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Author Topic: What to do when MTGOX gets shut down ? Are we ready for coincalypse ?  (Read 4988 times)
ShadowOfHarbringer
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April 20, 2012, 05:29:15 PM
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It is quite obvious that in (maximum) few years some of world's Governments are going to start perceiving Bitcoin as a threat.

When they do, first thing they are going to try is closing the biggest players (like MtGox, which allegedly is reponsible for 80% of all BTC trade in the world) to force the currency into underground.
Taking megaupload takedown into consideration this scenario is IMHO not only probable, but inevitable.

I wonder, is the market decentralized enough currently to support transition from big players to smaller, local markets ? I mean, shouldn't we all support different (other than MtGox) services so when government shuts it down, devastating effects of the catastrophe will be smaller ?

Government will try to stop Bitcoin, that is only a matter of time. We kind of already know that is going to happen since the beginnings, so why so many people are still using MtGox ?

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April 20, 2012, 05:33:52 PM
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Tragedy of the commons.
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April 20, 2012, 05:41:21 PM
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Bitcoin is used globally.  If what you fear happening occurs, it will be telegraphed well in advance.  It took FinCEN nearly 15 years since the first prepaid debit cards existed to do anything to try to curb their use as an anonymous cross-border money transfer tool (i.e., could take more than $10K out of the U.S. legally if value was on prepaid debit cards).  Nearly a decade passed after the was first identified as a very real problem to the regulators.

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April 20, 2012, 05:52:57 PM
 #4

I think if/when if happens, it'll fall in the category of "really crappy and inconvenient" but not "devastating." Bitcoiners will quite quickly move to other exchanges, though things would be a bit chaotic.

More import than "only using alternatives to gox so as to reduce reliance" is to make sure your financial exposure to Gox is always minimal. This means, don't keep all your BTC (or USD) there. If/when they are raiding, accounts will be frozen. So keep your money safe with yourself., and then the risk of using Gox is largely diminished. Don't let laziness be your excuse for keeping your funds in danger.
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April 20, 2012, 05:57:07 PM
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More import than "only using alternatives to gox so as to reduce reliance" is to make sure your financial exposure to Gox is always minimal. This means, don't keep all your BTC (or USD) there. If/when they are raiding, accounts will be frozen. So keep your money safe with yourself., and then the risk of using Gox is largely diminished. Don't let laziness be your excuse for keeping your funds in danger.

Yup.  When "black friday" (US Justice Dept war on online poker) hit some online poker players had six figures in their online poker accounts.   Some of that is still in limbo a year later.
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April 20, 2012, 06:13:53 PM
 #6

What i mean is that perhaps something more could be done than we are doing now.
We could, for starters, inform all people that there are other exchanges through this forum.

Wouldn't it be in the interest of whole Bitcoin economy to place an ad somewhere on the forum saying "Centralization of currency exchanges is bad for the Bitcoin network. If you are only using MtGox, try using some other exchanges like XXXX, YYYY, ZZZZ" ?

----
And before someone starts accusing me, I am _NOT_ working for any of the other exchanges.
(Actually i planned to start an exchange myself, but the stupid law in my country killed the idea)

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April 20, 2012, 06:34:22 PM
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MtGox doesn't have 80% of of all bitcoin trade, it's of the bitcoin exchange market.

The way to prevent this becoming a single point of failure is to move to smaller exchanges so it's more distributed, this would lessen the impact of such an event.

Lot's of smaller exchanges around the world makes it harder.

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ShadowOfHarbringer
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April 20, 2012, 06:36:58 PM
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OK, since nobody seems to be eager to do anything at all, i will add small ad in my signature.

Its not much, but it is something.

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April 20, 2012, 06:37:46 PM
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What we need is a darknet p2p based exchange.

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April 20, 2012, 06:38:51 PM
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What we need is a darknet p2p based exchange.

That too, but not enough.

"Normal" people will probably always view darknet as the tool of hackers/pedophiles/sociopaths/money launderers/whatever.

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April 20, 2012, 06:40:53 PM
 #11

Free markets are reactive, not proactive.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
ShadowOfHarbringer
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April 20, 2012, 06:43:00 PM
 #12

Free markets are reactive, not proactive.

Is that a rule that is always fixed in space-time continuum, or perhaps people could actually change that if they started working together at least a little ?

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April 20, 2012, 06:48:27 PM
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What we need is a darknet p2p based exchange.

