Mt. Gox Disappears

[imoldernu]

Bitcoin has dropped in value from $1200 to $496. Was Mt. Gox really a mountain, or just a pebble?
Two sides to every story.

What was once the world's largest trading platform for bitcoins is now a blank page.
The Bitcoin-trading website Mt.Gox was taken offline late Monday, putting at risk millions of dollars put there by investors who gambled on the digital currency.

The news frightened Bitcoin investors elsewhere, knocking the price down about 3% to $496 -- its lowest level since November.
For now, there's no telling what's behind the shutdown. However, an unverified document called "Crisis Strategy Draft" that is being circulated online claims Mt.Gox has lost 744,408 of its users bitcoins, worth nearly $367 million. It also claims Mt.Gox is planning to rebrand itself as Gox.
Mt.Gox has been mired in problems ever since Feb. 7, when it halted withdrawals from its trading accounts. The company's computer programmers hadn't accounted for a quirk in the way Bitcoin works, allowing cyber attackers to dupe Mt.Gox with a scheme resembling receipt fraud. When Mt.Gox discovered it was under attack, it stopped any investors from pulling their money out of their trading platform -- but it has yet to allow them access to their money.

Mt.Gox site disappears, Bitcoin future in doubt - Feb. 25, 2014

Might want to take a look at Bitstamp... another exchange that has had some problems, but is still trading.

A more extensive "warning" and explanation here...

http://www.marketwatch.com/story/regulator-to-sound-alarm-on-bitcoin-2014-02-24?link=MW_latest_news

and one more.... malware "Pony" stealing bitcoin wallets.

 

[Koolau]

Once again, it would seem that my dinosaur tendencies have been to my advantage. I try to avoid technologies and "new" concepts that I can't explain to a 4th grader. Thus, I don't own an I-phone (nor and I-pod), nor have I any interest in Bitcoin. I'm sure my Luddite ways have cost me (and probably more than money) but I don't feel deprived nearly as often as I feel relieved. YMMV

 

[imoldernu]

MSNBC stated that Mt. Gox represented 6% of the bitcoin limit of 21 million.
It appears that this is a situation in flux, and may be an ongoing story for the foreseeable future.

 

[HFWR]

Once again, it would seem that my dinosaur tendencies have been to my advantage. I try to avoid technologies and "new" concepts that I can't explain to a 4th grader. Thus, I don't own an I-phone (nor and I-pod), nor have I any interest in Bitcoin. I'm sure my Luddite ways have cost me (and probably more than money) but I don't feel deprived nearly as often as I feel relieved. YMMV

Well, the 4th grader probably knows more about new tech than we do...

As for [-]tulips[/-] bitcoin, no thanks!

 

[ls99]

What the heck is bitcoin, gox? And why should I care?

 

[Chuckanut]

Not to worry, I used my Bitcoins to buy a bridge in Brooklyn. I collect a toll from everybody who crosses it. I expect the first check any day now.

 

[imoldernu]

Recommended reading: Silver Skates:
"The Hero of Haarlem"

 

[karluk]

Here is another bitcoin article on Marketwatch. It contains some rather heartrendering accounts of the enormous losses some people have apparently suffered. I certainly can sympathize, but my primary reaction is, "What on earth were these people thinking?".

Over at Reddit, there were plenty of battle scars and tales of woe at the ‘Gox horror story thread: How much did you lose?’ One user of the social platform, calling himself goxloser posted this several hours ago: “I am the biggest loser at 4700+BTC, offering up a screenshot of his account a few days ago. “I don’t know how dying feels, but I’m pretty sure that’s how I feel now,” goxloser said to responses estimating he lost over $2 million worth of bitcoin. (MarketWatch can’t verify the stories or identities of the Reddit users.)

Another Reddit user with the handle ebass, said that “144 BTC and 100 were entrusted to me by a friend because he wanted to get into cryptocurrency. I haven’t told him what happened just now though he has been updated all this while. I don’t know how to.”

User mtreme reportedly invested his life savings — $357,000 — in bitcoin via Mt. Gox, to try and build for his son’s education fund, he said, while another also spoke of losing college-tuition money. And lots of others talked about desperate and futile attempts to get their bitcoins out when they started realizing something might be wrong, garnering sympathy, but also plenty of “What were you thinking,” type comments from the Reddit crowd.

Mt. Gox's hidden note hints at hopes for acquisition amid tales of bitcoin losses - The Tell - MarketWatch

 

[gozer]

What the heck is bitcoin, gox? And why should I care?

It's a virtual currency that has gained popularity over the past few years. MtGox was the largest online exchange for bitcoins. These exchanges allow you to convert bitcoins to and from real money.

MtGox was originally a card trading site associated with the Magic card game. MtGox stands for Magic the Gathering online exchange.

 

[Mulligan]

Considering the fact I haven't even started to pay bills online yet, there will be many more casualties before I am one of them.

 

[aja8888]

I feel like I need to get in on this quickly and ge a small press and start stamping out copper-plated zinc bitcons and selling them on eBay.

 

[jetpack]

Mt. Gox wasn't the largest when it closed down. It's been struggling for a while, and the recently exposed security problems certainly didn't help it. A classic run on the bank.
People that kept their bitcoins at home are safe.

The supposed strategy doc has some interesting details (if true)
MtGox Situation: Crisis Strategy Draft

 

[pb4uski]

P.T. Barnum's words of wisdom strike again. Morons.

 

[gozer]

Mt. Gox wasn't the largest when it closed down. It's been struggling for a while, and the recently exposed security problems certainly didn't help it. A classic run on the bank.
People that kept their bitcoins at home are safe.

