5 ms·

I am confused: If BC is not subject to ownership claims, how can anyone be harmed by the bankruptcy, etc? No one has "lost" anything through mismanagement, blah

I am confused: If BC is not subject to ownership claims, how can anyone be harmed by the bankruptcy, etc? No one has "lost" anything through mismanagement, blah blah.

makomk 11y ago
If I'm understanding correctly, the court found that he couldn't claim ownership of a particular, tangible set of bitcoins out of Mt Gox's holdings, but he's still a creditor of Mt Gox because they did owe him a specific number bitcoins.
- pbhjpbhj 11y ago
  >they did owe him a specific number bitcoins // That doesn't make any sense though unless bitcoins can be owned. If you could claim as a creditor for something that was of worth but couldn't be owned then one could say something like "I told Mt.Gox employees a joke, therefore I claim financial remuneration for the value of that experience I gave them.".
  - andrewla 11y ago
    As I understand it, the distinction is not whether or not you can own bitcoins. The distinction is whether or not you can own _particular_ bitcoins. If, say, a "sell it on ebay" store went bankrupt, I could say, "those are my Air Jordans", and I would get those particular shoes back. On the other hand, if a bank goes bankrupt, I can't say "I deposited those particular bills with those serial numbers". The court has ruled that bitcoins follow the latter principle, so if each depositor gets back 50% of the deposited bitcoins, I can't get back 100% by pointing to the particular bitcoins I deposited.
    - saalweachter 11y ago
      How about the analogy of robbing a bank vault versus robbing safe deposit boxes? If half the money is stolen from the bank vault, everyone at the bank has lost half their money (ignoring insurance, etc). If the contents of half the safe deposit boxes are stolen, you don't distribute the remaining safe deposit boxes among all the customers; half lost everything and half lost nothing.
    - TheCoelacanth 11y ago
      They didn't even say that you can't own particular bitcoins, just that in the specific case of MtGox you don't own particular bitcoins. To make the analogy to real money, if you put a stack of bills in a security deposit box in a bank, and the bank goes bankrupt, you can get the contents of the box back, because you still own those specific bills. On the other hand, if you write down the serial numbers of the bills and deposit them in a bank account, then the bank goes bankrupt, you can't go into the bank's vault and pick out the bills that match your list of serial numbers. You have to get in line with the other people who have money deposited in the bank, because you don't own those specific bills anymore. So, basically they just decided that MtGox operates more like a bank account for bitcoins than like a security deposit box for bitcoins.
  - FlyingAvatar 11y ago
    If I put a valuable antique coin in a bank's safety deposit box and the bank closes due to bankruptcy, I could sue to get my specific coin back because (a) the value is in a tangible item that, (b) the expectation is that bank is storing an item that is still specifically owned by me. If the bank was merely holding my money in an account balance, then I could not sue in this manner since I would be treated like any other debtor in the bankruptcy proceeding. Someone tried to sue MTGox to get their money back as if they were in the first situation. The court correctly ruled that the plaintiff was actually in the latter situation and they would have to be treated like a debtor.
    - sorokod 11y ago
      I think that "tangible" doesn't quite capture the difference between an antique coin and a bill with a known serial number.
      - genericuser 11y ago
        The bill with a known serial number quits being tangible when you deposit it into an account because you are only owed a bill not that bill. If you had put the bill with a known serial number in your safety deposit box, for instance if it was your first dollar ever earned you could sue for that bill the same way the coin is sued for by stating its serial number, since the bank was storing it as a tangible good, and not simply as a product of its value.
    - genericuser 11y ago
      While other people have correctly stated this point elsewhere in this topic. I think you have phrased it in a very simple and easy to understand way, which I feel anyone not able to understand would not be someone worth having a conversation on this topic with. Thank you for what I believe to be a correct and extremely dumbed down way of expressing the absurdity of anyone getting upset about this ruling. I will be stealing your analogy, as close to verbatim as I can remember, should I encounter a conversation on this topic in the future as it is much easier than trying to explain it in more abstract terms.
- zazzles 11y ago
  So they ruled that Bitcoins are fungible.
- bdcravens 11y ago
  No, they'll be owed what they had on deposit in fiat. However, if someone converted deposited money to Bitcoin, that's gone. (in the same sense as if I bought Reddit gold, or if I buy credits in an in-app purchase on my phone)

