its subculture, and one that retains and leverages a broader perspective to become truly successful on a meaningful scale.

Because I believe in bitcoin I've invested my real world identity, interpersonal reputation, a great deal of time, a meaningful amount of money, and not insignificant business interests into the community.  I've been successful in notably increasing the level of bitcoin adoption within my social network--financial commitments and real-world use, not just running the client hoping to get lucky with a block.  I just touted bitcoin unofficially at TEDxManitoba with some pretty innovative, influential people.  I'm working on two large bitcoin-related projects.  I convinced a rural Manitoban policeman nearing retirement to accept bitcoin for a real-world purchase (he's pretty happy that bitcoins are worth 2-3 times what they were when I did that).

If there are other people out there who are as serious about making bitcoin succeed as I am, I hope they would share their experience and opinions just as strongly and clearly as I have.  Without that, there wouldn't be much of a bitcoin community.  And without a bitcoin community, bitcoin isn't going to have the chance to provide freedom to anyone.  So yes, they're just words, but I'm going to use them (like everything else I have available to me) as effectively as I know how to try and make bitcoin succeed.  Right now that means getting as many people here as possible to ask themselves if having bitcoin associated with drug trafficking, HYIP's, and other illicit headline fodder is really a battle they want to fight.  And a huge +1 for the marketplace rules--simple, not overdone, and an important move.

sincerely,
eMansipater

Hey slush, just wanted to say major kudos for your work on the score-based system.  It's an excellent balance between preventing cheating and maintaining low variance, with stats all beautifully available to boot.  Like many others I was getting a huge proportion of invalids so I've switched to solo to try and ease the load on your server until you can get more power online, but I'll definitely be back once everything is stabilised.  Great job!

eMansipater

I would agree, with one difference--rather than leave this to some future anonymous person, consider the following.

Either there are people present here who think it is important to have a place to offer "questionable" goods/services for sale or there are not.  If there are, now is a good time for them to create some sort of Bitcoin Alt forum somewhere else due to ribuck's second paragraph above, and we can get any such activity moved over there.  If there are not, then we can probably agree it is time to intentionally narrow this forum away from illegal goods and other things that you can be sure are already stopping some people from using bitcoin. 

I'm not going to pull any punches in stating my opinion here:  these forums are linked directly from bitcoin.org, and anyone who doesn't think branding and image don't matter has never tried to launch anything of popular scale on the internet.  Bitcoin's underlying technology has already been proven sound--the hard work is now popularizing and implementing it among the masses.  We are in that stage already.  The leap from early adopters/technophiles to the mainstream is no accident--it takes a lot of hard work and requires appropriate and timely decisions on matters of precisely this kind.  I think anyone with a question in their minds needs to take a good look at the comments on Slashdot, etc--bitcoin does have an image problem right now, and it's causing people who should be the biggest bitcoin fans in the world to dismiss or even attack it.  Not what we need.  A 5 million dollar value base is a good start, but we are going to need a lot of enthusiastic people to take this all to the next level.  Personally I'm investing a lot of time, interpersonal trust, and mindshare into growing the bitcoin economy.  To me the idea of having that thrown away just so that some faceless person can sell drugs on the official forums is kind of ridiculous.  The difference between bitcoin's success and failure is a lot of hard work, and I'm willing to do my fair share of it.  That's something a lot more valuable to the future of bitcoin than merely being able to brag that these forums don't have any rules.

sincerely,
eMansipater

Yes, as even a basic standard of professionalism nothing that is not intentionally being made part of the "bitcoin brand" should be allowed on these forums or anything else officially connected with the project.  If people want to use bitcoin for these things they can do it in a back alley somewhere like they do with any other kind of cash.  I know that some of the users here are big libertarian/anonymity etc. fans but there are plenty like me who don't have that as a priority at all and just want to use bitcoin as a much more efficient version of paypal.  To be frank, if the world market for bitcoin is libertarian techies we've probably already saturated it.  Bitcoin adoption on any significant scale will be more to do with people like me--people who want to conduct normal, above-board transactions and build businesses based on the economic model that it enables.  It's perfectly fine for anarchists/libertarians/whatever to appreciate particular aspects of bitcoin, but I think it's quite smallminded to think that any particular community or philosophy, especially outside of the mainstream, is "what bitcoin is about."  Just think about it for a second:  What is cash about?  Who uses it?  Particular forms of cash have advantages and disadvantages from different economic and philosophical positions, but in real life cash is something that people from every aspect of life use for purely non-philosophical reasons.  If the current users of bitcoin can get that into our heads we will be much better positioned to actually make bitcoin successful, which depending on your particular slant might have those particular benefits you are looking for.

eMansipater

Is it that, like Monty, many people who just gave away 1000 Bitcoins will be feeling pretty foolish soon?  Just joking you people that applies to, those early trades were an important part of building the bitcoin economy, as are trades today.

Sort of, except that the security of the system would be dependent on the computational power, so either this company runs tons of gpu's around the clock to keep their own stock secure, or finds some way of convincing others to do it for them, which is the tough part.  Perhaps they could design with X shares retained in the genesis block, and an asymptote to a given ratio of X, thus allowing people to buy in stock with either cycles or cash?  but it seems like this would just cause generation to die off on the asymptote schedule.  without transaction fees, why would anyone keep generating?

On a complete sidenote, I think a lot of people (not necessarily on this forum) underestimate the genius of Bitcoin.  It's an incredibly effective solution to a very specific problem--without all the parts working the particular way that they do, it wouldn't make very much sense.  But it fits those parts perfectly.  I don't think I'm soon going to lose the sense of awe I felt when reading the specifications of the system for the first time.  This thing is deeply masterful!  If you're reading this Satoshi, here's to you.  And I hope you are.

eMansipater

Amen to that.  Establishing a new currency is a lot of work, but we're going out there and doing it.  That's what's going to make it succeed.

+1
Technically bitcoin is doing a bang-up job.  It's time to start working on user-friendliness, which has a ways to go for the average Sally.