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Author Topic: When they roll-back the trades, where will the missing coins come from?  (Read 2182 times)
Bit_Happy
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June 19, 2011, 07:40:39 PM
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The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST)....

We don't know how many people made quick transfers out of MtGox.
When they roll-back the trades, where will the missing coins come from?   Huh

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Andrew Vorobyov
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June 19, 2011, 08:42:09 PM
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It's in their dreams.... )))

They have 2 ways to do it..

Just restart system and continue...

Make investigation and reimburse losses out of their own pockets...

Or simply close down...

Of course they can don't pay losses but people will abandon this place after it..

NB... Roll back Smiley so what - after each hack we will have roll back SmileyHuh



coined
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June 19, 2011, 08:50:53 PM
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I was assuming they would pay out of there own pockets for the coins already withdrawn,
 mind you that could be alot of money depending how the limits work. how does the $1000 a day withdraw limit work if 1 bitcoin was worth $0.01 anyone know? or is it some sort of weighted average over days.
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June 19, 2011, 09:30:55 PM
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how does the $1000 a day withdraw limit work if 1 bitcoin was worth $0.01 anyone know? or is it some sort of weighted average over days.

Good question Smiley After reading their article I didn't realise that $1000 could be 100000BTC.. But he tried to withdraw them after buying them back, so the price should be allready up a little at that time.

Is this helpful? Say thx to 17JgJ4i9ngcxkzpyjooUkY559AegZk5agK  Smiley
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June 19, 2011, 09:46:01 PM
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There has been an official statement that very few coins were withdrawn before the site was taken down. That is great news.

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bitcoinaddict
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June 19, 2011, 11:05:28 PM
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There has been an official statement that very few coins were withdrawn before the site was taken down. That is great news.

How many is very few?  When you're talking about a million BTC that they probably have in their system, very few could be 10,000!

Who is going to pay for those?  Where will they come from?  If everyone tried to withdraw BTC tomorrow they wouldn't have enough!

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Bit_Happy
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June 20, 2011, 03:43:21 AM
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There has been an official statement that very few coins were withdrawn before the site was taken down. That is great news.

How many is very few?  When you're talking about a million BTC that they probably have in their system, very few could be 10,000!

Who is going to pay for those?  Where will they come from?  If everyone tried to withdraw BTC tomorrow they wouldn't have enough!

The $1000/day withdraw limit will stabilize the situation. IMO. Their reputation needs mending, but it is not the death of MtGox; They are still #1, and the only super-high volume exchange.

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June 21, 2011, 11:43:30 AM
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From nowhere. We have just witnessed the unintentional creation of the first fractional reserve bitcoin bank.  Wink

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Chucksta
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June 21, 2011, 12:13:10 PM
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There has been an official statement that very few coins were withdrawn before the site was taken down. That is great news.

How many is very few?  When you're talking about a million BTC that they probably have in their system, very few could be 10,000!

Who is going to pay for those?  Where will they come from?  If everyone tried to withdraw BTC tomorrow they wouldn't have enough!

The $1000/day withdraw limit will stabilize the situation. IMO. Their reputation needs mending, but it is not the death of MtGox; They are still #1, and the only super-high volume exchange.

They also don't have extortionate transaction charges for transferring funds to non US banks, unlike TradeHill

We will probably have TradeHill packed full of all the north American traders, and MT Gox will have everyone else.

Anyone know of an exchange with sensible transaction charges, besides MT Gox ?
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June 21, 2011, 12:26:44 PM
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They also don't have extortionate transaction charges for transferring funds to non US banks, unlike TradeHill


Really?

Knew there had to be a 'nigger in the woodpile' somewhere there beneath all the hype and gloss.

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Chucksta
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June 21, 2011, 01:35:35 PM
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They also don't have extortionate transaction charges for transferring funds to non US banks, unlike TradeHill


Really?

Knew there had to be a 'nigger in the woodpile' somewhere there beneath all the hype and gloss.

!!! not from south Carolina are you ?
cryptoanarchist
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June 21, 2011, 01:45:01 PM
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I keep hearing this claim that "some people withdrew their bitcoins after buying them for $1"

I don't know how that is possible considering when I tried to withdraw they didn't send for a day. All those transactions are just on their site, but I doubt very much money left.

That said, after watching the mtgox guys on youtube, I'm definitely more inclined to use their competition.
Horkabork
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June 21, 2011, 01:48:30 PM
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The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST)....

We don't know how many people made quick transfers out of MtGox.
When they roll-back the trades, where will the missing coins come from?   Huh

Well, let's see. There's a $1000 limit. There are 60,000 accounts. I'd wager that less than half of those accounts transferred anything out. Hell, probably less than 10%. On Mt. Gox's best trading days in the millions of USD, they still only had a volume of like $30 per account, on average. Only a fraction of those 60,000 are "active users". Even less were even around to have the opportunity, as it was a holiday and a weekend.

Of those that did transfer out, several still have balances at Mt. Gox that will cover part or all of the transfer. For example, if you had $1500 and transferred $1000, after the rollback, your account will be $-500.

A small fraction of those who end up with negative accounts will pay back the transferred money. MagicalTux said they weren't going to do chargebacks, it's just that your Gox account will go negative and I assume you wouldn't be able to trade there anymore until you deposited.

However, the $1000 in transferred bitcoins after the crash could now be worth like $5k-$10k. I think I remember that the 1-cent bidder transferred 600-something bitcoins, so he's likely the maximum single account transfer value besides the hacked account.

At flat maximum based on that last point alone, then, Mt. Gox could be paying up to $600 Million for the rollback, not including whatever reconciliation they might pay to those who were screwed by the rollback.

More realistically, the average loss due to transfers was probably $200 or less per transferring account, and likely less than 3,000 accounts (5%) did a transfer covered by the rollback period that resulted in a negative account balance. That's $600k USD of losses to Mt. Gox.

Yep. That's all just wild shots in the dark, but $600k USD is 2 months of Mt Gox's cut during heavy trading. They probably have that in their profit coffers.

So that's where the missing money will come from, no need for a fractional reserve.

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Bit_Happy
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June 21, 2011, 05:54:37 PM
 #14

I keep hearing this claim that "some people withdrew their bitcoins after buying them for $1"

I don't know how that is possible considering when I tried to withdraw they didn't send for a day. All those transactions are just on their site, but I doubt very much money left.

That said, after watching the mtgox guys on youtube, I'm definitely more inclined to use their competition.

YouTube of the owners, I will search for the link now.
Should be this one, starts out really slow.
http://www.youtube.com/watch?v=JtWm7ivZfg4

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Dude65535
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June 21, 2011, 06:42:27 PM
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YouTube of the owners, I will search for the link now.
Should be this one, starts out really slow.
http://www.youtube.com/watch?v=JtWm7ivZfg4
Adam Barr is just an employee. Mark Karpeles (MagicalTux on the forums and IRC) the owner was busy working on the site.

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