I am confused: If BC is not subject to ownership claims, how can anyone be harmed by the bankruptcy, etc? No one has "lost" anything through mismanagement, blah blah.

makomk 11y ago

If I'm understanding correctly, the court found that he couldn't claim ownership of a particular, tangible set of bitcoins out of Mt Gox's holdings, but he's still a creditor of Mt Gox because they did owe him a specific number bitcoins.

pbhjpbhj 11y ago
>they did owe him a specific number bitcoins // That doesn't make any sense though unless bitcoins can be owned. If you could claim as a creditor for something that was of worth but couldn't be owned then one could say something like "I told Mt.Gox employees a joke, therefore I claim financial remuneration for the value of that experience I gave them.".
- andrewla 11y ago
  As I understand it, the distinction is not whether or not you can own bitcoins. The distinction is whether or not you can own _particular_ bitcoins. If, say, a "sell it on ebay" store went bankrupt, I could say, "those are my Air Jordans", and I would get those particular shoes back. On the other hand, if a bank goes bankrupt, I can't say "I deposited those particular bills with those serial numbers". The court has ruled that bitcoins follow the latter principle, so if each depositor gets back 50% of the deposited bitcoins, I can't get back 100% by pointing to the particular bitcoins I deposited.
  - saalweachter 11y ago
    How about the analogy of robbing a bank vault versus robbing safe deposit boxes? If half the money is stolen from the bank vault, everyone at the bank has lost half their money (ignoring insurance, etc). If the contents of half the safe deposit boxes are stolen, you don't distribute the remaining safe deposit boxes among all the customers; half lost everything and half lost nothing.
  - TheCoelacanth 11y ago
    They didn't even say that you can't own particular bitcoins, just that in the specific case of MtGox you don't own particular bitcoins. To make the analogy to real money, if you put a stack of bills in a security deposit box in a bank, and the bank goes bankrupt, you can get the contents of the box back, because you still own those specific bills. On the other hand, if you write down the serial numbers of the bills and deposit them in a bank account, then the bank goes bankrupt, you can't go into the bank's vault and pick out the bills that match your list of serial numbers. You have to get in line with the other people who have money deposited in the bank, because you don't own those specific bills anymore. So, basically they just decided that MtGox operates more like a bank account for bitcoins than like a security deposit box for bitcoins.
- FlyingAvatar 11y ago
  If I put a valuable antique coin in a bank's safety deposit box and the bank closes due to bankruptcy, I could sue to get my specific coin back because (a) the value is in a tangible item that, (b) the expectation is that bank is storing an item that is still specifically owned by me. If the bank was merely holding my money in an account balance, then I could not sue in this manner since I would be treated like any other debtor in the bankruptcy proceeding. Someone tried to sue MTGox to get their money back as if they were in the first situation. The court correctly ruled that the plaintiff was actually in the latter situation and they would have to be treated like a debtor.
  - sorokod 11y ago
    I think that "tangible" doesn't quite capture the difference between an antique coin and a bill with a known serial number.
    - genericuser 11y ago
      The bill with a known serial number quits being tangible when you deposit it into an account because you are only owed a bill not that bill. If you had put the bill with a known serial number in your safety deposit box, for instance if it was your first dollar ever earned you could sue for that bill the same way the coin is sued for by stating its serial number, since the bank was storing it as a tangible good, and not simply as a product of its value.
  - genericuser 11y ago
    While other people have correctly stated this point elsewhere in this topic. I think you have phrased it in a very simple and easy to understand way, which I feel anyone not able to understand would not be someone worth having a conversation on this topic with. Thank you for what I believe to be a correct and extremely dumbed down way of expressing the absurdity of anyone getting upset about this ruling. I will be stealing your analogy, as close to verbatim as I can remember, should I encounter a conversation on this topic in the future as it is much easier than trying to explain it in more abstract terms.
zazzles 11y ago
So they ruled that Bitcoins are fungible.
bdcravens 11y ago
No, they'll be owed what they had on deposit in fiat. However, if someone converted deposited money to Bitcoin, that's gone. (in the same sense as if I bought Reddit gold, or if I buy credits in an in-app purchase on my phone)