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Author Topic: Mt. Gox has filed for bankruptcy protection  (Read 5304 times)
Salivan
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February 28, 2014, 01:11:46 PM
 #61

I don't fear fuds or regulators directly, what I fear immensely is that they may scared  away miners. With current  difficulty level it may be death spiral( huge difficulty against low hash rate ). To stop this core developers may be forced to hard fork. This may be the end of fireworks for long time..
But I see also light in the tunnel, but I am obliged to stay silent about that at least temporarily 

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February 28, 2014, 01:12:20 PM
 #62

...
Prohibition. Most drinkers were hobbyholics, not hardened gangsters. Which is why everyone stopped drinking and the price dropped.

Only reason people pay lip service to the law is because we are threatened with jail if we don't. It is very easy to use bitcoin anonymously for those so inclined, and there will always be somewhere in the world where using them is fully legal for those not adverse to relocating. Imagine, living like a king somewhere in SE asia because people in other countries are making you rich by breaking the law. However things go, the next years will be fascinating.

Apples != oranges.  If bitcoin is booze, so is fiat.  Only fiat is legal booze.  Your analogy would be accurate if the prohibition banned gin, while everything else -- vodka, whiskey, saki, etc., remained legal.  If during such prohibition a thriving gin industry emerged, you'd have a point...
Actually, black markets exist for US dollars in countries that have banned them. So yeah, we are both talking apples. Or oranges if you prefer, Oranges are cool people with me.

If you wish to suggest that (black market $ volume) > (legitimate market $ value), I'm afraid I got nothing Cheesy
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February 28, 2014, 01:14:09 PM
 #63

I've only been around since 5 December and I already feel like I've been through the wars.  

haha welcome to the world of bitcoins

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February 28, 2014, 01:15:32 PM
 #64

...
Prohibition. Most drinkers were hobbyholics, not hardened gangsters. Which is why everyone stopped drinking and the price dropped.

Only reason people pay lip service to the law is because we are threatened with jail if we don't. It is very easy to use bitcoin anonymously for those so inclined, and there will always be somewhere in the world where using them is fully legal for those not adverse to relocating. Imagine, living like a king somewhere in SE asia because people in other countries are making you rich by breaking the law. However things go, the next years will be fascinating.

Apples != oranges.  If bitcoin is booze, so is fiat.  Only fiat is legal booze.  Your analogy would be accurate if the prohibition banned gin, while everything else -- vodka, whiskey, saki, etc., remained legal.  If during such prohibition a thriving gin industry emerged, you'd have a point...
Actually, black markets exist for US dollars in countries that have banned them. So yeah, we are both talking apples. Or oranges if you prefer, Oranges are cool people with me.

If you wish to suggest that (black market $ volume) > (legitimate market $ value), I'm afraid I got nothing Cheesy
That's really quite irrelevant in this case. The value of black market dollars are higher than legal dollar markets. It will be the same with bitcoin if some countries ban it.

There is no bubble.
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February 28, 2014, 01:17:46 PM
 #65

I don't fear fuds or regulators directly, what I fear immensely is that they may scared  away miners. With current  difficulty level it may be death spiral( huge difficulty against low hash rate ). To stop this core developers may be forced to hard fork. This may be the end of fireworks for long time..
But I see also light in the tunnel, but I am obliged to stay silent about that at least temporarily 
That's not how mining works. If difficulty drops people with currently outdated equipment will get back into the game. The keyword is equilibrium. There is no such thing as too high or too low hashrate.

There is no bubble.
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February 28, 2014, 01:18:53 PM
 #66

...
Prohibition. Most drinkers were hobbyholics, not hardened gangsters. Which is why everyone stopped drinking and the price dropped.

Only reason people pay lip service to the law is because we are threatened with jail if we don't. It is very easy to use bitcoin anonymously for those so inclined, and there will always be somewhere in the world where using them is fully legal for those not adverse to relocating. Imagine, living like a king somewhere in SE asia because people in other countries are making you rich by breaking the law. However things go, the next years will be fascinating.

Apples != oranges.  If bitcoin is booze, so is fiat.  Only fiat is legal booze.  Your analogy would be accurate if the prohibition banned gin, while everything else -- vodka, whiskey, saki, etc., remained legal.  If during such prohibition a thriving gin industry emerged, you'd have a point...
Actually, black markets exist for US dollars in countries that have banned them. So yeah, we are both talking apples. Or oranges if you prefer, Oranges are cool people with me.

