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Mt. Gox demise as told by a Bitcoin insider

140 points by lelf 6y ago

staplers 6y ago
It's always amazed me how anti-crypto and behind the times (about bitcoin) this forum has been. Remember your imagination for the possibilities of the early web and computers.
- deleted 6y ago
  [deleted]
- TylerE 6y ago
  Bitcoin as had the better part of decade and it's still practically useless in the real world.
  - trixie_ 6y ago
    Case in point I guess. It is kind of amazing how one of the most important recent technological developments has been written off for more than a decade by the users of this site. Same with TypeScript for a long time as well, and then there was a magical turning point somehow that the entire zerg all of a sudden discovered static typing was actually useful. For one of the best sites for discussing the latest happenings in the computer software world, crypto has somehow been consistently rejected as useless when it beats other stores of value in almost every metric. Crypto has value simply because it is better at storing value than the mediums that came before it.
    - TylerE 6y ago
      There is nothing anyone could say that would convince you aren't on the OneTruePath(tm) is there?
      - trixie_ 6y ago
        I would love to have an intelligent debate with you. To respond to your original post. Many people, myself included, find crypto an easier, faster, cheaper way to send large amounts of money versus ACH, wire transfers and western union.
        deleted 6y ago
        [deleted]
    - matkoniecz 6y ago
      > beats other stores of value in almost every metric. Which metrics you selected so crypto beats following in "almost every metric"? - real estate - gold - $ in cash - $ in a bank account - stocks
      - trixie_ 6y ago
        Metrics as in how easy is it to store and send, how resistant is it to inflation and manipulation. - Land - Can't send it. - Gold - Physical so more difficult to store, secure, send, and verify. - Cash - Easy to manipulate by the government. How many trillions printed for coronavirus? I wouldn't hold too much of it. - Stocks - Cant send it. More shares can be created by the board of directors. Crypto is made to do one thing - store value, and do it well.
        sumedh 6y ago
        > Crypto is made to do one thing - store value, and do it well. Does it really do it well when your "investment" can fluctuate between $5000 to $40K?
        quickthrower2 6y ago
        Well bitcoin in particular but some crypto is inflationary also
        umanwizard 6y ago
        Well, technically you can own a gold ETF rather than physical, and whenever you want to send value to someone, sell it and wire them the money (free on Fidelity and takes on the order of as long as a few Bitcoin confirmations). This is not too different in effect from being able to “send gold”. Anyway... despite the theoretical limitations of cash, hard currencies in practice have proven much, much more stable than Bitcoin. There hasn’t been hyperinflation in any of the major hard currencies (USD, CNY, GBP, EUR/D-Mark, CHF) since the invention of the fiat system. You can argue that cash can be manipulated and is therefore a worse store of value than Bitcoin but it simply isn’t backed up by concrete evidence in reality
    - woodruffw 6y ago
      > Crypto has value simply because it is better at storing value than the mediums that came before it. Is this a serious claim? The last one and a half months have seen extraordinary speculation in cryptocurrency markets, even by the standards of cryptocurrencies. Lots of wealth is being produced; relatively little is being stored.
      - trixie_ 6y ago
        It's in the news everyday. Huge investment firms diversifying into crypto. So yes, value is being stored. The market cap of cypto has been rising exponentially - exactly because it is a good store of value. Which means easy to store, and highly resistant to manipulation and inflation.
        woodruffw 6y ago
        > Huge investment firms diversifying into crypto. So yes, value is being stored. Something being a desirable investment vehicle usually makes it an undesirable store of value: a store of value should be stable and predictable, not subject to significant changes in any direction. > Which means easy to store, and highly resistant to manipulation and inflation. These are, again, negative qualities in a store of value. A good store of value is inflates and deflates exactly as much as required to retain its backing value. Inflation means loss of value; deflation represents a liquidity risk when exiting the asset. More generally, this is an indictment of the cryptocurrency community's basic financial literacy. You can't just call a speculative instrument a "store of value" because every who bought into it in the past two months has seen a positive return; that's just not what it is.
        jerrymiller 6y ago
        Case in point still. The contradictions you make are astounding. What's more astounding is that you are not even noticing them. > Huge investment firms diversifying into crypto > this is an indictment of the cryptocurrency community's basic financial literacy I suggest that maybe it's you who lacks basic financial (and econ) literacy, not investment firms or the "cryptocurrency community" > You can't just call a speculative instrument a "store of value" because every who bought into it in the past two months has seen a positive return No, everyone who bought BTC at _any point in the past_ and didn't sell are seeing positive returns. This is the definition of a good store of value. You are conflating SoV properties with volatility. They are orthogonal. SoV is a long-term play.
