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Mt. Gox Knew It Was Selling Phantom Bitcoin 2 Weeks Before Collapse
An anonymous reader writes "Mt. Gox CEO Mark Karpeles wrote in a sworn declaration in the company's U.S. bankruptcy filing he suspected hundreds of thousands of bitcoins were missing on Feb. 7, more than two weeks before it finally halted trading. That means Mt. Gox allowed its customers to continue trading, knowing that its bitcoin stash was wiped out and collecting as much as US$900,000 in trading fees. Since Mt. Gox said it was also missing $27.3 million in cash from customer deposits, it raises the possibility that customers — despite seeing a cash balance displayed in their account — might have actually been buying bitcoins that did not exist, with cash that was already long gone."
give us your money & your life? http://rt.com/usa/trader-suicide-nyc-financial-community-618/
I think you misuse. BC IS PHANTOM!
I'm all for what bitcoin is trying to achieve. But this is just a news story about an exchange which didn't know what it was doing, trading in a currency that hasn't been fully proven, operating in an unknown capacity from somewhere in Japan, and without any oversight at all. That's like millions of people asking my buddy Joe who lives in a trailer to hang onto their money for them. Oh no, bad decisions were made?
I do not see why there are still people out there who keep saying Bitcoin is a good investment. We keep seeing these exchanges fold up and run off with all this money. I know they claimed they were hacked, but how do we know for sure. To me the whole Bitcoin thing is just a way for a few to get rich by ripping off so many others. Also no one should be surprised that they were sold phantom Bitcoins. You have no way of knowing what you actually have on a site like that since you can’t directly access the wallet. It seems like common sense to me, but I guess I will never understand this kind of thing.
It's official. The name is now changed to MtGotchya.
-- You are in a maze of little, twisty passages, all different... --
Real hard currency!
The only people who make money in a pyramid scheme are the people at the very top. Everyone else is a sucker.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
All these 'with-it' trendy people got to brag about about being ahead of everyone else and 'cool' because they were so smartly investing in this scam. Well they got what they paid for then as its been shown they really didnt do their homework to figure out that there are insufficient checks and balances in this BitCoin game to make sure swindles like this cant happen.
Dont worry, another similar scam will soon turn up for them to put their money into.
I'm thinking of a word for a kind of system where, I don't know, someone makes rules for how large chunks of assets are managed, traded, stored. This word would mean that some PEOPLE, some kind of official-sounding types of PEOPLE, would "check up" on these places, these places that handle and store and manage other people's money, or assets, stuff. They would be checking up to make sure that the people who run those places, those people, wouldn't be, knowingly or unknowingly, doing things with other people's money that they shouldn't be doing. Maybe there could be a kind of system, say, where those people doing those things, are encouraged or made to do some things, to prove, that they have the money and things that they are supposed to have, and doing the things, those things that they are supposed to do, and not doing those things that they are not supposed to be doing, to those other people's money, and assets and stuff. And that they're honest, about what they say that they're doing, and that they're not doing. Who would be doing all that checking, and what would that process be, and who would be subject to it. If only there were one simple word for all of that.
As long as the amounts were in Millions of US dollars, they can get away with it, if they can get a trial in the US.
Isn't the bitcoin protocol expected to prevent exactly this? Assuming that the cryptographic part wasn't broken, the existence of a 6-block chain telling you the coins are there means they *are* there. Something tells me that a lot of people blindly trusted some random guy on the internet with their money instead of simply validating the fckn block chain, which would have told them immediately that they were screwed over.
Gosh, if only there was some governing body to regulate this sort of thing and insure individuals against it.
"Mistakes were made"?
Appended to the end of comments you post. 120 chars.
Neoliberals will shrug this off as an anomaly, but the ability of people of privilege to steal is enhanced by unregulated free markets.
It never fails. When there are no rules, it pays to be unruly.
You are welcome on my lawn.
The only reason people were into this was to either trade in illegal goods and services or be cutting edge with something that only really served to facilitate illegal activity.
People were told repeatedly that there were no regulations as countries didn't know how to handle it, which emboldened everyone.
Now you see the ramifications. If you like being in a lawless area, don't look for cops when you get raped.
