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MT.Gox GONE ? any comments ?

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David R Allen    318

this from Reddit ... I hope no-one objects to this reposting.

---------------

Hello friends,

MtGox is gone. So let's prepare ourselves.

On Tuesday, and for the rest of the week, all hell will break lose in the media. It will be blamed on MtGox, it will be blamed on Bitcoin, it will be blamed on the "bug," and it will, more than anything, be blamed on the "lack of regulation." Pundits and "experts" of all types will weigh in on the calamity. It will be world news in a matter of hours.

Get ready, because it will be an ugly week.

For all of you who lost money, my heart goes out to you. Some people lost a little, some lost a fortune. It will make people sick, and depressed, and full of grief. Personally, I had over 550 BTC in Gox. I will never get any of that back. If misery loves company, then we'll be enjoying a grand feast today.

I should have known better, of course. I take responsibility for leaving those funds with an entity that had proven incompetence repeatedly. I chose to ignore even my own warnings, for nothing more than the sake of convenience.

Gox is still at fault, to be sure, but I have learned the lesson. I hope it is not such an expensive lesson for others. And for all you observers, please take a moment to consider it as well.

Be mindful, however, that the wrong lessons are not learned, for that would be the true tragedy, indeed.

Let me suggest that the lesson is not that Bitcoin is broken. Bitcoin is fine.

Similarly, the lesson is not that security is impossible. Those who know what they are doing, can achieve it and help others to do so.

The lesson is not that nobody can be trusted. There are countless good men and women in this community who are worthy of trust, and some of the very best people I've ever met.

And finally, the lesson is not that we ought to seek out "regulation" to save us from the evils and incompetence of man. For the regulators are men too, and wield the very same evil and incompetence, only enshrined in an authority from which it can wreck amplified and far more insidious destruction. Let us not retreat from our rising platform only to cower back underneath the deranged machinations of Leviathan.

The proper lesson, if I may suggest, is this: We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world. This is the harsh truth. We are building the channels, the bridges, and the towers of tomorrow's finance, and we put ourselves at risk in doing so.

We are at risk from accidents. We are at risk from fraud, from corruption, and from evil. We are at risk from journalists seeking headlines and from politicians seeking power and glory. We are at risk from the very market we are trying to build - a market which cares not about our portfolio, our ambitions, or our delicate sympathies.

For all these risks, devastation will befall us repeatedly. Some of us will be discouraged. Some will be ridiculed and insulted. Some will be tricked, or swindled. Some of us will be crushed or caged. We will be set upon by all manner of antagonists, repeatedly, for a long time.

So why do we do it? Why do we build these towers that fall down upon us? Why do we toil and strain and risk our precious time, which is the only real wealth we possess?

Because the world needs what we're building. It needs it desperately. If that matters to you, as it does to me, then hold to that thought. You will see through the smoke, and your wounds will heal.

So shake it off, brothers, for this won't be the last calamity endured before the win.

Tonight, my heart is with you all.

Tomorrow, my head is down. My eyes are open. And I am building.

Toward peace and freedom,

-Erik Voorhees

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Brad Wheeler    296

Mod note: Merged threads "MT.Gox GONE ? any comments ?" and "Mt. Gox is Gone - by Erik Voorhees" because they are related --> moved this merged thread to General Discussion.

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Todd Erickson    212

What information do we have that they are actually "gone"?

 

Last I heard, they were moving locations and very close to re-enabling transfers.

 

Seems like they could be moving web servers and/or preparing to implement their revised platform. So couldnt this be the early stages of a new launch?

 

YES - it seems ominous, but I guess I waiting for more "concrete" proof.

 

Boy I must be an optimist

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I had (almost) everything on Gox. For me it was that I have no strength to carry on with bitcoin. I stay connected to the project but I need a long break. Certainly some years.

It's my fault. The warnings were there, but I did not want to see. I've waited too long. Even stupid keep all bitcoins on a 3dth party service. But I've just started so with Bitcoins at the End of 2012

and I had not changed it to this day.

 

It's only money. Although in my case a lot of money. Nearly all my bitcoin money.

 

Perhaps still something develops:

http://de.scribd.com...-Strategy-Draft

 

What you think? Maybe not realistic. People are glad to get rid of Gox.

 

Very sad at the moment. Must think of something else. A very hard lesson.

 

I will come back later to read your answers.