    - umanwizard 6y ago
      Low volatility is a pretty important metric for stores of value. By that metric almost anything other than GME shares is better than cryptocurrency: cash in any hard currency, gold, silver, luxury watches, ...
      - trixie_ 6y ago
        I guess remind me in 10 years and we'll see how returns on crypto compares to 'stocks, hard currency, gold, silver, luxury watches' Funny how all of those things are not supply constrained, so they seem to be at a disadvantage from the start. But we'll see.
        umanwizard 6y ago
        I didn’t mention “possibility of high returns” as a metric. I said “low volatility”.
        optimalsolver 6y ago
        >I guess remind me in 10 years and we'll see how returns on crypto compares to 'stocks, hard currency, gold, silver, luxury watches' You're literally supporting the argument of the person you're replying to without even realizing it. Disproportionately high returns indicates a highly volatile asset, and it's just as likely to go the other way, resulting in staggering losses. These are not markers of a good, long-term storage asset class.
        alphabettsy 6y ago
        I think you misunderstand a store of value. Extremely volatility is not a positive characteristic. Would you want to be paid in a currency that regularly changes value 5-10% day to day?
      - AgentME 6y ago
        There are decentralized cryptocurrencies that have achieved low volatility, such as DAI. I don't think it's ever gotten more than a couple percent from its $1 target price since being created. (I assume it almost never gets talked about because there's no profit from investing in it and hyping it to others.)
    - underwater 6y ago
      TypeScript was about bringing traditional, proven, approaches to a trendy but immature language. That's exactly the opposite of Bitcoin.
  - elif 6y ago
    Something that can continue to gain value for 10 years has no practical use? Someone had better remove the vast majority of the world GDP which is in financial markets.
    - kortilla 6y ago
      Financial markets represent ownership of companies that produce things or provide services. Or they are for debt on loans to governments, companies, or people that use it to finance something.
      - elif 6y ago
        Maybe before 1980 that is a sufficient explanation of abstract capital. It really does not resemble modern reality.
- flatiron 6y ago
  Nothing wrong with hearing voices not within your echo chamber. I always take voices here I don’t agree with with more weight because they might be right.
- wmf 6y ago
  Possibility of the early Web: getting free overnight air shipping on 50-pund bags of dog food. Possibility of cryptocurrency: becoming "fuck you" rich in a year without doing any work. Yeah, you have a point; crypto does have amazing potential.
  - quickthrower2 6y ago
    Ooh I though you were setting up: Possibility of crypto: getting free overnight air shipping on 50-pund bags of weed
  - KirillPanov 6y ago
    > becoming "fuck you" rich in a year without doing any work. That's how most SF tech startups appear to the average blue-collar person. It's all about perspective.
- xtracto 6y ago
  It may be a matter of demographics. Slashdot had the same effect with other new technology (ipod. Less space than a nomad). And Usenet or irc forums were full of people discounting myspace, FB, and other newer technologies. Hacker news has changed a lot since the time I joined. I came from /. And osnews . And initially it was strongly pro business . Now it has became more "liberal " and pro open source.
  - blhack 6y ago
    Curious if you've found a place that feels the way that HN did back then.
    - 1996 6y ago
      If you do, let me know!! Somedays it really looks like I'm gonna see here AARP ads any time soon! The community is aging and getting out of touch with the market without even realizing it
    - xtracto 6y ago
      Not really but mainly because I haven't looked. I personally lean more towards left/socialist views. So the current HN groupthink is more aligned with my views. Maybe I am part of the problem: a group of people that joined HN and affected the discourse.
- quickthrower2 6y ago
  Yeah it’s a collective “just use Rsync” blindness. I think Defi is pretty exciting and once it’s mainstream with more regulated options with KYC and tokens backed by fully audited companies it has some amazing potential. Also see https://news.ycombinator.com/item?id=26041057 https://news.ycombinator.com/item?id=26041057 - HN wants it’s mp3s, so why doesn’t it want it’s money?