MtGox did the standard bank thing of trading what they don't have by power of the fractional reserve, not particularly surprising.
Or close enough.
A person suspects Timothy of being a murderer and panning a second murder thus that person knows that Timothy is a murderer and will be killing again and thus can kill Timothy and claim defense of another based solely on that suspicion.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
I do not see why there are still people out there who keep saying Bitcoin is a good investment
For those at the top of the pyramid scheme it probably is. For everyone else? Yeah, not so much. Bitcoin has all the hallmarks of a pump and dump scheme. Thinly traded asset of dubious future value? Check. Marketing campaign to recruit investors? Check. Early large purchases at discounted rate? Check. Absurdly fast rise in "value"? Check. Early investors selling out or disappearing and leaving the new investors holding the bag? Check.
Unregulated bitcoin exchanges are basically pyramid schemes waiting to happen. The bitcoin currency itself looks shockingly like a pump and dump scheme and should be treated as radioactive (i.e. very carefully) until proven otherwise.
Seems as if this is a great "real world" example of what happens when you try and run a "free market" without any sort of regulating body. People get scammed and it doesn't matter that the scammer's company collapsed...they cashed out a LONG time before it happened.
All these 'with-it' trendy people got to brag about about being ahead of everyone else and 'cool' because they were so smartly investing in this scam.
So do I still get to brag, since the handful of BTC I still have currently trade at USD$650, while my initial investment comes out to less than $50 in electricity?
Boo hoo, people who trusted an unregulated exchange got burned - Color me shocked.
I'm all for what bitcoin is trying to achieve.
Bitcoin is a currency. It cannot try to achieve anything. As for the people behind bitcoin, it's extremely unclear what they are trying to achieve and not all of the possibilities are harmless. I can very easily make an argument that bitcoin looks like merely the latest version of a pump-and-dump scheme. The exchanges look a lot like pyramid schemes. Most of the arguments supporting bitcoin show a shocking lack of understanding of economics and how and why currencies actually work. I see a lot of credulous arguments in support of bitcoin that make me worry that many of the supporters are FAR too trusting and will be taken advantage of.
If you hold your own Bitcoins in a local wallet, then yes, a handful of confirmations adequately proves you really do have those coins.
As soon as you entrust them to someone else to store in a pooled account, bam, confirmability lost.
A key philosophy behind the BTC protocol assumes direct person-to-person transactions. If you adhere to that, you don't get screwed by a failed exchange; for that matter, you don't even care about the existence of an exchange... Except insofar as they help define the "worth" of a Bitcoin as a medium of trade. Though, with the likes of Overstock accepting BTC now, the marketplace itself might soon serve that function without needing an external point of reference.
The only reason people were into this was to either trade in illegal goods and services or be cutting edge with something that only really served to facilitate illegal activity.
Fuck you very much, sir.
I, and the vast majority of Bitcoin users, engage in entirely legitimate commerce with BTC as the medium of exchange. Heck, I even declared my BTC gains on my taxes last year, fer chrissakes.
Now, when I want to score a quarter of weed - You ever actually try to buy anything with BTC, or just mindlessly parroting the FUD about Silk Road? My dealer takes USD only, thanks.
"...buying bitcoins that did not exist, with cash that was already long gone."
Sssoooo, it's exactly like the US dollar. Or ANY fiat currency.
[End Of Line]
Ok, I get that you don't like Beta.
Overstock doesn't hold BTC, they convert it via CoinBase. Coinbase sets Overstock's BTC prices for them by using the current exchange rate. When you go to checkout with BTC you get a quote for the price that is only good short amount of time, if you don't pay the invoice within that window you have to start over and get a new price quote.
Half a billion dollars has been stolen. Where's the Tokyo Metropolitan Police Department? This is their job. It's embarassing that they haven't made any arrests.
I just can't help but think that if you went to Central Casting and asked them to send you a guy who looks like he would run something like a Magic the Gathering web site, you'd get back Mark Karpeles.
The gambler's fallacy: Everbody wins! It works like this. People who win make a big fuss about it. People who lose either keep quiet, or pretend they won and make a big fuss about it.
Reality: in the long term, almost every gambler loses. It's a zero sum game and it's biased towards the house or the bookie.
