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MtGox Files For Bankruptcy Protection
Sockatume writes "The beleaguered MtGox bitcoin exchange has officially filed for bankruptcy protection in Tokyo. According to the Wall Street Journal, Bitcoin held an impromptu press conference that addressed recent rumors. They state that they have over $60m in liabilities against just $30m in assets, and confirm the loss of over $500m worth of Bitcoins, split between customers' balances (750,000 BTC) and company assets (100,000 BTC). Owner Mark Karpeles said, 'There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble.'"
And so the libertarian unregulated money dream dies.
Owner Mark Karpeles said, 'I'm a bad widdle boy', then jumped in his solid gold flying Lamborghini and flew to to his 50 acre estate in Barbados.
This debacle should only help legitimize bitcoin, as corruption surrounding the currency is now a public matter.
According to the Wall Street Journal, Bitcoin held an impromptu press conference that addressed recent rumors.
Bitcoin held an impromptu press conference? Did the Dollar and the Peso attend as well?
Oh, you mean Mt. Gox held an impromptu press conference. Yeah, well, whoever trusted an online card trading portal as if it were a bank deserves whatever they got, IMO.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
The Gox Crater: Crowd Detectives Reveal Billion-Dollar Heist As Inside Job
Thousands of volunteering and self-organizing detectives have been meticulously laying a puzzle that reveals the Gox billion-dollar heist as an inside job. As smoke clears on the implosion of the Empty Gox bitcoin exchange, thousands of people in the community committed to revealing the truth behind the stonewalling exchange. What was claimed first to be a technical problem, then an outside theft, has been conclusively determined that the MtGox management knew too much, too long ago, to have this be an ordinary case of theft.
davecb@spamcop.net
The weakness was apparently down to the site treating a txid (transaction ID) field as a unique identifier. Turns out not only was it not actually a unique transaction identifier, it could also be spoofed easily without altering the (real) destination for the transaction. Made it trivial to make fake deposits and real withdrawals.
MTGox's fault for not understanding a spec whilst using it to move vast sums around but it probably highlights the importance of good naming practices when creating a spec.
Your stewardship of Mt Gox resulted in a fairly significant black eye for the very currency you've plundered and/or allowed to be plundered.
I find your lack of remorse disturbing.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Failed exchanges are supposed to die. This is how a free market is supposed to work. I have been warning against using MtGox since April 2013 and you can all go check my Bitcointalk posts to see that this is true. If you request a withdraw from an exchange and it suddenly takes two weeks instead of a few days before you get your money then it is time to get out. If the delay increases to four weeks then six then months then it's clearly time to not only get out but also warn others about this exchange. A whole lot of extremely stupid people ignored all the red flags and alarmbells and they lost money when this exchange went bankrupt. This is very good. A small percentage of the people who lost money at MtGox will learn from this and be more careful and picky as to where they place their money in the future. If you do not have control of the private keys of a Bitcoin then you don't have the Bitcoin, you have an IOU with someone who may or may not hold Bitcoin for you. The demise of MtGox will sadly make many of the idiots who lost money there cry for more government, more regulation and more fascism. Fascism is not a good solution, more personal responsibility is the solution. As I said, there were dozens of red flags yet people kept using this clowncar exchange. "but but but I can arbitrage because the price is 25% higher there" said a lot of people who ended up loosing their money. Well duh, why do you think that 25% premium was there in the first place, stupid? In short: Fools and their money are usually separated. If you can't bother to do five minutes of basic research of the place where you plan to place thousands or millions of dollars then you get what you deserve. This is, in my opinion, a good thing.
9/11: Never forget it was a false-flag operation
Making a mistake is one thing. Not realising that something is wrong when over $500000000 slowly disappears from your accounts is the criminal thing. I mean, in practice this must mean that they constantly noticed their hot wallet is empty (when it should not be) and filled it from the cold wallet without investigating anything. Over and over and over again.
Amazing.
From the AP Story
The reactions of the various Japanese government officials are interesting. Essentially, there was no "theft" because Bitcoin is not a "real" currency. Which is an interesting attack. Anyone can steal your bitcoins and you have no recourse to the law because it isn't actually theft.
Best Slashdot Co
Yeah, yeah, millions in bitcoins, but what about the Magic the Gathering Online Exchange? I keep all my wealth in Moxes. How will I exchange them now?
Real Bitcoin users don't keep their bitcoins in an exchange but on their device.
No True Scotsman lost money on Bitcoin.
It tells me they were not following accounting principals and balancing the books at the end of the month. (Which I suspected long ago when I closed my account with them)
Any company that I question the accounting practices on is one that I run from screaming. Stocks, jobs, bitcoins, does not matter.
Actually, no money today "just works". Yes, the old coins did. They were minted out of precious metals and because of that they had some value. You could essentially cut off parts of it and sell those parts if you felt like it. That actually did happen.
Roman coins are actually a rather bad example because they, at least for some of them, already had the same effect money has today. The value is less the intrinsic value of the coin itself (made of bronze they were not that valuable), but because of the trust people had into the issuing entity (the Roman senate, or later the emperor). In early medieval times, people returned to the system of intrinsic value because there was no entity that you could (or rather would) really rely on that could say that copper in your bag is worth more than the metal is worth. That only came into existence again when countries were strong enough to give money its symbolic value again. And that's where we are today.
The coin (or bill, for that matter) itself isn't that valuable, but its symbolic value is what gives it its value. It represents something. When I hand you a dollar bill, it's worth one dollar. Why? Certainly not because the paper with the funny print on it is worth a buck. The material value of a dollar is negligible. And it gets even more absurd with a 100 dollar bill.
The value of modern currency is in the trust the person receiving it has in it. If you allow me to buy something worth 100 bucks with a 100 dollar bill, you trust that bill to be worth those 100 dollars (ok, you might want to check whether it's genuine because you do not trust me, but if it's genuine and the Fed printed it, you trust that bill), you rely on getting something worth 100 dollars again with that bill.
Why do you do that? Because you trust the entity issuing the bill that they can back it up with something. In case of the US, probably you trust it because you rely on the US' economy to produce enough to prop up the bill's value.
That our current currency has zero intrinsic value can easily be seen when states start to fail. Take most of the European countries after the war. The money bills were essentially worthless. They printed insane denominations on them (up to a billion, and with a hint of luck you could probably get a loaf of bread with it), but they still lost value pretty much by the second simply because nobody trusted the money anymore.
So essentially, the value of contemporary currency is in the trust people put into it. The trust that they will get something in exchange for it. As long as that trust applies universally, a currency will continue to work. When that trust is lost, the currency becomes pretty much worthless.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Is there some script or something that we could run that would scan for commenters that reference pyramid or ponzi in a bitcoin article and just automatically band them from future comments on bitcoin?
No. Slashdot infrastructure isn't here to respond to your personal belief that Bitcoin isn't a pyramid scheme.