If you wish to suggest that (black market $ volume) > (legitimate market $ value), I'm afraid I got nothing Cheesy
That's really quite irrelevant in this case. The value of black market dollars are higher than legal dollar markets. It will be the same with bitcoin if some countries ban it.

You are forgetting that price is directly influenced by demand.  If 99.9% of demand (all but those few backwater countries) vanishes, the price plummets.  Even on those black markets.
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February 28, 2014, 01:19:28 PM
 #67

I don't fear fuds or regulators directly, what I fear immensely is that they may scared  away miners. With current  difficulty level it may be death spiral( huge difficulty against low hash rate ). To stop this core developers may be forced to hard fork. This may be the end of fireworks for long time..
But I see also light in the tunnel, but I am obliged to stay silent about that at least temporarily 

Don't worry.  Megafarms have no choice but to keep mining as long as (data center cost) < (price of the coin mined).  Even hobby miners have preordered gear that is yet to arrive at their door.
Mining ain't stopping any time soon.
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February 28, 2014, 01:20:50 PM
 #68

There are a ton of investors waiting on the sidelines and all they want is some closure to this ongoing drama and for the bottom to be found and the worst priced in before they buy. So any end to the mtgox ordeal is bullish. There may be a short term downwards movement due to panic but ultimately upwards.

Who are these 'ton of investors'? Joe Sixpack turned on the news and thinks Bitcoin is dead. Any financial institution worth a damn won't touch Bitcoin with a 10 foot pole long after the dust has settled. Any present or future business that accepts Bitcoin is a net seller of Bitcoins, so count those out. Emerging markets are already painting it as an elaborate ponzi and in some cases banning it. There is still a ton of stolen coins waiting to be dumped.

The taint of this news will not be washed by some Reddit headline of a donut shop down the street accepting BTC. As far as the mainstream perception goes, Bitcoin has a crapton of PR to do until it can shakeoff this colossal fuckup - the fact that some stupid CEO is actually responsible for it has little meaning outside of the in-the-know folks who are already a part of the Bitcoin community.

I ask you again, who are these 'ton of investors' you speak of?
- Every bear and bull who has sold and is waiting to rebuy.
- The ridiculously overextended short interest on bitfinex.
- Second Market
- Anyone who has become aware of bitcoin in the past 3 months but has been waiting for the boom, bust, and reversal to complete before buying in.
- My followers, who I have had on call about this. They are waiting with large sums of fiat.
- The insane buyers on Bitstamp who drove it up from 400 to 600 and put tons of fiat on the order book.
- The bitcoin bank in cyprus just opened.
- People who will start buying into the new ATM machines
- Any banker or wealthy person who has become aware and is waiting to take a gamble at this when the time is right.
- [ill let some bulls continue this list her, because im actually waiting to rebuy myself, so i wont put too much eeffort]

Screw what Joe Sixpack and Mainstread Media think. They are the ultimate contrarian indicator. Dont you get it? When public sentiment is low is the BEST time to buy. I want to buy low BEFORE public sentiment is good. Once public sentiment is good, prices will be driven up astronomically, and it will soon be time to SELL, not buy.
 
Eventually regulated exchanges in the United States which function like stock markets will be launched. When that happens, people will forget all about mtgox and those will be seen as bitcoin's kindergarten days, before the price blasts into space.

I have two major issues with Bitcoin being something that anyone would want to invest into at these prices:

1) The price has not gone down nearly enough given the recent light of events. The most well known Bitcoin exchange being now synonymous with one of the biggest financial thefts/losses in history is one step shy of the worst possible news that could happen - which is some flaw in the Bitcoin software itself.

2) Not only has Bitcoin's acceptance/breakthrough efforts have been set back significantly but the risk factor has also increased - who knows what will come of this development and the repercussions that governing agencies and others might impose. Such uncertainty, whether anything becomes of it, is still a factor that should weigh on the price because at a moment's notice some FUD could be created out of thin air relating to this situation and drive prices lower, which would be reasonable given the amount of fear in the air.

TLDR: Bitcoin price is still way too high given the calamity of the situation, the new risks now attached, and no foreseeable development in the near term that could entice investors to not 'miss the train'. Investing at these prices, IMHO, is pretty stupid.
Pro tip: Prices are only where they are at because people like you can have an immense fear and make rationalizations about why prices should be at these levels or lower. If the market thought that these prices were reasonable, they would not be here; they would be higher.
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February 28, 2014, 01:25:53 PM
 #69

^The market does not react spontaneously, otherwise stuff like trading and arbitrage would be impossible.  It's adjusting as we speak Sad


It's a temporal world.  Change/time.
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February 28, 2014, 01:26:40 PM
 #70

...
Prohibition. Most drinkers were hobbyholics, not hardened gangsters. Which is why everyone stopped drinking and the price dropped.

