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Author Topic: What would happen if MtGox is replaced with something like on bitcoin7.com has?  (Read 650 times)
Minsc
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October 22, 2011, 09:27:47 AM
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bitcoin7.com has just this little text that they've been hacked and are slowly returning coins and money back to people.

What if MtGox suddenly has that and it got hacked big and is shutting down.  What would happen to bitcoins?

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October 22, 2011, 09:51:10 AM
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bitcoin7.com has just this little text that they've been hacked and are slowly returning coins and money back to people.

What if MtGox suddenly has that and it got hacked big and is shutting down.  What would happen to bitcoins?

Having an exchange responsible for 90% of bitcoin trading suddenly fold would have an enormous impact on bitcoin.  Many people would lose a lot of money.  Confidence would be shattered.  Sure, another exchange could rise up and fill the void, but would anyone want to use it?  It's also much easier said than done to 'just open another exchange'. 

Many people would be asking themselves 'what's the difference between an exchange getting hacked, and the site's operators stealing all the bitcoins and declaring a shutdown due to hacking?'.

MtGox has been taken down once.  I hope they have 24/7 active monitoring and regular external audits.

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October 22, 2011, 09:54:59 AM
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bitcoin7.com has just this little text that they've been hacked and are slowly returning coins and money back to people.

What if MtGox suddenly has that and it got hacked big and is shutting down.  What would happen to bitcoins?

Ha ha - don't pretend that you don't know the answer.  If that happens bitcoin will be screwed (not only because of the lost confidence, but also because then such a big part of bitcoins would belong to thieves), but MtGox is orders of magnitude bigger then bitcoin7 or mybitcoin or all the other sites, they are not anonymous, they have been checked with hacker attacks before and I believe they've learned their lesson.
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October 22, 2011, 10:08:15 AM
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The same thing that would happen if half of the world's gold were held without participation in markets:

  • Major financial system disruption for a short time
  • Scramble to reassess and engage protective measures
  • Revaluation of remaining functional stock of available units
  • Resumption of business as usual

The concept of a crypto-currency and the implementation of it that is Bitcoin holds enough strength to exist in perpetuity regardless of major setbacks; even Mt. Gox absconding.
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