Maybe on this occasion, you took a punt on spending electricity and computer opportunity cost on bitcoins, and on March 13th 2014, you are up on the deal.
2 things may go wrong. One is that you'll keep on holding even after a fatal crash. and those gains are not realised.
Second is that you will during the course of your life also take other such punts on unproven investments, and lose more than you gained on bitcoin.
Millions are being taken out of the bitcoin game by fraudsters and thieves. It's a zero sum game, their gain will be matched by the losses of ordinary punters like you.
Only if you sell them before they go back under $50. Most of the things that made Bitcoin fun and interesting in the early days are gone, and now it's the domain of Redditors who sunk their life savings into it and are desperate for some other sucker.
Ultimately the bitcoins are a digital file that we ascribe value even though there's no inherent entity, and we trust in its value because someone assured us that a computer is sure it's a unique file. So what's a weird thought to me is, when did these accounts actually go to being valueless?
It's like... Pretend there was no insurance or regulation, and I had a bank account with no physical cash, but just a computer entry saying I had $5,000, and the bank has $5,000 to cover it if I need to withdraw. The bank lends out that money, invests it, whatever, and now does not have the $5,000 on-hand to cover my account. Then at some point, the banks investments go belly-up and people stop paying off their loans, and the bank is unable to get enough money together to cover my $5,000, but they still have the computer entry saying I have $5,000. Finally, I go to withdraw it, and they tell me they can't give me my money, and they go out of business.
So the weird question is, at what point did I actually go from having $5,000 to not-having $5,000?
Exactly the same thing. And definitely irony.
Guess which two things you are wrong about?
I know regulations can't solve everything. we're all human. We're fragile, stupid, and too easily bought. Regulators and regulation writers are all those.
But through all of this, i think of "the sign on the bar that says no backpacks on the bar".
Whenever you see a sign at a place, that says "no something_or_other" its probably from experience. For a while everyone had their backpacks onthe bar. They took up space, and then people started knocking food on everyone else. At some point, we realized this "liberty" to have backpacks there sucks for everyone, and there was a sign.
So.. a "bank" that has no internal controls? Those internal controls there for a reason. Sarbannes Oxley? Maybe poorly written, but there for a reason. Glass/Steagal was there for a reason. Regulations on who can open accounts are there (usually) for a reason. People who say "aww the rules suck, we'll be much better off with no rules" get burned easily.
Reality: in the long term, almost every gambler loses. It's a zero sum game and it's biased towards the house or the bookie.
You are assuming that Bitcoin has no inherent benefits as a technology. Even Goldman Sachs admits Bitcoin will save society at least 200 Billion a year - http://www.coindesk.com/goldma... . This sounds a lot like everyone winning by a more efficient means of moving money around alone thus lower fees for consumers.
You do not need to invest in Bitcoin, or gamble. Hundreads of thousands of businesses are benefiting right now with Bitcoin and whether it goes up or down in value is no consequence.
Well, when this happens to an actual bank, you have $5k up until the day the bank stops paying withdrawals, at which point you have some amount less than $5k. How much less is determined by value of the assets that remain on the books, which is usually much higher than $0. When an FDIC-insured bank fails, usually depositors eventually recover some amount over 90% of their uninsured assets as the government "winds down" the bank by selling off the loans at market value and distributing the proceeds.
Without regulation? I suppose how much in the way of assets they have left to portion out to depositors just depends on how long their cash or credit reserves last... All Mt. Gox had was what a banker would call "reserves", and they ran those down to $0 before shutting the doors. In that case, you have $5k up until the point they couldn't pay out withdrawals, at which point it instantly went from $5k to $0.
You are assuming that Bitcoin has no inherent benefits as a technology.
Not at all. There are elements of the bitcoin transaction model that are superior to existing ways of transferring money between banks in different countries. The legacy of bitcoin will be to improve the means by which conventional currencies are transacted between states. The implementation with a real currency will be superior to bitcoin itself, because it can be near instantaneous. Bitcoin can't be instantaneous because the truth of a transaction isn't made final until possibly competing block chains have had time to prove their arbitrary fitness and have been consolidated.
No, bitcoins have been stolen. They're not recognised as currency or really as property in Tokyo, so essentially nothing was stolen. Perhaps with this revelation there might be a case for fraud, but not as likely for theft.
