Nobody in the world is immune.

The only safe thing is bitcoins at an address whose private keys you exclusively control.

If OKPay sums everything on a single account of theirs, it might fall mostly in the 10% cut.

In the US, they would just print 11.1% more money. Same effect, but people don't realize.

That's fine for people who are willing to make the tradeoff.

There are some people, however, who want to limit Bitcoin so that most users will have no choice but to to use off-chain transactions. That's what I mean by disenfranchisement.

E-gold "failed" due to being too big to hide.

Bitcoin hides by being ubiquitous and by not requiring any more resources than any normal Joe Sixpack's home entertainment centre.

So basically as long as Joe Sixpack can still mine with his full node at home while watching Great War of Independence movies or Super Bowl games or whatever and cleaning his gun collection, he might be able to sleep at night without his gun in his hand, feeling reasonably secure that the Feds aren't going to kick his door down in the middle of the night and cart him off to Gitmo for being a patriot.

If the bitcoin services cited had not been run by scammers and/or incompetents, they would likely have followed in e-gold's footsteps. As it was, they shot themselves before their doors got kicked in by the Feds.

-MarkM-

... Making a physical gold transaction costs you about $50 these days.

I am on the opinion that transaction density does not matter that much. Bitcoin's lead over altcoins has been growing during the last 2 years. Now LTC is doing well but after the atlantis hype pump is over, it will resume downtrend. Even if Bitcoin could never do more than 28 tx/s, I think it will just lead to the service developers adopting meta layers of accounting, not to a demise of bitcoin. In one service that I have been developing, we initially wanted to maximize blockchain usage for transparency and trust. The last few weeks led us to make an about turn, and now we want to minimize it for the sake of quick and cheap transactions.

What the gold bugs here afaicr have not yet mentioned, is that during the days of gold standard, gold was actually rather little used in everyday transactions. The purchasing power of a small gold coin was about BTC10 at today's price. You can seldom carry home that much The multinational corporations and nation-states also did not send gold to each other. The big gold was sitting in London and its existence financed the world trade pre-WWI. The analogy to blockchain is obvious.

I can envision that blockchain usage may actually go down as the number of bitcoin users grows in leaps and bounds. It is somewhat frightening to send irreversible transactions to anonymous counterparties. The majority will prefer chargebacks and layers of insurance. Once these services have been developed to cater to the needs of the new entrants, the current power users also drift towards them. We will soon see bitcoin banking that is completely detached from blockchain addresses (in the user interface).  

Off-chain transactions are a type of disenfranchisement.  Nearly ever advantage that makes Bitcoin superior to the forms of money it can replace is nullified unless users are able to perform their transactions on the blockchain.

Please give the development team time to put together a plan.  If the majority of miners are on 0.8, a single bad actor can cause another fork by making a block with too many transactions for <= 0.7 to handle.

Hi guys,

I'll update the head with salient bullets and we'll try and stay on top of questions as they come up in the thread as well.

Let me start about by saying some bloggers have one thing really wrong so far, I seriously respect Gox' hard work on security and uptime and anti-fraud. Most of you have no idea how hard this is, and how well Gox does. The kind of attacks they withstand, social engineering, technical, financial, legal are non-trivial. I don't expect that CoinLab can or should be set up to duplicate that effort; we wanted to team up together because we can offer something that I think will turn that baseline into lots of value for our whole community.

How Will It Work? I've gotten a bunch of questions about this -- APIs, deposit mechanisms, web interface, etc.

In brief, on March 22, nothing about your interactions will change. You'll log in to Gox, do your trading, and go home. You might notice some rebranding on the website. You'll see a different wire-to address for instructions.

Your USD will be in the states at that point, and you'll be able to send to our SVB account for deposits. More about the bitcoins below.

We'll also be using something like trade.coinlab.com as the mtgox interface, at launch. We will be rolling out more features on our site, (beta.trade.coinlab.com?) incrementally and aim at a nicely UI-designed easy to work with site. To do that we'll be instrumenting the Gox site at some point, and figuring out how you all use it. Right now our analytics are fine from a marketing point of view, but we need to get better at knowing how you all use the site, and how we can make it better.

