How did Mt. Gox become so successful?

[Lorenzo]

It seems that even before Mt. Gox collapsed with 850,000 BTC missing, it had a very negative reputation in the community. Other than the fact that they were one of the first exchanges, how was Mt. Gox able to gain such a large market share with such a bad reputation, history of hacks, glitches, lack of support, withdrawal delays, and poor security practices? What exactly did it offer that other exchanges at the time such as BTC-e and Bitstamp didn't (or couldn't)? And if it was so incompetent even before its collapse, why didn't another exchange step up and drive Mt. Gox out of the market? (You know, the way free markets are supposed to work.)

For example, see this thread posted in April 2013 where someone asks why Mt. Gox is so hated (and this was posted when Mt. Gox still had 70% of the BTC exchange market!).

Another thread titled "Why you shouldnt use mtgox ever again" posted in March 7, 2013:

http://bitcointalk.org/index.php?topic=149935

Relevant quote:

The above reasons are just a few probelms i know off hand, mtgox is the leader in btc exchanges execpt they dont act like it and rarely fix anything.  There support honestly sucks, dont know the last time it was even possible to get someone on live chat. I personally used mtgox for many months but as bitcoin grows and gets more users mtgox is just begging for more and more problems.I do understand it takes time to fix some problems but its been months some problems even a year and still nothing has changed. Mtgox just sits and thinks they are the leader in the market and noone else has a chance. I recommened you remove all your coins from mtgox prior to the coinlab transition and use other exchanges, btc-e is okay, bitcoin-24 is another decent option, bitfloor and bitstamp are both quite nice. as more and more users make the switch the price will become better and better and maybe mtgox will relalize they need to step there game up if they want real users.

Video from June 2013 warning users to remove their bitcoins from Mt. Gox:

http://www.youtube.com/watch?v=F4Gcn9xdcOY

Anyone care to explain why this is so? Do market principles no longer apply if you happen to be one of the earliest players in your industry?

[Nrcewker]

that time, exchanges in the world is less, and MtGox has more currencies which make mtgox available around the world

[TriggerX]

Mt.gox was the first few bitcoin exchanges that became popular. As it grew more people went and it attracted many many users. It eventually took the money and ran because of all the bitcoins that were being held by mt.gox

[Lorenzo]

that time, exchanges in the world is less, and MtGox has more currencies which make mtgox available around the world

So Mt. Gox supported more currencies compared to other exchanges? How was it able to do this?

Mt.gox was the first few bitcoin exchanges that became popular. As it grew more people went and it attracted many many users. It eventually took the money and ran because of all the bitcoins that were being held by mt.gox

Just because a company happens to be one of the earliest in its market doesn't/shouldn't give it a license to do whatever it wants. Why didn't the Bitcoin community realize this when the first cracks started appearing and take their money elsewhere?

Was it because of the fact that Mt. Gox being the world's largest exchange made it have higher liquidity/trading volume/market depth than other exchanges at the time? Did whales prefer to trade via Mt. Gox as opposed to other exchanges because they knew that the market there would be able to absorb their buy/sell orders as opposed to other exchanges where the same trades would quickly exhaust the open orders? If so, then that's sad, but that's the only real reason I can think of.

[TriggerX]

that time, exchanges in the world is less, and MtGox has more currencies which make mtgox available around the world

So Mt. Gox supported more currencies compared to other exchanges? How was it able to do this?

Mt.gox was the first few bitcoin exchanges that became popular. As it grew more people went and it attracted many many users. It eventually took the money and ran because of all the bitcoins that were being held by mt.gox

Just because a company happens to be one of the earliest in its market doesn't/shouldn't give it a license to do whatever it wants. Why didn't the Bitcoin community realize this when the first cracks started appearing and take their money elsewhere?

Was it because of the fact that Mt. Gox being the world's largest exchange made it have higher liquidity/trading volume/market depth than other exchanges at the time? Did whales prefer to trade via Mt. Gox as opposed to other exchanges because they knew that the market there would be able to absorb their buy/sell orders as opposed to other exchanges where the same trades would quickly exhaust the open orders? If so, then that's sad, but that's the only real reason I can think of.

I think as it is one of the first exchanges people tested small amounts in mt.gox. After awhile, people started to deposit larger amounts and people thought that it was "safe". This kept attracting more and more users. If mt.gox was say up at the same time as other exchanges were up, mt.gox wouldn't be as famous but since mt.gox was one of the first few exchanges people believed that it was safe.