  - xtracto 6y ago
    Exactly! I find it so surprising how on one side stories like the one you linked are heavily upvoted, and many here complain about Google, Facebook, monopolies, etc. But when it comes to z technology that is disruptive enough to solve many of the underlying problems , people are fast to discount it because a certain implementation is slow, inefficient, misused, etc. The discourse that I would LOVE to see here is HOW to make it better. Is BCH really better? Is XlM? even XRP. Like when databases are discussed, we get interesting points for Postgres or MySQL or even Mongo. That's the constructive view.
- Noos 6y ago
  I do, and i see what the web has become now, and it makes me less likely to be giddy about the next new thing. I think we're at a point where the net is no longer novel enough to be magical, and we see the reality is a lot more mundane and even harmful than anyone predicted. You can't just throw out grand concepts and wish for magic now; there needs to be a lot more reflection on the technologies people introduce. Are they sustainable, in that they can maintain their original purpose? Do they increase the attack surface of people, groups and societies greater than the benefit? Do they require skill and vigilance beyond the average person to use safely? I don't think optimism and "it will all work out" is a rational position any more.
- vangelis 6y ago
  How are your shitcoins?
  - staplers 6y ago
    God they're doing so well especially today after Tesla announced buying $1.5 billion worth. Thanks for asking.
zhoujianfu 6y ago
FYI, this “Bitcoin Insider” (there should be no such thing in a decentralized currency?) apparently took $5M from mtgox, claiming he could get them through regulation in the U.S. (he did no such thing)... then sued them for $16B after they went bankrupt, holding the thousands of creditors hostage for years... so far. And apparently now fortress will give him (CoinLab) $11M to move (slightly) out of the way.
- wmf 6y ago
  Yeah, Vessenes is so far inside that he has a massive conflict of interest in this case. He's also acted in pretty bad faith. Here's the story from a knowledgeable outsider: https://blog.wizsec.jp/2019/04/coinlab-v-mtgox-imaginarium-of-peter.html https://blog.wizsec.jp/2019/04/coinlab-v-mtgox-imaginarium-o... Even putting aside the Mt. Gox bankruptcy, the original contract with CoinLab looks pretty bad: https://www.courtlistener.com/recap/gov.uscourts.wawd.192566.1.1.pdf https://www.courtlistener.com/recap/gov.uscourts.wawd.192566... They agreed on damages of $50M if either side breached the contract but neither party ever had nearly that much money and the deal was only worth less than $1M per year. IANAL but this seems like a dumb suicide pact.
  - slavik81 6y ago
    > IANAL but this seems like a dumb suicide pact. IANAL either, but those sound like punitive damages, which are unenforceable. The court could accept the assessment in the contract, but if it's blatantly unreasonable, they are supposed to pick a value that more accurately matches the damage incurred due to the breach. Not that I would want to be in a situation where you have to depend on that...
    - staticautomatic 6y ago
      They’re called liquidated damages and they’re typically only enforceable when they are reasonably close to the actual monetary harm that would be caused by a breach of a contract.
- deleted 6y ago
  [deleted]
vmception 6y ago
This article starts off with an ambiguous premise. The SEC Enforcement Division asking about Mt Gox in early 2013 has nothing to do with Mt Gox being in securities trouble. It more likely means the SEC was following funds in a bitcoin transaction that were deposited or transferred to that exchange. Or fiat transferred by an investor following a securities promoter’s instruction on how to invest via bitcoin. The article then switches to other issues about Mt Gox that also never involve the SEC or securities issues again. There is a pervasive meme amongst cryptocurrency enthusiasts of the SEC being an all encompassing police. It is weird and counterproductive.
otoburb 6y ago
>>“It could’ve been a trillion-dollar company,” Vessenes said. “It’s so sad.” The current $16 billion CoinLab claim against Mt. Gox is based on what the company thinks their portion of Mt. Gox would be worth if it had been managed well, he said. Quoting this part of the article to emphasize the absurdity of CoinLab's assertion. >>Peter Vessenes has spent years trying to recoup lost coins This article byline is strange because the CoinLab claim is entirely for cash/fiat damages, and not for the remaining cryptocurrency that the estate holds. Creditors know this because CoinLab's claim is evidently still incurring delay and interest, which the Tokyo District Court only affords to monetary Mt. Gox claims.
- wmf 6y ago
  If the US part of Mt. Gox was managed well it would today be... Coinbase? Which is soon to be worth $63B.
