Now we have 750,000 less bitcoins in circulation ?

[EuroTrash]

750k is not inconceivable. What is inconceivable is that a significant portion of those "coins" were highly liquid. I agree that if the numbers are that high, it is largely in part due to the use of Gox as a web wallet. The fact that Gox was an exchange is not evidence in and of itself that all coins held there were readily available on the market. Just take a look at the order books -- it puts things in perspective.

If only a smaller fraction of these coins were liquid (say, 100k), then the remaining 650k were for holding, presumably using Gox as a wallet.  

I still can't imagine that 6% of all coins have been held at gox, at a time when everybody should have known for month what kind of company they are dealing with.

You'd be surprised. Until April 2013 I kept a good amount of coins in Gox. A workmate of mine has all of his stash on Stamp as of today.

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[MAbtc]

750k is not inconceivable. What is inconceivable is that a significant portion of those "coins" were highly liquid. I agree that if the numbers are that high, it is largely in part due to the use of Gox as a web wallet. The fact that Gox was an exchange is not evidence in and of itself that all coins held there were readily available on the market. Just take a look at the order books -- it puts things in perspective.

If only a smaller fraction of these coins were liquid (say, 100k), then the remaining 650k were for holding, presumably using Gox as a wallet.  

Now these holders are no longer holding.  So I would imagine that some of them would purchase new coins to replace the ones they thought they had.  If we imagine that even 20% would be replaced with new purchases, then this represents an additional demand for 130k coins.  

Do you agree?

Specifics are very difficult, but generally, sure. Now the question is how that is mitigated by the latter two points I raised earlier. This doesn't happen in a vacuum.

[fatnlovelyfred]

How 750,000 butcoins can just vanish? If it is a hack and someone has tolen it then there is someone who now own it and probably in future he'll use it. Maybe it's a time to try to figure out (I don't know how exactly) who is the new master of the coins? Maybe he'll show himself by using his coins and we'll see it in blockchain ?

[cr1776]

750k is not inconceivable. What is inconceivable is that a significant portion of those "coins" were highly liquid. I agree that if the numbers are that high, it is largely in part due to the use of Gox as a web wallet. The fact that Gox was an exchange is not evidence in and of itself that all coins held there were readily available on the market. Just take a look at the order books -- it puts things in perspective.

If only a smaller fraction of these coins were liquid (say, 100k), then the remaining 650k were for holding, presumably using Gox as a wallet.  

I still can't imagine that 6% of all coins have been held at gox, at a time when everybody should have known for month what kind of company they are dealing with.

I am surprised people didn't know better too - but think about the number of coins kept at mining pools when for years there have been examples of pools having the wallets emptied or going bust due to bugs.  And yet, miners still keep BTC at the pools!  They should at least have an auto-payout at 0.1 BTC or use instant payout pools.

:-)

edit: e.g. bitclockers, slush (vps web host inside job they thought), Hashcows etc...it has been an ongoing problem for years.

[Frankie]

750k is not inconceivable. What is inconceivable is that a significant portion of those "coins" were highly liquid. I agree that if the numbers are that high, it is largely in part due to the use of Gox as a web wallet. The fact that Gox was an exchange is not evidence in and of itself that all coins held there were readily available on the market. Just take a look at the order books -- it puts things in perspective.

If only a smaller fraction of these coins were liquid (say, 100k), then the remaining 650k were for holding, presumably using Gox as a wallet.  

I still can't imagine that 6% of all coins have been held at gox, at a time when everybody should have known for month what kind of company they are dealing with.

I dunno, speaking as someone who bought my few coins at about $5, and didn't bother to withdraw remaining loose change at Gox and other exchanges, then ignored bitcoin for a year, it wouldn't surprise me if many of Gox's customers bought some coins for fun/drugs years ago, and haven't really paid attention to how flaky Mt.Gox has been.

For that reason, I wouldn't expect a large proportion of Gox account-held-BTC owners to rebuy. They're not going to think "damn it, the $200 in coins I bought 2 years ago could have bought me a new car--now I'm going to chase after $500 BTC!" They'd probably think more along the lines of "easy come, easy go."  That's certainly what I would have done if I hadn't withdrawn almost all my goxBTC in late January.

