Why people are blaming MtGox issues for the price fall?

[caveden]

I've seen many people on these boards attempting to input this recent price fall on MtGox issues.

I'm sorry, but this is just silly. The price fell because too many people sold at once. These were mostly, IMHO, people who had bought bitcoins without even knowing what the hell they were doing - they only saw the price increasing like crazy and decided to get in.

The price soared insanely fast and now it has fallen. This shouldn't be such a surprise.

I'm not trying to defend Gox or anything (although I think that, if you're not satisfied with them, either use someone else or open your own exchange*, instead of complain like a baby that wants everything delivered to him). But blaming them for the price fall is just not fair. The price fell because too many people panicked too easily and started selling, that's all. Blame these chickens who don't get Bitcoin if you want a scapegoat, not MtGox.


* I realize that now it's much more complicated to open your own exchange due to different state rulings, and it's thus impossible for most. But still, if you want to criticize someone for this, it's your government, not MtGox, that you should target.

[1714181370]

1714181370

[1714181370]

1714181370

[1714181370]

1714181370

[1714181370]

1714181370

[Herodes]

great post

[HappyBitCoinUser]

[pera]

lol

[samson]

The price fell because someone dumped a huge amount of Bitcoin onto the exchange which initiated a panic.

At that price point this would be kind of expected as it had risen too high very quickly. There's nothing wrong with that.

Then the exchange started falling behind with massive unacceptable lag times, it went to over an hour at one point.

The lag killed it as people were trading on prices which were one hour old.

This happened because the idiots who run MtGox failed to act when they should have.

They had an exponential rise in new customers along with existing performance problems.

These problems required an urgent fix, there wasn't enough sense of urgency about it.

Hence MtGox failed and made the problem much worse than it could have been if they fixed it quicker.

They scheduled an update for next week, this was the fail, it should have been rushed out and introduced immediately.

[moni3z]

2011 - massive trading engine failure and no monitoring
2013 - massive trading engine failure and overload of servers
2015?

[zedicus]

death of a thousand cuts! ( stop the bot micro trading and the lag and all the bad goes with it! )

[caveden]

The lag killed it as people were trading on prices which were one hour old.

This happened because the idiots who run MtGox failed to act when they should have.

If these Bitcoin holders really wanted to hold Bitcoins, that would be no reason to start selling. And even if it was, they would have already bought back.

No, the price fall has nothing to do with MtGox problems. It has to do with lots of people buying Bitcoin just because it was rising fast, in an attempt to make money out of it. And then selling when they thought it was about time.
It's quite simple actually. Supply and demand. Unless you're claiming that bitcoins' demand is so intimately linked with MtGox health, your argument has no ground. Honestly I see no reason why the demand for bitcoins would be linked to MtGox, it doesn't make much sense. But if it really is the case, then it's even better that this part of the demand disappears and leaves the space to those who want bitcoins because they understand Bitcoin and its potentials, and for those who are actually using it for something else other than a store of value.

[dg2010]

Image of the year.

[Vandroiy]

Gox did not cause the crash last time either. The initial crash even happened before any problems back then.

Not a cool story? Right! That's why people tend to change the order of history when they tell it. They also don't tell that after the hack, prices remained stable for weeks and the bust started for no apparent reason.

What we learn from that: bad speculators make losses; really bad speculators make losses and nonsensical explanations for them.

[SuperHakka]

I agrees with caveden. Peeps here look to blame anything and anybody other than their own investment decisions. human nature suppose. look here dudes, at this stage in bitcoin's life I guess that 95% of the market price is just confidence (or hubris) and 5% is utility value. Anything that puts a dent in that confidence will make the price dive hard. The first falling domino could be anything, ANYTHING! This time round, it was slow servers at Mt Gox. Next time it could be an ISP going down, next time it could be a bad critique in the press. The only way btc will be immune is if the price was 95% utility value and 5% confidence (or hot air). comprende?!??!?

[MGUK]

I don't think it's entirely Gox's fault, but to say they had nothing to do with I think is a bit wrong:

"Indeed the rather astonishing amount of new account opened in the last few days added to the existing one plus the number of trade made a huge impact on the overall system that started to lag. As expected in such situation people started to panic, started to sell Bitcoin in mass (Panic Sale) resulting in an increase of trade that ultimately froze the trade engine!" - from the Gox press release regarding the incident

Even they acknowledge that the failing and lag of their engine caused panic selling which made the situation worse.

They've been around long enough now, and should have made enough money now to pay some experts in HPC, but they haven't. With great power comes great responsibility and I think they're being pretty irresponsible running a system that needs to be shut down for hours to be able to scale up. That's just bad practice.