Only reason people pay lip service to the law is because we are threatened with jail if we don't. It is very easy to use bitcoin anonymously for those so inclined, and there will always be somewhere in the world where using them is fully legal for those not adverse to relocating. Imagine, living like a king somewhere in SE asia because people in other countries are making you rich by breaking the law. However things go, the next years will be fascinating.

Apples != oranges.  If bitcoin is booze, so is fiat.  Only fiat is legal booze.  Your analogy would be accurate if the prohibition banned gin, while everything else -- vodka, whiskey, saki, etc., remained legal.  If during such prohibition a thriving gin industry emerged, you'd have a point...
Actually, black markets exist for US dollars in countries that have banned them. So yeah, we are both talking apples. Or oranges if you prefer, Oranges are cool people with me.

If you wish to suggest that (black market $ volume) > (legitimate market $ value), I'm afraid I got nothing Cheesy
That's really quite irrelevant in this case. The value of black market dollars are higher than legal dollar markets. It will be the same with bitcoin if some countries ban it.

You are forgetting that price is directly influenced by demand.  If 99.9% of demand (all but those few backwater countries) vanishes, the price plummets.  Even on those black markets.
Not forgetting anything. The price is what it is because the demand is there. Which is to say, the demand for black market dollars is higher than the demand for legal dollars. Another factor is scarcity of supply in such situations.

With bitcoin, the countries with failing fiat economies are the most likely to ban it. Those are also the countries where people will be most desperate to find alternatives to hold their money over fiat. Reduced supply (only criminals have bitcoin) with rising (desperate) demand means the price will stay stable or go up. If it goes up it will spill over into the legal parts of the world in the form of arb. These are basic fundamentals.

There is no bubble.
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February 28, 2014, 01:31:23 PM
 #71

...
You are forgetting that price is directly influenced by demand.  If 99.9% of demand (all but those few backwater countries) vanishes, the price plummets.  Even on those black markets.
Not forgetting anything. The price is what it is because the demand is there. Which is to say, the demand for black market dollars is higher than the demand for legal dollars. Another factor is scarcity of supply in such situations.

With bitcoin, the countries with failing fiat economies are the most likely to ban it. Those are also the countries where people will be most desperate to find alternatives to hold their money over fiat. Reduced supply (only criminals have bitcoin) with rising (desperate) demand means the price will stay stable or go up. If it goes up it will spill over into the legal parts of the world in the form of arb. These are basic fundamentals.

According to your logic, if bitcoin is made illegal, the price of my bitcoin holdings would skyrocket?  I'm off to Washington -- lobbying to illegalize bitcoin so's I can haz filthy rich Cheesy
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February 28, 2014, 01:35:38 PM
 #72

^The market does not react spontaneously, otherwise stuff like trading and arbitrage would be impossible.  It's adjusting as we speak Sad


It's a temporal world.  Change/time.
Gox has been failing for almost a year now.

We started calling it emptygox back in august, when everyone was fleeing via bitcoin because fiat withdrawals were not processing, and at that time Bitstamp because the most important exchange.
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February 28, 2014, 01:36:32 PM
 #73

^The market does not react spontaneously, otherwise stuff like trading and arbitrage would be impossible.  It's adjusting as we speak Sad


It's a temporal world.  Change/time.

Yep and the same thing happened after the China debacle - took about 48 hours until the news really sunk in and people started selling.

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Salivan
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February 28, 2014, 01:36:39 PM
 #74

I don't fear fuds or regulators directly, what I fear immensely is that they may scared  away miners. With current  difficulty level it may be death spiral( huge difficulty against low hash rate ). To stop this core developers may be forced to hard fork. This may be the end of fireworks for long time..
But I see also light in the tunnel, but I am obliged to stay silent about that at least temporarily  
That's not how mining works. If difficulty drops people with currently outdated equipment will get back into the game. The keyword is equilibrium. There is no such thing as too high or too low hashrate.

adjustment is done every 2016 blocks, what if we can't make this far


Don't worry.  Megafarms have no choice but to keep mining as long as (data center cost) < (price of the coin mined).  Even hobby miners have preordered gear that is yet to arrive at their door.
Mining ain't stopping any time soon.