  - otoburb 6y ago
    Coinbase didn't need Mt. Gox to become what they are today. I'm not sure this line of reasoning holds much water. Perhaps if we were to follow Vessennes' absurd chain of reasoning to its logical conclusion, CoinLab itself should be countersued by Mt. Gox creditors for failing to become as successful as Coinbase given their head start in the US.
    - snoshy 6y ago
      Coinbase did need something like Mt. Gox to become what they are today, but not in the sense you imply. The whole Mt. Gox episode opened people's eyes up to the fact that large institutional frauds could take place with their Bitcoin wealth, and that there indeed was a need for a well managed reputable provider for these services. Bad actors can come in many sizes, and a bad actor of Mt. Gox scale also brought about plenty of controversy and media attention that was heaped on this subject. It benefited Coinbase in no small part to capitalize on this already acknowledged need for a business.
    - wmf 6y ago
cecida 6y ago
The problem with trying to suggest that Bitcoin is a fundamentally flawed idea is that you will be down voted to oblivion. As a computer science concept it's rather mundane. We know what merkle trees are. It's an extremely wasteful form of computing. Mining is an exercise in wastefulness. Proof-of-work is one of the worst concepts I've ever seen. Ah, Tether.
- kneel 6y ago
  I've never seen self propagating transaction networks that pay for themselves and recruit their own evangelists before bitcoin. Seems pretty amazing.
  - LegitShady 6y ago
    It's called religion. They just separated the transacting (tithing, etc) from the self propagating evangelism. The tithing was the important part, though.
    - kneel 6y ago
      That's a pretty unique take! I like it
- vmception 6y ago
  that has nothing to do with this article, I’m sure there will be plenty of other bitcoin articles less tangentially related to your copypasta where you’ll be more in context pasting that
- lukifer 6y ago
  > Mining is an exercise in wastefulness While I don't disagree (I think PoW should be carbon-taxed or fully outlawed), a massive portion of the non-crypto economy is intentional waste for social signaling purposes: https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good
- nyolfen 6y ago
  > As a computer science concept it's rather mundane. We know what merkle trees are. a practical, robust solution to a long-standing computer science problem (byzantine generals) that directly results in an entire new branch of computer science and economic sector is hardly mundane. bitcoin solves previously intractable trustless coordination problems. we are only at the early stages of discovering what it makes possible; you are the newspaper editor laughing at the web in 1996.
chaostheory 6y ago
Since we're on the subject, how do people think the Tether situation will play out?
- askmike 6y ago
  That's a very different subject, I don't see any overlap
  - chaostheory 6y ago
    Mt Gox was responsible for the first bitcoin bubble. Tether has been responsible for multiple bitcoin bubbles now, using their crypto that was supposedly backed by the USD 1 to 1. The rationale for pumping bitcoin is the same: to recoup stolen money. Look at the money inflow graph. Tether surpasses everything else https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin
    - askmike 6y ago
      There have been many bubbles before Mt Gox and there have been many after. > Tether has been responsible for multiple bitcoin bubbles now No one in the space actually believes this.
      - chaostheory 6y ago
        > There have been many bubbles before Mt Gox and there have been many after. Before Mt Gox there were no giant bubbles. Post Mt Gox, all of the giant bubbles were most likely caused by Tether. > No one in the space actually believes this. That is not true.
  - optimalsolver 6y ago
    In terms of losses, Tether will be to Mt. Gox what Little Boy was to a firecracker.
    - chaostheory 6y ago
Groxx 6y ago
There's also this entertaining presentation from an outside researcher (tracing down the missing money) from 3 years ago (I don't know what's up with the framerate, but really, it's worth watching): https://www.youtube.com/watch?v=l70iRcSxqzo https://www.youtube.com/watch?v=l70iRcSxqzo It's quite a rollercoaster of failures.
- otoburb 6y ago
  The outside researcher, Kim Nilsson, wrote a recent summary[1] in response to articles attempting to whitewash CoinLab's involvement in the case. [1] https://blog.wizsec.jp/2021/01/earlier-mtgox-payouts-coinlab.html https://blog.wizsec.jp/2021/01/earlier-mtgox-payouts-coinlab...
MagicalTux 6y ago
Being directly involved in this I'm not going to comment as of the veracity of the article myself, but rather point to a response of when this was posted on twitter (look at the extra responses for some fact checking): https://twitter.com/wizsecurity/status/1355973512012292096 https://twitter.com/wizsecurity/status/1355973512012292096
- koolba 6y ago
  The default twitter algo selection of comments is random gibberish. Anything more specific to point to?