 

EDIT: I did not take part in this crazy speculations, that determined the trading at the end.

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David R Allen    318

 

Very sad at the moment. Must think of something else. A very hard lesson.

 

I will come back later to read your answers.

 

In times of financial trouble I have always been able to remember what is really valuable to me.

Granted, I have never gone hungry, lost the roof over my head or done without the Canadian medical system.

I remind myself I am grateful for every breath I take, every day I wake and for the people in my life who do not measure me by what I have in my pocket, but by who I am as a person.

 

Oliver, from a small town on the west coast of Canada, I understand your sadness and I sincerely wish your quick recovery from this financial setback.

 

Stay the course.

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What information do we have that they are actually "gone"?

 

Last I heard, they were moving locations and very close to re-enabling transfers.

 

Seems like they could be moving web servers and/or preparing to implement their revised platform. So couldnt this be the early stages of a new launch?

 

YES - it seems ominous, but I guess I waiting for more "concrete" proof.

 

Boy I must be an optimist

 

Shutting down a multi-millionaire website without any notice about that to its customers is way more than a concrete proof, is a death sentence.

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Todd Erickson    212

Well - Maybe there is still hope.

 

This just appeared on their web site:

-------

Dear MtGox Customers,

In the event of recent news reports and the potential repercussions on MtGox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,

MtGox Team

--------

 

Mark is still trying to protect his customers....

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Tim Cotten    7

Well - Maybe there is still hope.

 

This just appeared on their web site:

-------

Dear MtGox Customers,

In the event of recent news reports and the potential repercussions on MtGox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,

MtGox Team

--------

 

Mark is still trying to protect his customers....

Anything is possible, indeed, there is a non-zero chance that MtGox could reopen tomorrow, fully solvent, with no restrictions on withdrawals.

 

Unfortunately that seems not only high improbable, but practically impossible. If their problems were restricted purely to a technical issue with malleability then there would never have been a justification for halting trading and shutting down the entire site. As a software developer and technical executive I can't imagine a case where either I or my Marketing/PR team would communicate in this manner to my customers.

 

The conclusion, though saddening for me as well (having lost a portion of my day-trading holdings), is that MtGox cannot currently make good on its obligations and cannot reopen.

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Tim Cotten    7

Being naive does not help. Based on their actions I would say it is highly improbable for mtgox to reopen the site, and ludacris to think they will survive the scandal.

 

Exactly.

 

It should also force ourselves to look inwards at our own situations whether as customer or provider to attempt to identify future threats.

 

There should never have been even the slightest possibility of a discrepancy between the wallet amounts and what was wired out from the transactions going unnoticed for more than 24 hours. This is not only a technical failure, but a complete failure in basic business and accounting practices. It simply should never have been possible.

 

Although, come to think of it, it does represent an interesting business opportunity in developing automated accounting software for wallet sites.

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please check the news:http://www.businessinsider.com/reports-mtgox-halts-all-trading-2014-2

how did Mt.gox lose over about 750k BTC. i think the exchange's sucess is management issue, not only in technology side, they should use cold storage to keep at least 90% bitcoins,

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Derek Watson    28

How long do you keep looking for something you own before you finally have to admit that someone has stolen it? You never know that something has been stolen, you are eventually forced to assume it has.

 

There were three sorts of people who had money on Gox.

 

The first is people who bought bitcoin and trusted Gox to look after it. Leaving your funds on an exchange is like changing some currency at the airport and asking if you can leave your wallet there because you are frightened of getting it stolen in the departures lounge. We need to get the message across that you trust your bitcoin to a third party at your own risk, or speed up multi-sig so that they can't spend it without your countersignature. Sympathy with this group: 4/10 because some of them were noobs.

 

The second is people who were frequent traders who left it on Gox to trade with. These are people taking professional risks and Gox going t*ts up was one of those risks. Sympathy with this group: 1/10

 

The third is the Panglossian optimists who transferred a few perfectly good bitcoin INTO Gox through bitcoinbuilder when it was obviously going t*ts up in the hope they could double their money. They knew perfectly well that Gox was on life-support and the padre was standing by. Sympathy for this group: 0/10 (I am in this group).

 

I would like Gox to get back to trading and put all its future profits towards paying back all the coins it lost, starting with the smallest shareholders first. Followed by and end to hunger and world peace. If it did, it would be the most expensive exchange and it would start with zero trust, so who would use it? Nobody. Far more likely that it will write off all its losses and start again under a new name.