Not at all. There are elements of the bitcoin transaction model that are superior to existing ways of transferring money between banks in different countries. The legacy of bitcoin will be to improve the means by which conventional currencies are transacted between states. The implementation with a real currency will be superior to bitcoin itself, because it can be near instantaneous. Bitcoin can't be instantaneous because the truth of a transaction isn't made final until possibly competing block chains have had time to prove their arbitrary fitness and have been consolidated.
Most of us welcome the introduction of an alt-coin backed up by the full faith and control of states. Eurocoin, Amerocoin, GOVcoin? This will be an interesting economic and political experiment to see how those competing blockchains deal with Bitcoin.
What you seem to be describing is what we currently have with digital fiat. I wonder why fees are so high and ACH's and wires so slow?
Perhaps GOVcoin will indeed be open, cost half a penny to wire, process quicker than days, and allow users to see and confirm transactions on a public blockchain? Perhaps States won't greedily devalue currencies 5-13% a year? Some of us doubt this, and even if they do approach competing with Bitcoins valuable features than we all still win as Bitcoin would have facilitated this transition into a future era of efficiency and transparency.
This is not a bitcoin failure. Nothing about bitcoin failed here.
This is MtGox, a sorta-kinda but not really bank like entity (relax, trust us) that failed in a big way. Either it really got hacked and lost the bitcoin, or it was a giant fraud an it stole the bitcoin itself.
I don't believe it. They knew last year when they stopped processing outward international transfers and kept saying that it was due to regulatory issues... I hope they go down hard.
I don't think that means what you think it means.
First problem, the gambler's fallacy refers to a mistaken belief that a random process that has locally shifted away from its mean somehow "owes" the universe a return to its mean. After a long losing streak, the gambler erroneously believes he has a better chance of a win.
Second, for the gambler's fallacy to apply, you need an independent random process. Specifically, if the randomness in question has a history to it, the gambler's fallacy doesn't apply as a fallacy - The deck of cards with all the non-face cards played out really does "owe" you a 20 or a blackjack (Hmm, do aces count as face cards? Whatever - You get the point).
In this case, you want something more like confirmation bias or a sunk cost fallacy - Though neither of those quite properly applies to what I described, because I haven't ignored evidence contrary to my opinion (quite the opposite, I've weighed it heavily), and I haven't needed to keep pumping more money into my BTC position to keep it afloat (again, contrary to that, I've steadily syphoned money out and what remains just keeps going up in value).
It's a zero sum game, their gain will be matched by the losses of ordinary punters like you.
You have the first clause right, though you use it as though you don't realize that makes it 2.5% per year better than USD, which systematically loses value over time.
As for the second half of that - If BTC entirely collapsed tomorrow, I've already done better than break even on my original investment. Except, haters like you don't seem to get that my "investment" consists of having fun (and $50 in electricity, but hell, I've paid more for a single concert ticket). I got to play a part in the success of the first viable non-commodity non-government currency. I got to learn OpenCL as a result of tweaking miners to squeeze every possible hash out of my GPU. I got to watch my "just for laughs" investment turn into the price of a new car (if I hadn't slowly spent most of what I had over time) - And no, I don't regret spending it at $4/BTC, at $30/BTC, at $200/BTC, because I got involved for the idea, not because I someday hoped to get rich fleecing morons out of their dollars in exchange for worthless ($0.10 each, when I started) bits in a shared transaction record.
What you seem to be describing is what we currently have with digital fiat.
What I'm saying is that bitcoin like technology could make the transfer of fiat currencies more secure. After all with international transfers, there's no ultimate authority, such as there is with domestic transactions.
I'm certainly not suggesting a government backed GOVcoin competitor to bitcoin. The point of bitcoin is to do an end run around government regulation, so a government backed one would be counterproductive.
Yes, I'm aware of that other gambler's fallacy to which you refer. It may well have prior call to the name "gambler's fallacy".
Nevertheless the one that I described, of gambler's being vocal when they win, and being silent or lying when they've lost is another one, thus giving the misleading idea that they are successful gamblers when they are not. That is also a gambler's fallacy. You can witness it at any racetrack or casino.