[xandriel]

According to some reports 100,000 of the coins belong to Gox, and 345,000 belonged to Mark.
It is a nice thought that they stuffed themselves...if it were true

[derpinheimer]

According to some reports 100,000 of the coins belong to Gox, and 345,000 belonged to Mark.
It is a nice thought that they stuffed themselves...if it were true

My ass he owned 345k bitcoin and didnt do anything with him

If he did.. wow.

[Grinder]

For that reason, I wouldn't expect a large proportion of Gox account-held-BTC owners to rebuy. They're not going to think "damn it, the $200 in coins I bought 2 years ago could have bought me a new car--now I'm going to chase after $500 BTC!" They'd probably think more along the lines of "easy come, easy go."  That's certainly what I would have done if I hadn't withdrawn almost all my goxBTC in late January.

If they thought like that it means they were going to sell them, which would push the price downwards. Their loss translates into a higher bitcoin price even if they don't rebuy.

[Rygon]

If Gox tells us truth, it means that there were up to 1.75M of phantom non existing bitcoins circulating in active trade during recent years.
Now they are vanished and we only have real existing bitcoins on exchanges (I hope).

Guess what would happen to the price soon?

I think they will not put bitcoins soon they will wait and slowly put these stolen Bitcoins to market.

I mean that coins were stolen long time ago and were probably already cashed out.
The point is that Gox traded virtual non-existing coins and now bitcoin market is notably contracted. There is much less coins for sale than it was expected a few weeks ago.

Totally agree. The question isn't whether or not there will be an impact on the market due to this fractional reserve collapse, but how big the impact will be. Even if all those coins weren't up for trade at the moment Gox went down, they were still considered available by the owners to pay for life's little expenses like lawyers and plane tickets to fly to Japan and protest.

The owners of a majority of those coins are in a tough spot, since we can assume at least a certain percentage will want to buy back into bitcoin while prices are still relatively low compared to a few weeks ago. I think we are seeing the beginning of that trend now as fiat transfers arrive. The market is now even more vulnerable to manipulation though, which should scare bulls and bears.

[antimattercrusader]

Has it been confirmed that they were not all stolen at once recently and thus sitting in on someone with unknown intention's wallet?

I hope it was stolen by many over time, or lost, or anything but above... but was wondering if there is an update I have not heard?

[gollum]

People paid real money for fake bitcoins. I suppose gox still has loads of fiat on their bank accounts. Isn't it?

And people lost their real money as well, so they have lost some of their purchasing power.
Some people had huge amounts of dollars or bitcoins at mtgox, purchasing power that is gone now.
Even if they want to buy the same amount of "real" bitcoin they have to work hard and save dollars to buy bitcoin again, it takes time.

[Siegfried]

Has it been confirmed that they were not all stolen at once recently and thus sitting in on someone with unknown intention's wallet?

I hope it was stolen by many over time, or lost, or anything but above... but was wondering if there is an update I have not heard?

I think this convincingly argues that the biggest part of this theft must have happened long ago.

http://falkvinge.net/2014/02/28/the-gox-crater-crowd-detectives-reveal-billion-dollar-heist-as-inside-job/

[Peter R]

Has it been confirmed that they were not all stolen at once recently and thus sitting in on someone with unknown intention's wallet?

I hope it was stolen by many over time, or lost, or anything but above... but was wondering if there is an update I have not heard?

I think this convincingly argues that the biggest part of this theft must have happened long ago.

http://falkvinge.net/2014/02/28/the-gox-crater-crowd-detectives-reveal-billion-dollar-heist-as-inside-job/

I wrote up what I thought happened in narrative form here: https://bitcointalk.org/index.php?topic=497289.0  and it shares similarities with the falkvinge article.  I think most of the coins were already gone sometime around June 2011. 

[solex]

Has it been confirmed that they were not all stolen at once recently and thus sitting in on someone with unknown intention's wallet?

I hope it was stolen by many over time, or lost, or anything but above... but was wondering if there is an update I have not heard?

I think this convincingly argues that the biggest part of this theft must have happened long ago.

http://falkvinge.net/2014/02/28/the-gox-crater-crowd-detectives-reveal-billion-dollar-heist-as-inside-job/

I wrote up what I thought happened in narrative form here: https://bitcointalk.org/index.php?topic=497289.0  and it shares similarities with the falkvinge article.  I think most of the coins were already gone sometime around June 2011. 

I liked your write-up Peter, but what happened to the 424242 coins. Are they still largely untouched?