  - marcolussetti 6y ago
    I think he's pointing to the comments by @wizsecurity specifically, in response to the @bloomberg one.
  - Qub3d 6y ago
    Here's the thread unrolled: https://threader.app/conversation/1355926433646972933/UcAWDzZDZk https://threader.app/conversation/1355926433646972933/UcAWDz...
  - MagicalTux 6y ago
    The WizSecurity comments are shown as a thread, those are the most relevant imo
- modeless 6y ago
  For those who don't know, MagicalTux is Mark Karpeles, owner and CEO of Mt Gox. Assuming this is his real account. And for what it's worth, I agree that this is a bad article based on what I know about the situation. Bloomberg reporting in general is questionable these days if you ask me. I don't trust them since the false Supermicro hack story (never retracted BTW) and I've seen several other bad stories from them since then.
  - rasengan 6y ago
llamataboot 6y ago
Still waiting for the 50 or so BTC I had in MtGox when it disappeared. Think I should get what they were worth then, or what they are worth now :D
- wmf 6y ago
  Would you prefer 100% of what it was worth then or 23% of what it's worth now?
  - Lambdanaut 6y ago
    Why 23%? Seems arbitrary. Is that the amount in BTC that is expected to be paid out to creditors?
    - wmf 6y ago
      Yes.
      - perennate 6y ago
        That is not at all my understanding of what the draft rehabilitation plan says. There are fiat assets and fiat claims and other complicated factors. The payout would depend on the BTC/BCH-to-yen conversion rate at the time that the distribution begins, and the total claims that make it through all the way to the end. Based on one creditor's read of the plan, along with the current exchange rates and such, the current expected payout is closer to 0.16 BTC per 1 BTC held, some of which is paid back in Japanese yen and some as BTC/BCH [https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_gox_draft_rehabilitation_plan_payout_calculator/ https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_...].
    - perennate 6y ago
      It is much more complicated than that because part of the BTC will be paid from yen fund and part from BTC fund. And there are both fiat claims and cryptocurrency claims. The draft document has been made available to creditors but it says not to share with the public. But it does say that BTC and BCH claims will be valued at the BTC/BCH-to-yen conversion rate as of the time of commencement of rehabilitation proceedings (749,318.83 yen/BTC). And the payout will be less than that because the remaining assets will be distributed to creditors in a prorated system (although certain small fiat claims and possibly other claims may have higher priority). There is definitely not a specific amount of BTC currently that would be paid to creditors per BTC that they held, since it depends on the final total claims (which is mostly finalized but may still change a bit), and presumably on the value of the remaining BTC/BCH assets held by the trustee at the time of distribution. One creditor made a calculator to compute the payout based on the current exchange rates and such: https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_gox_draft_rehabilitation_plan_payout_calculator/ https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_...
ece 6y ago
The Darknet Diaries episode on Mt. Gox was pretty good: https://darknetdiaries.com/episode/9/ https://darknetdiaries.com/episode/9/
perennate 6y ago
CoinLab's lawsuit is a big part of the reason why creditors with actual legitimate claims still haven't received their share of the remaining assets. Somehow CoinLab thinks their claim, which hinges on vague and unrealistic what-ifs, should have priority over Mt. Gox users who held dollar/cryptocurrency assets in their Mt. Gox accounts. Obviously CoinLab's ridiculous claims will eventually be thrown out, but it has severely delayed the insolvency proceedings and eventual distribution process. Vessenes is not a "Bitcoin insider", he is a snake who seeks to steal billions from individual users who lost assets that they had held with Mt. Gox. Here is what former Mt. Gox users who are still waiting for the distribution process think of this Bloomberg article: https://old.reddit.com/r/mtgoxinsolvency/comments/l9m3iz/coinlab_bloombergs_matt_leising_tries_to_spin_the/ https://old.reddit.com/r/mtgoxinsolvency/comments/l9m3iz/coi...
nangz2 6y ago
I am a MtGox creditor and intermittently get offers from Fortress Capital to buy my BTC for some % of its value. I tell them where to stick it. It now looks like Vessenes is in cahoots with Fortress Capital in an arrangement where they drag out the frivolous coinlab lawsuit which encourages desperate creditors to sell out to Fortress. Vessenes is really an awful piece of subhuman filth. He has zero claim to anything, but is causing misery to thousands of creditors. I hope all his descendents continue to be aware of this.

