Mt. Gox "offline" with bitcoin worth $375m down with it


#1

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#2

I'm a trifle surprised that they made it as long as they did. Bitcoin may be architecturally sound; but, with the exception of some of the starry-eyed techno-utopian crypto nerds, the people and institutions around it give off that strong 'you are now swimming with the sharks' odor...


#3

There's an old adage...fool and his money...something something...

With traditional currencies manipulated and fortunes wiped out each and every day by people far more nefarious (ahem Wall Street) than some who might operate in the world of bitcoin, I have to say it leads me to another adage...

the devil you know.


#4

About 2 years ago I was ready to get on the bitcoin train and created an account with Mt Gox, which seemed to be the biggest and best place to get started.

Not a week in it was hacked and my account was compromised. I was just glad I didn't end up buying any coins, even if they would have appreciated nicely since then.


#5

I hate to say I told you so but, oh, wait, no I don't.


#6

I have a bitcoin address but I only go to the sites that give you free bitcoins (watch a video, get a part of a bitcoin) with it. I see it as a type of stock. You can invest in it and it might go up or might go down. As it is currently, there is no way it can replace the dollars and euros and such that are currently out there.


#7

Seems a big part of the problem is that so much was centralized in one place. This is a recurring theme with various services on the internet - back in the day, when every institution ran its own e-mail, and people used their ISPs accounts, a server glitch meant a few hundred or maybe thousand people lost access for a bit. Nowadays, gmail goes down for half an hour, and it's a global catastrophe.

The internet is designed around decentralization, but companies trying to make money off of it are all about the opposite. Making them ripe targets for hackers, and making accidental problems far bigger than they otherwise would be.

Luckily, the web has still managed to be mostly distributed, with lots of competing service providers, so one system going down doesn't make the whole Internet unusable...


#8

The "problem" is that nerds wanted it to be everything at once versus what it was good at, and they claimed that speculation is a "good thing", because... it'll be worth more money and make them rich, which really isn't what BTC is good for.


#9

Does anyone have technical details on how the coins were lost/stolen? Did the private data get lost?

If BitCoin value crashes, that's probably OK. The point (in my mind) was to be an online payment system, not an investment vehicle.


#10

I don't really understand why people were keeping their wallets in exchanges like Mt Gox. BTC can be stolen in the same way gold or cash can be nicked from a vault.

As one of my colleagues put it, putting BTC in an exchange is like hoarding cash under someone else's mattress. Someone they didn't really know, along with many, many other people's cash, making them prime targets.

If you are going to invest in BTC for the long term (rather than use it for exchange) you are better off keeping in secured local storage.


#11

Interesting and convenient for them, that in their Liabilities, they value BTC at 160USD, 33% their current market value.


#12

Full disclosure: I own no bitcoins and don't plan to get any. I'm neutral on the concept of crypto-currencies.

I notice, that in the wake of this news, Bitcoins are down 17% and holding steady at around $500. Similar things have happened recently after Silk Road imploded, or this or that cache of millions of dollars' worth of Bitcoins got stolen: the price dropped sharply but not through the floor. In other words, it behaved more or less like you'd expect a stock or commodity or currency to in a minimally healthy market.

So if Bitcoin ideologues (e.g., people who care about the concept on privacy grounds over and above the profit they're hoping for) are looking for a reason to feel better, I'd say there's at least first-pass evidence that Bitcoins have graduated from "100% pure uncut speculation" to "lousy investment," a distinction with an enormous difference. I still think that Bitcoins are going to be the last major failed cryptocurrency rather than the first successful one, but in a way this seems like a hopeful sign.


#13

The main problem is that it took forever to get money out of them even if you just wanted to convert BTC to USD. We mined a bitcoin a while ago, and sold it before Christmas at about $1000. We still haven't got that money, and by the looks of it we never will.

(Not that I'm surprised. Electricity was fairly cheap and it was more of a gamble.)


#14

Keep in mind that the centralization is not part of the technology platform.

I have no strong feeling about Bitcoin as a currency (but if informed people want to speculate with it, that's fine by me, but they should know what they're getting into), but as a method of creating systems of non-centralized, distributed trust the platform has merit, and I think we'll see interesting things come out of it. IMO the main interesting thing about Bitcoin is precisely this. There is no need for centralization -- in fact, the system works much better without it, as a concentration of computational power actually opens it up to manipulation and other nefarious things (this has to do with how blocks are accepted into the chain, but the specifics of which are probably beyond the scope of a random forum posting).

At its most basic level Bitcoin is a technology that could actually be used to help
ensure that decentralization remains a feature of the Internet. Much has been written about the currency aspect of Bitcoin, but most the folks who are thinking/pondering/working in the space are actually trying to figure out how the technology can be extended to be brought to bear on other, worthwhile problems. When I first got on the Net it was all computer information and NASA sites. The Net became what it did because a lot of people asked "hmm, what else can we do with this?" And that's happening now with Bitcoin. What will ultimately come from it? It's hard to say, and it's possible that the world doesn't really have an appetite for distributed crypto-currencies, but my guess is that some interesting things may come from it regardless.

The centralization you see says more about people than it does about the actual technological platform. As a rough analogy: the fact that Amazon more-or-less dominates the book market has nothing to do with the web's technology and a lot to do with how people buy things and a lot to do with base economics that have nothing to do with "on-line." In theory the net is a democratization of information; in practice this democratization is often irrelevant given our disposition to forming herds.


#15

Who could possibly have seen this coming?


#16

Bubbles are full of hot air, film at eleven


#17

speculation a good thing...where have I heard that before? (cough Wall Street cough)


#18

But unlike a stock. You can't cash out quickly.


#19

The founders & that $375m are on their way to mootxico as we speak:money_with_wings:


#20