I don't trust CoinLab's Bitcoin or Web Security One thing we're exploring right now internally is leaving the Bitcoins with Gox at launch, and moving them over once we're sure we've got a battle-hardened high transaction volume system in place. Gox is happy either way, so I'm interested in feedback on this. We have a highly secure (I think best in class) storage system we're about to roll out, but it trades rapid response for security, and that won't work for all Gox customers, for sure.

As Mark and others at Gox know, we have a lot of respect for the work they've done. I have no intention of hurting customers by yanking that work; instead, we want to layer on top of it.

Deposit Timeliness
This should improve, if your customer profile is low risk. At the very least, you will be able to deposit at a US bank, rather than wire to Japan. We're doing our first run-throughs of the system at SVB next week with a few early adopters, and that will lead to more details as to what you can expect, but we did take a deposit today and cleared it onto the trading account in 30 minutes, so that's nice!

Often customers who complain on bitcointalk about delays have triggered some risk system at Gox; I can't go into detail, but let me just say, there are many, many bad folks who want to use the exchange. Some of them happily take their complaints here without explaining that they are using, say, fake documents, or are lying about one thing or another.

I credit Gox with simultaneously wading through these folks and trying to give legit customers a good experience, especially because it can hurt reputation to see these folks in the forums, and of course, given the nature of risk management systems, Gox cannot explain publicly why Jane identity thief in Serbia is not allowed to use the system.

I'm hoping we'll be able to communicate better with new customers and existing ones to sort of settle people down if they're freaking out, and meantime get legit and longtime customer transactions through at high speed; I know that will help. It's tough to watch the price move and be delayed, and have it be working hours in the states, and midnight in Japan.

How will this transition effect withdrawal limits?
Good question. At launch it won't effect withdrawal limits. The history of withdrawal limits has to do with some FinCEN rules about transaction size. We've registered with FinCEN as a seller of prepaid access, they do not distinguish MSBs that sell prepaid access by transaction size, so I would hope we'll see our way clear to increasing these limits or doing away with them.

There's also a risk-mitigation factor -- we'll probably always have a human look at large transactions going out. Think of the different attacks over the last few years and how many would have had little impact if there were systems to block large wallet transfers.

How will this transition effect the verification process?
My hope is that it will drastically improve the process in terms of simplicity, ease of understanding, communication about the process and shortening of wait times. We've been batting around figuring out how to just do it on a video camera live, how awesome would that be?

How will this transition effect users [that] have already gone through the verification process with MtGox?
We are still spot auditing Gox' AML documents to make sure they are up to our promised standards. If they are, (and I have no indication they are anything but excellent), I would expect that users would stay at the same verification level you have now. TL;DR: Hopefully, once is enough.

Will this transition remove the ability to use Dwolla for withdrawals?
No. It is possible we'll have a small delay while we make sure we're comfortable with the Dwolla withdrawal API, we're still talking to the Dwolla folks right now. That said, we want to support Dwolla, and Dwolla wants to work with us, so I don't anticipate major changes. I agree that once you've got the accounts set up, the fees at Dwolla are rocking.

Is Peter Vessenes twitchy and high energy?
I think so. I'll ask employees for comments. Update General Response is "yes."

Did Mark sell my personal data to CoinLab without my $#!$ permission?
Quoting Mark: "MtGox did not sell users identities, and acted in the best interest of its users to ensure CoinLab had no access to said data.  None of users private information will be shared with CoinLab until the user accepts CoinLab's ToS on the site. If you choose to never accept CoinLab's ToS, then your data will never be shared with CoinLab."

Will My History be available post transition?
Yes, you'll still be able to log in and see all the same data.

More Coming
Our folks will start slotting in questions here, and I'll respond throughout the day; from here on out, I will try to not respond to other threads about the transition, and just keep everything here, so post away.
Thanks for all the support so far! We're all really excited.

Peter Vessenes
CEO, CoinLab