Mtgox can only run insolvent!

[Bit_Happy]

MT.Gox is basically when someone gets hit by a car and ends up in comatose. It being held up in life support by other bitcoin exchanges and the community itself.

Pokemon Mark Karapeles is toasted. There is no way he can recover MT.Gox from all those seizures by the Feds. Unless everyone in there mother helps him out. Which no one will do because he single handedly destroy bitcoin image and rep within a week. By blaming it on a protocol issue that everyone in there mother knew 1 year ago. I wouldn't be surprised that he gave hackers "a way" to steal BTCs from others. He threw us all under the bus beside the MT. Gox users.

I hope whatever this Pokemon goes, the BTC community drives him out. Probably the only place he is welcomed is in Antarctica.

Do you have any idea how much money they were making the last half of 2013?
Gox was on a pace to easily make back everything stolen by the USA Feds. The only real question is how much they lost this year, and they claim to have had most in cold storage.
Long Live the Great Gox!  

I agree MT Gox probably made a hand over fist in transaction fees last year. Although the Feds confiscating 5million dollars. Them moving into a hotel. Another company suing them for 75 million dollars. There is no way they have enough to survive.

The question is how much are owed to Gox users and how many will withdraw at that point. If they have 20k worth of cold storage BTC. MT. Gox will be alright.

The 75 million dollars could turn into a small settlement.
They might fold, but...

IMO, their biggest problem isn't money, but reputation.
They had everything needed to maintain dominance and always failed to be even moderately competent (i.e Trade engine lag, user data hack, etc). Pretty sad really.


Gox in happier days:

[1715382185]

1715382185

[1715382185]

1715382185

[AnonyMint]

The OP is very astute on MtGox's impending demise.

But missing is the bigger picture understanding that centralization always leads to this failure. Then the government steps in. Do you not remember the fractional reserve private banking in the 1800s that led to bank runs that led to the creation of the Federal Reserve after JP Morgan had to bail out the USA.

https://bitcointalk.org/index.php?topic=465474.msg5182519#msg5182519

On this issue of having accounts to pay with instead of use BTC base money (i.e. cash), I already pointed out upthread that if I must have a zillion separate accounts, it is going to drive me crazy. I already have too many accounts on the internet to keep track of.

Instead a dominant set of providers would take over and we are right back to VISA, Mastercard, and Paypal again. Nothing gained. Why did we waste our fucking time inventing Bitcoin then.

So I entirely disagree that we need accounts for most things. We can build services that operate on the block chain without needing store funds in an account for those services. We can pay as we go, utilizing the block chain. This is the future.

We need less overhead in our lives, not more. Accounts are proliferated overhead and/or centralizing. We need decentralized freedom.

Also if accounts are holding our balances then they will naturally end up leveraged, i.e. fractional reserves. This is a repeating phenomenon throughout the history of man. We needed accounts when base money was gold, but we don't need them now. Our technology has improved. Money is no longer physical.

To backup our keys without giving a masterkey to a coinbase, we need to have physical copies of backups. Use a Print key or copy to removable memory card. Your software should tell you when to print/copy and store in your physical safe. If you find it more convenient and safe to have coinbase hold your masterkey, then you are giving up your anonymity because they will need to identify you if ever you lose your password.

In practice using 5 minutes or even 1 minute doesn't help as much as you'd expect, because it's still too long to wait in retail. It has a downside in that it leads to more resources wasted on discarded blocks.

As I explained upthread, a design is possible to bring each block chain confirmation down to 30 seconds or less and avoid the orphaned blocks.

Please don't be disingenuous to imply it is not possible. If you are merely stating that no altcoin has yet done such a holistic design, then I agree with you.

[bazzanii]

It's a pity a lot of people still hope that the company won't crash and still buy bitcoins there. they just bury their money in the ground.

[AnonyMint]

It is not unreasonable to speculate that MtGox could be using their apparently intentional manipulations to buy coins cheaply from their own trapped users and then selling them on external markets to generate huge profits. Or just to obtain more coins cheaply to recover losses due to seizures. This could be their strategy to try to become solvent again.

There is potentially insider trading fraud brewing at exchanges. Another attack vector for government regulators in the future ex post facto. Coin taint becomes a serious issue down the road ex post facto.

What users should (but the masses will always be blissfully gullible) be learning from this is that any centralized balances are evil. Placing your balances in the hands of third parties means effectively government has complete control and can destroy the apple-cart with regulation and seizures at-will.

[practicaldreamer]

Placing your balances in the hands of third parties means effectively government has complete control and can destroy the apple-cart with regulation and seizures at-will.

Hold on here Anon - WTF has Govt. had to do with Mt Gox going tits up ?

Nothing as far as I can see - its been the good old (unregulated) free market at work hasn't it  ?

But I agree about trusting 3rd parties [in the absence of regulation] being problematic.

What would a decentralised exchange work like in practice ? How would it be implemented ? Where does Ethereum fit into all this ?

[zipmaster]

Ethereum would allow you to place transactions that work as contacts allowing people to place sell and buy orders directly on the "blockchain". A third party website could offer the service of indexing all such transactions in real time for users to take advantage of them but wouldn't technically be necessary.