As for the second half of that - If BTC entirely collapsed tomorrow, I've already done better than break even on my original investment.
The point of my description of the gambler's fallacy is that you may well be ahead on this particular gamble (bitcoin) and you are being loud about it. But there will be other gambles in your life, perhaps tech-stocks for examples, that you will have or will lose on, and which you will keep quiet or lie about.
The big truth is that just because you won, doesn't mean it was a good gamble. It only means that on this occasion a random outcome happened to be in your favour. Another time it won't be.
The point of bitcoin is to do an end run around government regulation, so a government backed one would be counterproductive.
That is merely one purpose amongst many. Whatever you call this "Bitcoin" like technology is of no consequence as there will have to be inherent value to those tokens on the public or private ledger used by states. This international "reserve token" system would have to either be pegged to a domestic currency or have an independent value. This would ultimately compete against the value of bitcoin and I welcome it.
If politicians start behaving these "tokens" will ultimately have more value than Bitcoin. History has not been kind however and either way we all win because those paranoid anarchists would have nudged governments into transparency and inveted a really neat technology which will ultimately be adopted in some form or another
https://maps.google.com/maps?q=Tokyo+Metropolitan+Police+Department&hl=en&sll=37.0625,-95.677068&sspn=39.099308,56.513672&hq=Tokyo+Metropolitan+Police+Department&radius=15000&t=m&z=13
Economists often use an index which does not to look at changes because the noise introduced by fuel and food prices in the short run obscures more significant economic signals. But all long-term deflators and considerations of purchasing power use full index.
If the governmental way is 'opaque', then why is it so obvious?
And given that there is in fact a free market in bonds which have inflation expectations built into their price and yield, what's the problem? Why do libertarians get so uppity about the 'value of the $FIAT_CURRENCY' as if hiding notes under the mattress should be a good solution? What's wrong with getting on with the rugged individualism solution and own investment property that isn't a $FIAT_CURRENCY_NOTE in your wallet?
Confused? Feel free to check out my Mt Gox timeline
Except it isn't just random. Domain knowledge can put you ahead of the odds.
I attempted to withdraw my last amount of US $ from Mt Gox in January, at least a full 6 weeks before the collapse. It was a small amount, only $300. After 4 full weeks of waiting, I complained I had not received my money, then complained a 2nd time, but my only reply from Mt Gox was that they were backlogged and I needed to wait. Needless to say, I have never received my $300.
I believe Mt Gox knew a couple months before the final collapse that things had gone south, so they attempted to gather as much cash as they could before shutting down. CEO Mark Karpeles is a thief himself for continuing to take customers deposits and not processing their withdraws.
As soon as Mt Gox discovered the problem, it could have been announced and fixed. There was no need to continue stealing our money for weeks on end.
Here is the last email I received Feb 9th after complaining twice about not receiving my $300 withdraw:
From: Dennis
Reply-To: Support Desk
Date: Sunday, February 9, 2014 7:01 AM
Subject: [Support Desk] Re: Transaction reference
Dennis, Feb 09:
Dear Joe,
Thank you for your mail and we apologize for the inconvenience caused to you.
I could see that the withdrawal of $300.000 has been confirmed and is under process.
Due to a change in our banking system we are currently experiencing a back-log of withdrawals that we need to process.
Our team is working hard to increase transaction speeds, it will take a few weeks to get back to normal, and we thank you for your patience during this time.
We understand that withdrawal has taken a long time but the delay is purely because of the bank limitations. We are in talks with many banking partners to resolve the issue. You can expect a more advanced banking solution soon.
If you have any further inquiries, please feel free to contact Mt.Gox Support and we will be glad to assist you with your query.
Best regards,
MtGox Team
https://www.mtgox.com
I got to play a part in the success of the first viable non-commodity non-government currency.
No, you didn't. You were/are part of a scam. It's nothing to be proud of, being high up on the pyramid.
I'm a minority race. Save your vitriol for white people.
Though, with the likes of Overstock accepting BTC now, the marketplace itself might soon serve that function without needing an external point of reference.
Why is this lie perpetually getting repeated? Hell, some moron even modded it up. Overstock (and Tigerdirect, etc) do not accept bitcoins as payment.
