Mt. Gox - and similars - ledgers

[Mitzplik]

Does anyone can tell how Mt Gox and other trade sites prevent the ledger to be fed with false data?

I mean: how do we know that an employee, or the owners, or anyone, are not having false credits for themselves just by creating false lines in their internal ledger?

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[threeip]

Well, we don't. Remember - it's all good till it's not.

[Mitzplik]

I guess your reply was a little enigmatic.

Do you work for or own Mt Gox?
Lets assume I believe you have good faith and you wouldn't do it. But is there the possibility of doing such a thing?
Are the ledgers verified by a third party?

How a wire transfer becomes dollars in my Mt Gox wallet? What are the steps?

[threeip]

Sorry, we as in we-the-customers. I'm not affiliated with or use MtGox at all.

I probably have as much faith in them as the NYSE etc.

"it's all good till it's not" - It's a bit like Schrödinger's Ledgers. No-one seems to/has proof of any tampering at this stage and no-one has looked 'behind the curtain'.

[Mitzplik]

NYSE is heavily audited.

[threeip]

NYSE is heavily audited.

But not by me or you? Trust has to go somewhere.

[kiko]

Fortunately false credits are not accepted anywhere so Mt.Gox will have trouble spending them all.

Seriously though, Possibility? Sure. https://en.wikipedia.org/wiki/Bucket_shop_(stock_market). I don't really see the incentive for tampering either while their real business model is running so smoothly. The only way to know for sure, is to organise an everyone-withdraw-your-money day. But even that costs people money, which is partly why bitcoin was invented in the first place!

Take heart from the fact that market share is levelling out. Soon any tampering would be made much more apparent by looking at data across exchanges.

The biggest risk is still the hack + fake sell scheme that happened back in 2011, it would be worse now because there are so many other places for the attacker to buy bitcoin during the ensuing panic. *related: http://youtu.be/E1xqSZy9_4I?t=1m2s.

[Mitzplik]

The scam would be just like that:

I own mtgox or am i trusted employee, so I create fake accounts with fake credits.

One day I buy thousands of BTC with this accounts and send them to a wallet, or to another trading system, and sell them.

I publish a fake new that "our account is seized" or "Ddos atack" or "we will be out for two days to change our platform" or whatever.


So, as it is with the crypto-currencies, all the security is in the ledger integrity.

I see the answers for my post are not from people who have information about the mt gox (or similars, like bitstamp) system.

I would like to hear if someone has this kind of information.

Im opening a support ticket, too.