[Rampton]

It seems that even before Mt. Gox collapsed with 850,000 BTC missing, it had a very negative reputation in the community. Other than the fact that they were one of the first exchanges, how was Mt. Gox able to gain such a large market share with such a bad reputation, history of hacks, glitches, lack of support, withdrawal delays, and poor security practices?

Anyone care to explain why this is so? Do market principles no longer apply if you happen to be one of the earliest players in your industry?

I think they just had the brand name. I remember even before I signed up here and lurked for a few months I never heard any good things about gox and just bad with people complaining how lousy their service was and 99% of users advising others to stay away, but it was the only exchange that ever got mentioned in the media so I think people naturally flocked to it because it seemed the most popular and trusted source to get coins. People were still using it though even when the trouble started.

[Amph]

they were a magic the gathering exchange from what i've read, then they started with bitcoin, and they were the first to do so, magic the gathering was more popular back then, maybe this made this exchnage popular for bitcoin too

[freedomno1]

Easy enough question to answer
At the time it was one of the few bitcoin exchanges in existence and operating as the oldest Bitcoin exchange its where people first started trading so it had the traction and userbase to grow.
It was also the primary channel to funnel money into and out of bitcoin and in turn had the depth and trading volume to represent the market,as a result it was successful in user aquiremnt till it lost** its private keys and collapsed


** Coded improperly cough lie

If you want an old blog post to show you the wonderful assortment of scams check this out
http://www.greycoder.com/the-best-bitcoin-exchanges-of-2012/

If interested in the day things turned sour for Mtgox go back to 2011
March 1   MagicalTux buys mtgox.com from its founder Jed McCaleb

In the timeline of Bitcoin history
https://en.bitcoin.it/wiki/History

[NUFCrichard]

It seems that even before Mt. Gox collapsed with 850,000 BTC missing, it had a very negative reputation in the community. Other than the fact that they were one of the first exchanges, how was Mt. Gox able to gain such a large market share with such a bad reputation, history of hacks, glitches, lack of support, withdrawal delays, and poor security practices? What exactly did it offer that other exchanges at the time such as BTC-e and Bitstamp didn't (or couldn't)? And if it was so incompetent even before its collapse, why didn't another exchange step up and drive Mt. Gox out of the market? (You know, the way free markets are supposed to work.)

For example, see this thread posted in April 2013 where someone asks why Mt. Gox is so hated (and this was posted when Mt. Gox still had 70% of the BTC exchange market!).

Another thread titled "Why you shouldnt use mtgox ever again" posted in March 7, 2013:

http://bitcointalk.org/index.php?topic=149935

Relevant quote:

The above reasons are just a few probelms i know off hand, mtgox is the leader in btc exchanges execpt they dont act like it and rarely fix anything.  There support honestly sucks, dont know the last time it was even possible to get someone on live chat. I personally used mtgox for many months but as bitcoin grows and gets more users mtgox is just begging for more and more problems.I do understand it takes time to fix some problems but its been months some problems even a year and still nothing has changed. Mtgox just sits and thinks they are the leader in the market and noone else has a chance. I recommened you remove all your coins from mtgox prior to the coinlab transition and use other exchanges, btc-e is okay, bitcoin-24 is another decent option, bitfloor and bitstamp are both quite nice. as more and more users make the switch the price will become better and better and maybe mtgox will relalize they need to step there game up if they want real users.

Video from June 2013 warning users to remove their bitcoins from Mt. Gox:

http://www.youtube.com/watch?v=F4Gcn9xdcOY

Anyone care to explain why this is so? Do market principles no longer apply if you happen to be one of the earliest players in your industry?

I used them in 2013 because they were the only Bitcoin exchange I knew of, all bitcoin prices were given from Gox and it was the biggest (and thus in my mind) the best exchange out there.
It was kind of a one time deal for me though, buying at higher prices than everywhere else and not being able to withdraw funds kind of killed it for me.

I think those in the know knew that Gox was dying, but it actually took a long time to actually die.  I think it is probably like Greece's economy now or Leyman brothers in 2007, they are in a bad way, but you kind of think they could somehow get out of it, until the poop hits the fan and it is over.

[mrhelpful]

One of the worst historic events to be in the bitcoin community.

850,000 btc and still the victims didnt get any back? the last time I heard was a court discussion, and even that was taking a such long process due to japanese laws and such.

Its prob the biggest scam pulled over, since everyone couldnt get their coins out.