 

Is the answer regulation? I don't think so. It is true that you only really appreciate the army and the police when they're not there, but future exchanges are going to have prove they they are solvent and the best way to do that is to do the maths in public.

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Todd Erickson    212

Some important details seem to be getting lost in the emotional and intellectual rhetoric:

 

1 - There is no blockchain evidence that I am aware of that would suggest that Mt Gox has "stolen" any Bitcoins. Technically speaking, they were ALWAYS the property of Mt. Gox, since the end user was never in possession of the private key. The verb "LOST" or possibly "Destroyed" may be more applicable. This is literally the same as handing a stranger on the street all of your money, asking for their cell phone number so that you can call them when you want it back, then being surprised when the phone number gets disconnected. Without a contract or receipt, in the value of a sovereign currency, there is no recourse.(currently)

 

2 - For everyone (like me) who had "real currency" being held at Mt. Gox - There will be legal recourse in a bankruptcy hearing. Hopefully everyone has documentation that shows how much currency they had on hand. The number of "Bitcoins" being held "on your behalf" could be meaningless (legally anyway). There is no legal precedence that Bitcoin would be used as an asset during a bankruptcy settlement. However, since it "can" be liquidated for currency, a Judge may find this to be equivalent to an asset and proceed along those lines. That is of course, if they can find the public and private keys for the wallets....

 

3 - To "Lose" 750,000 Bitcoins would imply that someone else "has" them. YES, Mt Gox could spend its customers balance of Bitcoins (since they are not really the customers anyway) - but it would be very clear that they were indeed "being spent". To date, I have not seen any Blockchain analysis that would suggest that such large amounts are being misdirected. The "transaction malleability" flaw cannot be used to "steal" bitcoins, only to induce them to not be built into the blockchain (zero confirmations). That would imply that Mt Gox customers somehow did NOT notice that the Bitcoins they were sending/receiving never confirmed. That is virtually impossible as blockchain analysis has been done many times and shows "unconfirmed" transactions. So none of the facts here add up so there is going to need to be quite a bit more research before anything can be concluded.

 

Its probably a good time to itemize REALLY what Bitcoin is and is not:

  • BTC is not recognized by the U.S. or any foreign government as legal tender.
  • BTC is a decentralized, peer-to-peer system where BTC is sent directly from one person to another over a network of computers, without involvement of a third party money transmitter or bank.
  • BTC is not a check, and does not require any document or writing.
  • BTC is not an instrument or device for the payment or transmission of monetary value; like a dollar or a peso, it is itself the monetary value.
  • BTC does not obligate any third party to pay its value to its holder; BTC itself is the payment and value.
  • BTC is not a stored value device; it is not a card or other tangible object, and no party besides the holder of bitcoin himself stores any value.

These classifications make Bitcoin truly a new form of payment and/or currency.

 

Next, I hate to point out the obvious, but ALL of the "remaining" Bitcoin exchanges and wallets do not offer ANY more protection that what you have now at Mt. Gox. YES, they may be in better financial shape and they may have other vested interests, but one technical error or employee mistake could just as easy result in a COMPLETE LOSS of all of your Bitcoins at any of them. With that said, you should keep as few as possible Bitcoins in them as necessary.

 

So if you have not learned how to use a local wallet with offline (cold) storage - Now would be a good time to learn.

 

Lastly - The moral to the story here is present in thousands of years of banking history: Trust Matters but it is not infallible. Limit your risk by diversifying

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Bitcoin at the very minimum is property, and there is an implication of an agreement to keep my property safe and not convert it, or be careless with it.

Otherwise, there should have been a big red flashing warning on their page prior to accepting anyone funds/bitcoins.

 

We can argue if MtGox has any duty or more specifically, a fiduciary duty, at a later date.

 

If argument is made indicating that transferring property to MtGox is like handing it to a untrustworthy street criminal; this will be a fun day in court. We will learn a lot.

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Joel Dalais    306
Next, I hate to point out the obvious, but ALL of the "remaining" Bitcoin exchanges and wallets do not offer ANY more protection that what you have now at Mt. Gox. YES, they may be in better financial shape and they may have other vested interests, but one technical error or employee mistake could just as easy result in a COMPLETE LOSS of all of your Bitcoins at any of them. With that said, you should keep as few as possible Bitcoins in them as necessary.

 

That's just wrong.

