What is the greatest lesson of MtGox?

[bitcoinminer]

Minus the several major GOXXXINGS of all of their customers, they've been pretty reliable.

[keithers]

To move coins that are not used for day trading, into a wallet immediately.  Do not leave excess coins on any exchange

[bitcoinminer]

I would say the greatest lesson has to be the proper way to set up a Ponzi scheme.

Con Man = Confidence Man.  There are still morons on here whom still have confidence in MagicalGoXXX.

[melvster]

Exchange is not a bank!
Never sleep with BTC on an exchange.
Send -> Negotiate -> Move your wallet.
Give preference to trade with more coins types, it becomes easier to exchange and have to where run.

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as
trusted third parties to process electronic payments. While the system works well enough for
most transactions, it still suffers from the inherent weaknesses of the trust based model.
Completely non-reversible transactions are not really possible, since financial institutions cannot
avoid mediating disputes. The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions,
and there is a broader cost in the loss of ability to make non-reversible payments for non-
reversible services. With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would otherwise need.
A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties
can be avoided in person by using physical currency, but no mechanism exists to make payments
over a communications channel without a trusted party.

-- Satoshi Nakamoto

[edok]

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

[DannyHamilton]

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

No need to sue you.

Just be aware of the risks you are taking.  There won't be a lot of sympathy if Coinbase suddenly is unable to deliver on their promises.

The bitcoins belong to them and not to you.  They are no longer "your" bitcoins.  In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to.  You've chosen to trust them to deliver on that a promise.

Keep in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, along with a variety of other situations that could cause them to fail to live up to the promise provided.

You are placing blind faith in an entity with no evidence that they are deserving of that faith. They are not audited, your "deposits" are not insured, and there is little (if any) regulation forcing them to follow any particular "best practices" or "security protocols".

[Jeezy911]

Im still mad karpooples bought a frappacino with my BTCs

[Unacceptable]

LMAO!!!!!!!!! 

[BlockChainLottery]

...
The bitcoins belong to them and not to you.  They are no longer "your" bitcoins.  In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to.  You've chosen to trust them to deliver on that a promise.
...

It's striking sometimes how much similarities it has compared with a bank.

[spooderman]

If you aren't the sole controller of your private keys, you don't have any bitcoins.

[anu]

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

Its easy enough:
http://brainwallet.org/
With a brain wallet, you don't need any backup.

To be extra safe, disconnect your computer from the network (pull the plug) while entering your passphrase. When done, close the browser, delete cookies and then reconnect.

Use your social security number to salt your passphrase.

thats it.

When you have done that, you are in the position that wherever you are, you have access to funds. Even if the govt steals all your assets, throws you in jail a few years and chucks you out on the street naked and bleeding, you can walk into a tailor shop and leave with a $5000 suit.

[btcxyzzz]

if you wanna trade, trade on as many exchanges as possible. it's safer, and it's more effective because of volumes.
if you wanna store, store it on linux, encrypt wallets and do daily automatic backup on some remote machine.

still wonder why so many people left their money at mt gox, i fleed away the moment the problems began...

[Cluster2k]

The first and only lesson:  never keep bitcoins or money at a place you don't control.  The wallet and bankroll of any exchange is a massive honeypot for all the worst the Internet has to offer.  It could all be gone tomorrow without any warning.  Unfortunately that also severely limits the opportunity to trade money for bitcoins and back again.  This is the greatest weakness bitcoin has today.

[T.Stuart]

In my case, don't get blinded by greed.

[DannyHamilton]

...
The bitcoins belong to them and not to you.  They are no longer "your" bitcoins.  In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to.  You've chosen to trust them to deliver on that a promise.
...

It's striking sometimes how much similarities it has compared with a bank.

An unregulated, uninsured, unaudited bank, but yes a bank.

[Armis]

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Possession isn't necessary for ownership. 

Just because you transfer custody of your coins to someone doesn't make the new holders of the coin the new owners, just like when you take your kids to school it doesn't make the teacher the parent.

You entrust your fiat / cryptocurrency to exchanges for the specific purpose they set forth in their agreement -- essentially to safeguard until you have removed it from their system.

[TrailingComet]

Don't store coin in 3 rd party wallets outside your control
Take responsibility for your coins
Spread yr risk by using multiple exchanges and service providers

[DannyHamilton]

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Possession isn't necessary for ownership.  

Just because you transfer custody of your coins to someone doesn't make the new holders of the coin the new owners, just like when you take your kids to school it doesn't make the teacher the parent.

You entrust your fiat / cryptocurrency to exchanges for the specific purpose they set forth in their agreement -- essentially to safeguard until you have removed it from their system.

Bitcoins aren't children.

Bitcoins are a cryptocurrency.  This means that they rely on cryptographic proof of ownership.  That cryptographic proof is provided with a digital signature from a private key that is cryptographically linked to the bitcoin address.  When you "send" bitcoins, what you literally do is digitally sign an agreement that transfers ownership of the value to the controllers of a specific set of private keys.

If you don't have exclusive control of the private keys, then you don't have the bitcoins.

Any time you send your bitcoins to an address where you don't have exclusive control of the private keys (such as MtGox, CoinBase, BitStamp, BTC-E, localbitcoins, etc), you are making a donation to whoever has control of those private keys.

The bitcoins immediately belong to them and not to you.  They are no longer "your" bitcoins.  In return, most of the people who run these websites will offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to.  You need to decide if you trust them to deliver on such a promise, keeping in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, and a variety of other situations that could cause them to fail to live up to the promise provided.

You are not "entrusting your fiat / cryptocurrency to exchanges", you are purchasing a promise.  You are trusting the exchange to deliver on that promise.  There are many untrustworthy individuals and many untrustworthy organizations in the world.  Be careful about purchasing promises from untrustworthy entities.  The promises are often not worth what you pay for them.

[Merchant]

Do not trust any company with a funny name, especially one that is called Magic: The Gathering Online

Unless they actually exchange Magic cards for bitcoin (and vice versa), of course

[taylormcm]

If you plan on holding any coins for the long-term it is best to store them in a paper wallet.

Developers are currently working on an offline paper wallet generator and we need testers! It's built in HTML and JavaScript and is very similar to other paper wallet generators like bitaddress.org and bitcoinpaperwallets.com

There will be many advanced features included in this paper wallet generator, for starters:

- ZIP download for offline generation
- Multiple coin support (BTC, LTC, NMC, PPC, NXT, etc.)
- Security dashboard: Gauge your setup's security level in the hopes of achieving Zero Trust
- Import Keys or Generate your own
- RNG Generation: Entropy collection based on mouse movement
- Batch generation and printing of multiple wallets

Full feature list will be announced, all features may not make it into the initial Beta but they'll all get added before release.

Please sign up at http://www.cryptopapers.com so you can be notified upon BETA release.

Cheers!