I am not miner myself I have never been. I don't know what kind of mentality they have. Will they persevere in case price plumt suddenly to $50 bucks or will they drop instantly.
Without huge asic players network may experience serious problem lasting to new adjustment point. There may be need to support network for sake of its survival not profit at least in short run

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February 28, 2014, 01:42:27 PM
 #75

wohohoo, now I smell real fear and a touch of desperation!

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February 28, 2014, 01:44:30 PM
 #76

adjustment is done every 2016 blocks, what if we can't make this far
That just means confirmations might take longer for a while. Doesn't matter (except for easily frightened people who don't understand what they have thrown money in, which means cheap coins for the rest of us).

There is no bubble.
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February 28, 2014, 01:56:32 PM
 #77

I don't fear fuds or regulators directly, what I fear immensely is that they may scared  away miners. With current  difficulty level it may be death spiral( huge difficulty against low hash rate ). To stop this core developers may be forced to hard fork. This may be the end of fireworks for long time..
But I see also light in the tunnel, but I am obliged to stay silent about that at least temporarily  

Miners invested in equipment. That's more than electricity. Some get electricity for free or flat. So they'll keep mining.

But you are right - should the price drop extremely low, we may never make it to the next adjustment of difficulty. But frankly I can't see why the price would drop to sub $1 levels. As plausible as gold dropping to sub $1 levels / ounce.



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February 28, 2014, 02:16:22 PM
 #78

Miners invested in equipment. That's more than electricity. Some get electricity for free or flat. So they'll keep mining.

But you are right - should the price drop extremely low, we may never make it to the next adjustment of difficulty. But frankly I can't see why the price would drop to sub $1 levels. As plausible as gold dropping to sub $1 levels / ounce.



The algorithm for Bitcoin Difficulty change is not one way.  If miners stop mining and the number of blocks solved per hours drops below parameters, the difficulty will adjust downward to keep the number of blocks solved per hour within parameters.

Quote
For reasons of stability and low latency in transactions, the network tries to produce one block every 10 minutes. Every 2016 blocks (which should take two weeks if this goal is kept perfectly), every Bitcoin client compares the actual time it took to generate these blocks with the two week goal and modifies the target by the percentage difference. This makes the proof-of-work problem more or less difficult. A single retarget never changes the target by more than a factor of 4 either way to prevent large changes in difficulty.

https://en.bitcoin.it/wiki/Target

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February 28, 2014, 02:25:18 PM
 #79

Guys,

This looks more like a restructure and rebrand now than before...
"Bankruptcy Protection" has some similarities to "Bankruptcy" but there is a huge difference...

http://www.ehow.com/info_8053559_bankruptcy-vs-bankruptcy-protection.html
http://www.differencebetween.net/business/difference-between-bankruptcy-and-bankruptcy-protection/

It is basically a protection from the court to give them time to restructure and remodel and rebrand and re-everything (recode, relocate etc) while investors cannot sue them during that time:
http://www.zalkinrevell.com/bankruptcyprotection.html

So.. think about it, if they are going to rebrand and start new, what is the next step they need to make? this one.

Some evidence:
1. There was a HUGE btc debt erasing for a low $ value in the last weeks of trade on MTGox. (about 350k-400k coins have been erased as debt for a sum of around $63,000,000 - $72,000,000 ($180 per coin).
2. Gox.com redirects to MTGox.com.
3. Gox.com registry shows it was recently changed to the name of Mark Carpeles.
4. Mark said other parties are involved in trying to find a solution to this current problem, its live on mtgox.com
5. It's obvious that not taking a step to save and rescue almost a million MTGox customers can damage Bitcoin severely in the long run, due to more banks not agreeing to work with BTC companies, more regulation straggling Bitcoin businesses, panic from main stream and more. Therefore it is an incentive for big players to intervene.
6. On the document where a rescue plan is discussed and structured, the date for the shut-down of MTGox's website/trade is Japan morning time of the 25th February 25th. The document was released BEFORE the shut down happend, and indeed it was at the time specified.
7. The next step, according to the document is to restructure and Mark to step down.

In my view, the chances of that rescue plan to be happening just got a lot bigger.

Obviously, I might be wrong, and obviously even if a plan IS happening it doesn't guarantee it will succeed.

Anyway, I think you should know and realize that this is (in my opinion) probably what is going on.
We should get a statement on MTGox.com website within a week in my opinion.
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February 28, 2014, 02:32:58 PM
 #80

I don't see how they could ever be successful again, at least as long as the same people are on board. Just more buying time.

There is no bubble.
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