 

Yes technical errors can cause some losses, but depending upon your business model you would hopefully keep xxx amount as cold storage and not have an automatic drip feed from all your cold storage into your hot wallet.

 

Doing an (endless) automatic hot wallet refill is just silly business practice in my personal opinion, so yes, it can happen, but not if you run your Exchange so its impossible to happen.

 

And other Exchanges do offer better protection than MtGox (and better business practices), because the ones not affected have better software code (MtGox was using their own unique custom software). IBWT (for example) uses its own custom software. And I expect staff are trained different at other Exchanges (e.g. double check a customers transaction history and/or run it by a compliance officer before re-filling wallets).

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I should point out since there are many people chatting about this, including someone who authored a CNN story out today which someone sought my comment on (I doubt that my comment will ever be published though), that I never established an account at MtGox due in part to (but not limited to) what I felt were MtGox's off-putting identity requirements merely for establishment of an account (thus I never established one there). That said, I sense that this recent MtGox development (as well as those such as the regulatory changes in Russian Federation) will actually have the overall effect of accelerating P2P (Chromawallet, similar) wallet-to-wallet trade (particularly once Chromawallet or similar models finish their process in testnet and are released for 'the big time'), and overall, these developments may actually hasten the demise of website-based exchange services (which at some point in the near future, may be much less present in the market than they are now).

 

It's interesting, to be sure.

 

Cheers,

 

Colin

http://abis.io

http://angel.co/abis

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Derek Watson    28

OK, for 'stolen', read 'misappropriated'. It was the wrong choice of word.

 

'Technically speaking, they were ALWAYS the property of Mt. Gox, since the end user was never in possession of the private key'. Er - I don't think so. In the UK we have separate concepts for 'keeper' and 'owner'. Possession might be nine-tenths of the law but the one-tenth the courts do look at is ownership.

 

Just because Mt Gox may have possessed the technical means to transfer them, does not mean 'technically' (as in 'on a technical point of law') they belonged to Mt Gox. Technically they belonged to the owner, they were entrusted (or 'in trust') to Mt Gox which owed its customers a duty of care. (I'm not a lawyer but that sounds impressive).

 

It's more like handing your 'phone to a friend in the street to make a call for you and then being told that you aren't going to get it back, because you gave it to him and he can't remember or won't say what he did with it and you can't find him any more.

 

And I know it's easy looking through the old retrospectoscope, but Josh Jones (who set up a Web site to help people transfer a few last bitcoins into Mt Gox) recommended by Andreas on 18th ('if this situation does resolve itself, and I honestly think it will and I probably should be trading a bit of this, these people are going to get a tremendous discount on their bitcoin.') and cheerful Bitcoin_Charlie Shrem ('I see good news on the horizon for people who have funds stuck in MtGox') who mistook a bail out for a management takeover (although he has subsequently profusely apologised for getting this wrong) don't exactly come out of this smelling of roses, either.

 

Now if Gox re-opens tomorrow and all the bitcoins are safe, then not only will I take back everything I said and donate a bitcoin to Sean's Outpost, I will go and live there.

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I wonder whether the foundation could solicit VC firms to form an industry group that helps self-regulate bitcoin exchanges and give something like a seal of approval to exchanges that are in compliance with external accounting and so on?

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David R Allen    318

I wonder whether the foundation could solicit VC firms to form an industry group that helps self-regulate bitcoin exchanges and give something like a seal of approval to exchanges that are in compliance with external accounting and so on?

 

Ok David, help me out here.

 

Venture Capital firms form an Industry Group that helps Bitcoin Exchanges regulate themselves and let's them show their logo as a seal of approval, in the belief that they are in compliance with some global accounting system....

 

Anyone else see history repeating itself?

Seriously, what does Bitcoin need an exchange for?

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ashe    3

Well to see who stole the BTC, maybe we can micro it to the wallets which have been recently in the light of stealing. I know 2 wallets which have been associated with stealing coins, by hosting ;reputed domains and listed in the hidden wiki. They stole for the 2nd time yesterday the same method different wallet page. Below is the address who intercepts coins.

http://blockchain.in...zBgkqCcmgms3hjH

 

Associate wallets : https://blockchain.i...8sn9TQSFtQuFzxz

 

It all comes down to how anonymous bitcoins are, or do we know?

 

Anyone know how I can get in touch with a Mt.Gox crew member?

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