[mccoyspace]

Believe it or not, mtgox can easily get out of this mess.   It's its customer that will get burnt.


Just think about this.   No one can currently withdraw USD or Bitcoin from their mtgox accounts now and people are trying to sell their bitcoins at mtgox at a deep discount....  now, what if mtgox create a bunch of dummy accounts on their own exchange and buy up all these bitcoins for its customers at a deep discounts and pays for them with non withdrawable USD back to their customer's accounts?   Then come tomorrow, they announce they are not insolvent and have enough Bitcoins in reserve for everyone to withdraw?   Bitcoins in mtgox will now skyrocket as everyone with these non-withdrawable USDs in their account will have to pay a premium to buy their bitcoins back before and then withdraw them?   Buy low, sell high, suddenly, all of mtgox financial problem will go away.   The only people that will get burnt are their customers. 

Mt. Gox is a cat and rat farm: feed the cats to the rats and the rats to the cats and get the cat skins for free.

[greenalliancegroup]

MT.Gox is basically when someone gets hit by a car and ends up in comatose. It being held up in life support by other bitcoin exchanges and the community itself.

Pokemon Mark Karapeles is toasted. There is no way he can recover MT.Gox from all those seizures by the Feds. Unless everyone in there mother helps him out. Which no one will do because he single handedly destroy bitcoin image and rep within a week. By blaming it on a protocol issue that everyone in there mother knew 1 year ago. I wouldn't be surprised that he gave hackers "a way" to steal BTCs from others. He threw us all under the bus beside the MT. Gox users.

I hope whatever this Pokemon goes, the BTC community drives him out. Probably the only place he is welcomed is in Antarctica.

Do you have any idea how much money they were making the last half of 2013?
Gox was on a pace to easily make back everything stolen by the USA Feds. The only real question is how much they lost this year, and they claim to have had most in cold storage.
Long Live the Great Gox!  

If Gox made that much last year. Why were BTC withdraws limitation or no withdraws at all from the beginning of last year to now. IF Karapeles actually reinvested it back into HIRING the best Attorneys in getting those MSB licenses. He would of made more BTCs in the long run.
All the other exchanges were back online within in a day. What makes Gox special it needs to take a whole month. The issue is probably no BTCs left in there accounts.
Instead in the youtube video. Karapeles seem like he just returned from vacation and enjoying his frap.

[AnonyMint]

Placing your balances in the hands of third parties means effectively government has complete control and can destroy the apple-cart with regulation and seizures at-will.

Hold on here Anon - WTF has Govt. had to do with Mt Gox going tits up ?

Read the OP. Confiscated their coins. Confiscated their bank account. Provided a court system for them to be sued for $75 million. Put regulations that forced them to shut down large portions of their former business.

But I agree about trusting 3rd parties [in the absence of regulation] being problematic.

Regulation can only make it worse. And I am not going to argue with you or explain to you further, because you are a socialist. You will never understand (agree with) the logic.

What would a decentralised exchange work like in practice ? How would it be implemented ? Where does Ethereum fit into all this ?

Cpu-only mining of any altcoin, the decentralized exchange for Bitcoin. Buy a personal computer to exchange fiat for coins. Spend your coins for goods, do not go back to dying fiat.

Or sell some good or service for coins.

Or do a decentralized exchange of Bitcoin for an altcoin, i.e. use Bitcoin's centralized exchanges.

However the problem with centralized exchanges is mostly due to people storing balances in them. If you just pass through quickly, they for the most part only present a problem to anonymity due to their compliance with AML and KYC regulations.

Regulation makes the market predictable and acts to stabilize value.

Incorrect. Regulation makes everything less predictable because fitness is stomped on, e.g. Mt.Gox fiasco caused by regulation. Rather it is the liquidity (market cap and velocity) that make a currency predictable and stable. It may be that those have always been seen together in the past, thus people conflate them. But it doesn't mean an decentralized regulation of order (i.e. Proof-of-Work) couldn't become deep and liquid and fitness isn't stomped on because the degrees-of-freedom are unlimited still, thus being stable and reliable.

[AnonyMint]

Government and banks took them down by his own admission.

http://www.wickedfire.com/shooting-shit/179038-my-conversation-mark-karpeles-mtgox-2.html#post2164682

[11:58] <JonWickedFire> Do you think if it were regulated it would make it easier to work things out?
[11:58] <MagicalTux> partially
[11:58] <JonWickedFire> How so?
[11:59] <MagicalTux> well, first avoid being blocked by banks and governments around the world
[11:59] <MagicalTux> if regulated, it means that as long as you follow the regulations you're fine

[greenalliancegroup]

He is done for. He is going to be mining a lot coal at this point to pay everyone back. Unless he wins the lottery that 400 million dollars. he will never have a penny to his name.

[boumalo]

He is done for. He is going to be mining a lot coal at this point to pay everyone back. Unless he wins the lottery that 400 million dollars. he will never have a penny to his name.

He could easily have some BTC hidden

I am not sure that he will be legally forced to payback mtgoc clients with his money if he is not convicted, he will probably be convicted though