I agree though, there would have been a crash at somepoint (maybe not as epically) even if Gox hadn't have failed. The growth was too quick to be sustainable and lots of relatively new people buying in who don't understand things anywhere near as much as they probably should - almost like Gox.

[moni3z]

no fees right now so its a bot free for all lol http://bitcoin.clarkmoody.com/

[spartacusrex]

I'm sorry - but i must respectfully say IT WAS IN A BIG PART GOX's FAULT.

I have run, and been part of running MANY sites in my 20 year tech career.

When you have made as many MILLIONS as GOX has out of it's loyal user base, YES, you are entitled to expect a certain level of service.

They CLEARLY did not deliver that service yesterday - and YES they are the largest so what happens to them is DOUBLEY-IMPORTANT for the rest of the markets.

Of course the big bitcoin dump affected the price, but the 1 hour lag, that caused MOST OF THE PANIC, is simply unacceptable.

When I go to a restaurant and I have to wait 3 hrs for my starter, and the Chef tells me -

'..Sorry - we let too MANY people into the restaurant so you're ALL SCREWED as we can't keep up with the orders..' - that's the restaurant's fault..

The simplest option - If their servers can't take it, STOP accepting new users untill they can.

There are many others..

It's a free market, use them if you want - Make them the CENTRALISED bottle-neck, BUT I can assure you, this will happen again and again.

[caveden]

Of course the big bitcoin dump affected the price, but the 1 hour lag, that caused MOST OF THE PANIC, is simply unacceptable.

If it's only a panic caused by such lag, then why haven't the price recovered so far?

It makes no sense to claim that the demand for Bitcoin is a function of MtGox health or competence. Either people want to hold bitcoins or they don't, and that has nothing to do with the efficiency of MtGox. (and if there are people whose decision to hold or sell bitcoins is influenced by MtGox health, then sorry, but these people should not have bought any bitcoin at all - and it's still not MtGox fault that they sold out, but their own)

It's not MtGox that makes the price, it's the people that buy and sell. That should not be hard to understand.

[crazy_rabbit]

Of course the big bitcoin dump affected the price, but the 1 hour lag, that caused MOST OF THE PANIC, is simply unacceptable.

If it's only a panic caused by such lag, then why haven't the price recovered so far?

Because they haven't proven that they have really fixed anything. DDOS protection doesn't work, lag still exists, support doesn't answer questions fast enough (seriously that would go a long way to slow panic, lighting fast support response) no phone number to call. People get paranoid that they have their money in a exchange held together by duct tape. Gox hasn't addressed the real source of panic: faith in Mt.Gox itself.

[Wuji]

Why people are blaming MtGox issues for the price fall?

Because they can't handle the truth!  No seriously Mt. Gox lagged and was DDOS during the rise.  They had nothing to do with the bubble burst.  However, starting yesterday they did help shake confidence and helped pushed things lower.  Perhaps BTC would have settled at $100 had it not been for that.  Doubtful though as I'm thinking the rise starting in Jan was all speculation and BTC is worth $20.  


I think over 50% of this board is constantly wearing a blindfold and has their fingers in their ears.  When you ask for fundamentals all you get is speculation about things that are yet to happen.  They just don't understand that and a currency with a fast changing value is a useless currency and just a commodity.

[vdragon]

And how abouts bots on gox ? thousands of orders at 0.01 and 0.02

[caveden]

Because they haven't proven that they have really fixed anything. DDOS protection doesn't work, lag still exists, support doesn't answer questions fast enough (seriously that would go a long way to slow panic, lighting fast support response) no phone number to call.

Are we still talking about Bitcoin or you've switched to MtGox stocks without warning me?

Seriously... the ability of MtGox to operate should not, by any reasonable, rational analysis, influence in the viability of Bitcoin as an investment - and I'm not even talking as a currency, only as an investment.
If hypothetically so many BTC holders are influenced in their decision to hold or sell by things like MtGox lag or lack of support, then it just shows they have no idea about Bitcoin in the first place, and should probably not be investing in it. And if so many people bought without having any idea of what they were doing, then it was just a matter of time for it to collapse, in spite of MtGox very existence.

Criticize MtGox as much as you want, I don't care. But please wake up to the fact that they do not set the price. Bitcoiners "set" the price, collectively, by buying and selling.

[quantsig]

And how abouts bots on gox ? thousands of orders at 0.01 and 0.02

That sure looks an awful lot like quote stuffing to me.