That too, but not enough.

"Normal" people will probably always view darknet as the tool of hackers/pedophiles/sociopaths/money launderers/whatever.

OK just a p2p exchange but if I had it my way the blockchain would be within the darknet too.

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April 20, 2012, 06:49:06 PM
 #14

Free markets are reactive, not proactive.

Is that a rule that is always fixed in space-time continuum, or perhaps people could actually change that if they started working together at least a little ?
It is difficult to change human nature. Noone is really going to care until shit hits the fan since it’s not really worth worrying about it when it is so far in the future, and people believe they won’t be affected anyway.

The thing is, I and others trade on MtGox because they have the best liquidity, because I can trade large quantities without much slippage there. It’s a natural monopoly, and the MtGox market itself is so small and illiquid that it can hardly be justified retracting volume from it.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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April 20, 2012, 06:52:27 PM
 #15

It is quite obvious that in (maximum) few years some of world's Governments are going to start perceiving Bitcoin as a threat.

When they do, first thing they are going to try is closing the biggest players (like MtGox, which allegedly is reponsible for 80% of all BTC trade in the world) to force the currency into underground.
Taking megaupload takedown into consideration this scenario is IMHO not only probable, but inevitable.

I wonder, is the market decentralized enough currently to support transition from big players to smaller, local markets ? I mean, shouldn't we all support different (other than MtGox) services so when government shuts it down, devastating effects of the catastrophe will be smaller ?

Government will try to stop Bitcoin, that is only a matter of time. We kind of already know that is going to happen since the beginnings, so why so many people are still using MtGox ?

I reckon MtGox won't have 80% anymore if they get shut down.

People will stop using them if they shut down, so that takes care of itself.

Government would be dumb (yeah, ok, a distinct possibility) to shut down a big thing they can control like Gox.

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April 20, 2012, 06:52:50 PM
 #16

Simple:  If MtGox gets shut down, I'll start using a different exchange.  There's several others out there, so what's the problem?
ShadowOfHarbringer
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April 20, 2012, 06:54:29 PM
 #17

Free markets are reactive, not proactive.

Is that a rule that is always fixed in space-time continuum, or perhaps people could actually change that if they started working together at least a little ?
It is difficult to change human nature. Noone is really going to care until shit hits the fan since it’s not really worth worrying about it when it is so far in the future, and people believe they won’t be affected anyway.

So i guess we will be waiting until "shit hits the fan" instead doing something (even something small ?).

But what is the harm of actually doing something instead of sitting still and waiting until that happens ?

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April 20, 2012, 06:55:49 PM
 #18

Free markets are reactive, not proactive.

Is that a rule that is always fixed in space-time continuum, or perhaps people could actually change that if they started working together at least a little ?
It is difficult to change human nature. Noone is really going to care until shit hits the fan since it’s not really worth worrying about it when it is so far in the future, and people believe they won’t be affected anyway.

So i guess we will be waiting until "shit hits the fan" instead doing something (even something small ?).

But what is the harm of actually doing something instead of sitting still and waiting until that happens ?
What is the harm in waiting until it happens?
ShadowOfHarbringer
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April 20, 2012, 06:56:58 PM
 #19

Free markets are reactive, not proactive.

Is that a rule that is always fixed in space-time continuum, or perhaps people could actually change that if they started working together at least a little ?
It is difficult to change human nature. Noone is really going to care until shit hits the fan since it’s not really worth worrying about it when it is so far in the future, and people believe they won’t be affected anyway.

So i guess we will be waiting until "shit hits the fan" instead doing something (even something small ?).

But what is the harm of actually doing something instead of sitting still and waiting until that happens ?
What is the harm in waiting until it happens?

Because we could do something, and we do not. Doing something could decrease the future disaster which will happen after they close MtGox.

Simple:  If MtGox gets shut down, I'll start using a different exchange.  There's several others out there, so what's the problem?

The people who lose their money will become a problem.
They will keep going around the internet and ranting that Bitcoin is unsafe because blah blah blah (which is obviously false, but still).

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April 20, 2012, 06:57:17 PM
 #20

I share your sentiment, Shadow, but I don’t believe anything can be done about it since it is less profitable and more difficult in the immediate future to use less liquid and fractured exchanges.

What is the harm in waiting until it happens?
What do you think was the harm with MyBitcoin?

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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