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Author Topic: MtGox is not Forex, THIS IS BITCOIN!  (Read 956 times)
myonlinehandle
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June 21, 2011, 07:09:38 AM
 #1

    First, Kevin is entitled to those buy orders. Bitcoin, and ipso facto it's markets, is supposed to remain free of influence even during events that result from fraudulent orders being placed. That's the point, right? So, if a hacker wants to intentionally destroy an exchange by exploiting it's illiquidity and lack of market depth by placing a fair-sized sell order to crash it's price using stolen funds, and then a third-party wants to take advantage of the cheaper prices with buy orders at $0.01, they can. That's the point of avoiding the Federal Reserve's model of central regulation.
    Most likely, the owner of mtgox was running a scam where he bilked users out of 0.65 percent commission by trading on his own exchange with 500,000 btc in a private account—this is why the owner of an exchange and the sole-recipient of commissions earned through trading shouldn't be allowed to place orders on the market he singularly owns. He was essentially making money out of thin air. Unfortunately for the owner of mtgox, who maintained this acct, the scam wasn't merely the source of his money, it was an entire infrastructure where he also kept his ill-gotten earnings in a virtual bank, not yet unrealized in a personal wallet.dat.
    So, when his personal account was compromised—and an intentionally market-destroying sell-order was placed—it presented a wry problem for the owner of MtGox. People have made money on MtGox, it's a foreign exchange—albeit an illiquid exchange with no market depth (hence: the Crash)—unfortunately for him, those who profited did so by cashing out and turning the financial instrument of the exchange into bitcoins which now lay in their personal wallet.dat files (you don't think because mtgox says you have 200 btc, that you actually have that, do you? Inside the exchange, they are merely "financial instruments" waiting to be cashed out, like Kevin's 650 or so btc, that's how exchanges work, like chips in a casino).
    The owner of MtGox apparently thought the virtual realm of his own exchange was a better place to keep his earnings (as unrealized profits, rather than cashing out). Now, he has a huge incentive to reverse this trade, since he had lost both the infrastructure of his scheme and the unrealized bitcoins made through commission that laid within. He'll never make a cent without violating the no-regulation principles and everything bitcoin used to stand for.
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Denicen
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June 21, 2011, 08:15:48 AM
 #2

Hi Kevin
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