Once again for those of you too stupid to read carefully - No major retailer accepts bitcoins as tender!. Some of them allow you to pay via an exchange such as coinbase, but note that even though the customer is parting with bitcoins, the seller is only ever receiving dollars (AKA real currency).
I'm a minority race. Save your vitriol for white people.
Losing money is built in to the system. IT's called inflation, and it's supposed to be a good system. I guess it actually is, only banks should pay interest that matches inflation to poor people, because they are exactly the kind of people who should be encouraged to save money. They have no means to invest, the amount of money they have is way too small. Better to have in in bank than stuffed under in some secret place. The ones with lots of money? Yeah, let inflation bite it or let them find a way to invest the money, that at least employs someone somewhere. Most likely overseas, but hey, they need work too.
Mostly nonsense, of course (figuratively and literally), but bonus points for admitting evolution is falsifiable in the very last sentence and invalidating your entire "argument".
Why is this lie perpetually getting repeated? Hell, some moron even modded it up. Overstock (and Tigerdirect, etc) do not accept bitcoins as payment.
You might want to tell that to Overstock and Tiger Direct, then, who both proudly proclaim that they do accept BTC as payment.
But no doubt, you know better than they do, so carry on with the Bitcoin hate.
Why is this lie perpetually getting repeated? Hell, some moron even modded it up. Overstock (and Tigerdirect, etc) do not accept bitcoins as payment.
They certainly do, as they are supporting the Bitcoin ecosystem in 2 ways:
1) Using Bitcoin as a payment protocol gives the 0.5-1% in fees to Bitcoin exchange processors rather than 3-8% to Visa/Mastercard.
2) Even if a merchant instantly converts back to fiat there creates a demand for bitcoin because those bitcoins used in the transaction are tied up for up to 24 hours in the cycle back to the exchange and thus can drive up the price.
Once again for those of you too stupid to read carefully - No major retailer accepts bitcoins as tender!. Some of them allow you to pay via an exchange such as coinbase, but note that even though the customer is parting with bitcoins, the seller is only ever receiving dollars (AKA real currency).
While currently Overstock converts most of the bitcoins to USD to pay their suppliers and affiliates, Patrick Byrne indicates that they keep a small percentage of profits in Bitcoin and are looking to increase that percentage when they start getting more of their partners accepting Bitcoin.
They are heavily invested in Bitcoins future and expect large profits to be continued to made in doing so.Look at the email they just sent to 42 million of their clients in support of Bitcoin:
http://www.overstock.com/80786/static.html?ehid=EF916438FE97B21EE040010A249C4B4A
I would love to see the poll of former Mt. Gox users that knew the name stands for Magic: The Gathering Online Exchange http://en.wikipedia.org/wiki/Mt._Gox. I would almost enjoy see the color drain from the faces of those get-rich-quick tulip bulb traders.
Why is this lie perpetually getting repeated? Hell, some moron even modded it up. Overstock (and Tigerdirect, etc) do not accept bitcoins as payment. You might want to tell that to Overstock and Tiger Direct, then, who both proudly proclaim that they do accept BTC as payment.
They can proclaim whatever the hell they want to; they themselves state, on their website in multiple places, that bitcoin transactions are routed through coinbase or similar.
But no doubt, you know better than they do, so carry on with the Bitcoin hate.
When we go to the zoo and comment on the monkeys flinging poo at each other we don't call it "hate". We call it "scorn".
I'm a minority race. Save your vitriol for white people.
Patrick Byrne indicates that they keep a small percentage of profits in Bitcoin and are looking to increase that percentage when they start getting more of their partners accepting Bitcoin.
I think you meant "any of their partners". Right now (mostly due to accounting laws) a business is going to have a hard time accepting anything other than currency (any currency) for payment, hence I'd like to see how they intend to "keep some of the profits in bitcoins" other than converting dollars back to bitcoins. Both overstock.com and tigerdirect make it clear that they use an exchange so that they can receive real currency. Were they to actually receive bitcoins in payment you can be sure that more than a few tax officials would start wondering about it.