The supposed strategy doc has some interesting details (if true)
MtGox Situation: Crisis Strategy Draft

I did not realize they had previously fallen on hard times.

 

[RockyMtn]

I think that most people who have Bitcoins don't really understand what they bought and well definitely not understand where their money went once it disappears.

 

[karluk]

The supposed strategy doc has some interesting details (if true)

This strategy document may be fake, but if it's authentic Mt Gox is toast. It says that practically all the bitcoins that were entrusted to it have been stolen. If Mt Gox declared bankruptcy and liquidated, it would be able to pay off creditors at about 19 cents on the dollar. And that's using extremely generous accounting - the strategy doc lists the bitcoin liabilities as being worth only the current exchange rate on the Mt Gox site, not the higher price available on unhacked exchanges.

So the strategy doc envisions a future where its massive incompetence is forgiven and investors continue to use the site, generating profits that will eventually allow it to repay its debts. Color me skeptical. If I were a Mt Gox customer, I would never trust the site again.

 

[M Paquette]

Mt. Gox? Gone? O Noes!

How will I get by without the premiere site for trading "Magic: The Gathering" cards and BitCoins? Maybe I should have asked earlier, but all the Bitcoin deposits there ARE FDIC insured, right? And what of the Winklevii?

 

[TimSF]

Clearly, the timing is right to buy Bitcoin. Double-down!

 

[powerplay]

Clearly, the timing is right to buy Bitcoin. Double-down!

Sounds like a buying opportunity. I wonder which Vanguard fund invests in this?

 

[Newventurer]

On December 12th 2013 I sent the following message to Mt Gox after finally receiving notification from them, after waiting 12 days, that my account had been approved:

"Seeing as how it took you 12 days to verify my account and I missed the opportunity I was hoping to take advantage of, I will not be opening an account with you. There is no way with your current level of performance that one could be comfortable that they would have access to their funds when desired."

I had intended to purchase 2 bitcoins which at the time were approx $600 each, then they went to $900 each in 10 days.

It was my intent to dip my toe in and learn more about how they work.

Glad I didn't get greedy.

 

[ls99]

It's a virtual currency that has gained popularity over the past few years. MtGox was the largest online exchange for bitcoins. These exchanges allow you to convert bitcoins to and from real money.

MtGox was originally a card trading site associated with the Magic card game. MtGox stands for Magic the Gathering online exchange.

Thanks for the explanation.

My reaction to this is akin to a conservative investor, who upon hearing of some new hot stock or invesment opportunity: I now know everything I need to know about it.

 

[imoldernu]

A broad view of the aftermath:
The Mt. Gox fiasco won't kill Bitcoin | The Verge

Now that what’s left of Mt. Gox’s credibility has been shredded, the company is unlikely to rebound even with a bailout from investors or other members of the Bitcoin community. That leaves the question of what comes next. A host of funded exchanges are ready to take its place. But for an exchange to regain users’ trust after the fall of Gox, it will need new transparency standards and safeguards, some of which have already been proposed.

Others see currency exchanges as a gap technology that the Bitcoin economy is poised to move beyond. Once people are being paid in Bitcoin and spending money in Bitcoin, there won’t be as much need to buy it for cash, which is the primary function of an exchange. "These large exchanges that are international and global are more important in the early stages of Bitcoin when we need price discovery," says Jon Matonis, director of the Bitcoin Foundation. "You don’t need them in the long run because in a true Bitcoin economy you’ll have a closed-loop system."

 

[Running_Man]

As with any financial transaction, the current issues should be analyzed non-emotionally to determine whether this equivalent to a dollar crisis moment or if this is a moment equivalent to the Confederate currency moment in regards to bitcoin's future. This is in the end a medium of exchange and perhaps might be an opportunity. Certainly I wished I had listened to some of my early adopter friends when bitcoin was at 1$, of course if their money got stolen, that is a serious problem that needs addressing, but theft of money and counterfitting has occured since the first coins were made.

The issues around bitcoin reminds me of discussions in the early days of the internet skeptics when people stated why would I want to look at something online when I can have the catalogue in my house?

 

[CaliforniaMan]

As with any financial transaction, the current issues should be analyzed non-emotionally to determine whether this equivalent to a dollar crisis moment or if this is a moment equivalent to the Confederate currency moment in regards to bitcoin's future. This is in the end a medium of exchange and perhaps might be an opportunity. Certainly I wished I had listened to some of my early adopter friends when bitcoin was at 1$, of course if their money got stolen, that is a serious problem that needs addressing, but theft of money and counterfitting has occured since the first coins were made.

The issues around bitcoin reminds me of discussions in the early days of the internet skeptics when people stated why would I want to look at something online when I can have the catalogue in my house?

You make a good point. As an old guy now, I don't want to be like those old computer guys were when I was young, dismissing microprocessors as nothing but a toy. On the other hand, most of those early microprocessor companies, hardware or software, went bankrupt.

So there may be two questions.
1) Is a pure digital currency Confederate money or something truly new and important.
2) Why Bitcoin?

Just because it has become the predominant digital currency now, it is not the only one nor the first. If it is really the coming thing, what is to stop some other entity say Google or Microsoft or even the U.S. Government from setting up one. A digital currency with more transparency and status.

I have a feeling this digital currency thing has a long way to go before we see how it finally plays out. And BTW, I wish I had bought at $1 too! In 10 years will I wish I had bought in 2014? I guess I will have to wait to find out.

 

[M Paquette]

"You don’t need them in the long run because in a true Bitcoin economy you’ll have a closed-loop system." http://www.theverge.com/2014/2/26/5449218/bitcoins-too-big-to-fail-moment

Heh. Wishful thinking combined with economics FAIL, in one tidy sentence. How efficient of him.