So what happens to all of the bitcoins if MTGOX were to go completely under and cease to exist...is it the equivalent of burning piles of money that will simply disappear from circulation never to be seen or replaced again?
Not if but WHEN Gox goes out of business the entire bitcoin community will most likely take a short term hit. Same as we see happening right now anytime Gox comes out with bad news.
Long term it's good for bitcoin and needed. Bitcoin is past the stage of being able to have exchanges that are ran by ameautures, bitcoin needs professional and well exchanges to meet up with the demands of people.
Now if youre asking what happens if Gox goes under and people don't get their bitcoins back. That means either the bitcoins are lost forever, OR someone at Gox still has access to them and is lying. Number 2 is more likely if it was a case of people never getting their btc back.