Technically BTC that is received would have to go on the books as stock or similar. Thus keeping "revenue" in BTC means capturing payment in books at time of receipt, in which case the value you have captured is non-financial instrument asset. This asset has to be depreciated. Selling that BTC later on (for dollars) results in even further revenue. This just artificially drives up the "earned revenue" in the year-end balance, making it an almost certainty that you would be paying vastly more in tax than you would otherwise have done.
Every time the topic comes up, all the BTC proponents, with not a single accounting or economics degree between them (Patrick Byrne has the "do you want fries with that" Philosophy degree) start disagreeing with practicing accountants, book-keepers and economists. BTC as money starts looking even more of a joke when you actually try to keep books with it - book-keeping, and all the laws made in every country to audit it, don't work on a deflationary currency.
BTC can't work as a currency. It was designed as a poor joke on otherwise smart people who are a little clueless about accounting, economics, book-keeping, etc.
I'm a minority race. Save your vitriol for white people.
Selling that BTC later on (for dollars) results in even further revenue. This just artificially drives up the "earned revenue" in the year-end balance, making it an almost certainty that you would be paying vastly more in tax than you would otherwise have done.
You are correct that Overstock will have to pay capital gains on assets such as Bitcoin if it appreciates in value. Are you inferring that the percentage in taxes paid would outstrip the value in gained appreciation once said asset was sold? We are laughing all the way to the bank paying all the taxes on our deflationary currencies rapid rise in value.
Every time the topic comes up, all the BTC proponents, with not a single accounting or economics degree between them (Patrick Byrne has the "do you want fries with that" Philosophy degree) start disagreeing with practicing accountants, book-keepers and economists.
This is an argument from authority fallacy.... lets just stick with data and facts please.
They can proclaim whatever the hell they want to; they themselves state, on their website in multiple places, that bitcoin transactions are routed through coinbase or similar.
I know, right? Such frauds... Kinda like how Mom n' Popco claim to take Visa, but in reality the transactions are routed through Network Merchants or Fiscorp or authorize.net. A bunch of lying liars! What does it matter that I can give them a credit card and they send me product, if they didn't personally wave the magic wand of money creation to turn that into USD?
Seriously, lose the hate-on (sorry, this irrational fear of BTC doesn't quite rank all the way up to the level of monkeys flinging poo... more like sheep running away from the rising sun every morning) for Bitcoin. Step back and think about what you believe about Bitcoin, and before posting more garbage, ask yourself: Could you say the same thing about the US financial system?
Ponzi schemes... Like Madoff? More SEC oversight... Like Enron? Useful for money laundering... Like a briefcase of USD$100s? Early adopters have an edge... Like the Rockefellers or Carnegies or Vanderbilts?
I know, you don't really care what I have to say about this, because you lost a few bucks trying to game a sytem you didn't understand, and no one can ever explain that away for you. But really, a great many of us use Bitcoin, for legal purposes, and find it extremely convenient. And like it or not, you can't do a damned thing about that.
The price of a traded intangible such as bitcoin only reflects supply and demand. You have no worthwhile domain knowledge about that until after it's happened. Nor do you have any knowledge of when Bitcoin organisations are going to fail or go rogue, nor what the market reaction will be.
It's certainly a gamble. That you think you can get ahead of the odds is a bad sign for you.
Haha. You're funny. I have knowledge of it systems and protocols and what I believe to be a correct view of finances.
Barring extraordinary outliers, it's possible to well enough predict things. To a man who had never seen an analogue watch before, which way the hands go round would be a 50/50 proposition. To the rest of us, it's a sure thing.
Just because you think Bitcoin is a gamble doesn't mean it is. It will either succeed or fail based on a myriad things. Chance is a very small part of that.
Haha. You're funny. I have knowledge of it systems and protocols and what I believe to be a correct view of finances.
Again something thought by all those techies that lost money on .com stocks.
Look, obviously you believe you're better than that. I'm not going to convince you otherwise. Only time will do that.
You know why they handicap horses and the bookmakers make odds? Because if they didn't, analysis would allow the gamblers to beat the house. You clearly have no idea how randomness works.
Bitcoin will either succeed or it won't. Some might be having a punt but others believe they see structure which affirms one or the other outcome. They may be wrong but that makes it not gambling.
I'm done with this. Take a course on statistics or something. You didn't even get the right name for what you're describing.