140 points by lelf 6y ago

It's always amazed me how anti-crypto and behind the times (about bitcoin) this forum has been. Remember your imagination for the possibilities of the early web and computers.

deleted 6y ago
[deleted]
TylerE 6y ago
Bitcoin as had the better part of decade and it's still practically useless in the real world.
- trixie_ 6y ago
  Case in point I guess. It is kind of amazing how one of the most important recent technological developments has been written off for more than a decade by the users of this site. Same with TypeScript for a long time as well, and then there was a magical turning point somehow that the entire zerg all of a sudden discovered static typing was actually useful. For one of the best sites for discussing the latest happenings in the computer software world, crypto has somehow been consistently rejected as useless when it beats other stores of value in almost every metric. Crypto has value simply because it is better at storing value than the mediums that came before it.
  - TylerE 6y ago
    There is nothing anyone could say that would convince you aren't on the OneTruePath(tm) is there?
    - trixie_ 6y ago
      I would love to have an intelligent debate with you. To respond to your original post. Many people, myself included, find crypto an easier, faster, cheaper way to send large amounts of money versus ACH, wire transfers and western union.
      - deleted 6y ago
        [deleted]
  - matkoniecz 6y ago
    > beats other stores of value in almost every metric. Which metrics you selected so crypto beats following in "almost every metric"? - real estate - gold - $ in cash - $ in a bank account - stocks
    - trixie_ 6y ago
      Metrics as in how easy is it to store and send, how resistant is it to inflation and manipulation. - Land - Can't send it. - Gold - Physical so more difficult to store, secure, send, and verify. - Cash - Easy to manipulate by the government. How many trillions printed for coronavirus? I wouldn't hold too much of it. - Stocks - Cant send it. More shares can be created by the board of directors. Crypto is made to do one thing - store value, and do it well.
      - sumedh 6y ago
        > Crypto is made to do one thing - store value, and do it well. Does it really do it well when your "investment" can fluctuate between $5000 to $40K?
      - quickthrower2 6y ago
        Well bitcoin in particular but some crypto is inflationary also
      - umanwizard 6y ago
        Well, technically you can own a gold ETF rather than physical, and whenever you want to send value to someone, sell it and wire them the money (free on Fidelity and takes on the order of as long as a few Bitcoin confirmations). This is not too different in effect from being able to “send gold”. Anyway... despite the theoretical limitations of cash, hard currencies in practice have proven much, much more stable than Bitcoin. There hasn’t been hyperinflation in any of the major hard currencies (USD, CNY, GBP, EUR/D-Mark, CHF) since the invention of the fiat system. You can argue that cash can be manipulated and is therefore a worse store of value than Bitcoin but it simply isn’t backed up by concrete evidence in reality
  - woodruffw 6y ago
    > Crypto has value simply because it is better at storing value than the mediums that came before it. Is this a serious claim? The last one and a half months have seen extraordinary speculation in cryptocurrency markets, even by the standards of cryptocurrencies. Lots of wealth is being produced; relatively little is being stored.
    - trixie_ 6y ago
      It's in the news everyday. Huge investment firms diversifying into crypto. So yes, value is being stored. The market cap of cypto has been rising exponentially - exactly because it is a good store of value. Which means easy to store, and highly resistant to manipulation and inflation.
      - woodruffw 6y ago
        > Huge investment firms diversifying into crypto. So yes, value is being stored. Something being a desirable investment vehicle usually makes it an undesirable store of value: a store of value should be stable and predictable, not subject to significant changes in any direction. > Which means easy to store, and highly resistant to manipulation and inflation. These are, again, negative qualities in a store of value. A good store of value is inflates and deflates exactly as much as required to retain its backing value. Inflation means loss of value; deflation represents a liquidity risk when exiting the asset. More generally, this is an indictment of the cryptocurrency community's basic financial literacy. You can't just call a speculative instrument a "store of value" because every who bought into it in the past two months has seen a positive return; that's just not what it is.
        jerrymiller 6y ago
        Case in point still. The contradictions you make are astounding. What's more astounding is that you are not even noticing them. > Huge investment firms diversifying into crypto > this is an indictment of the cryptocurrency community's basic financial literacy I suggest that maybe it's you who lacks basic financial (and econ) literacy, not investment firms or the "cryptocurrency community" > You can't just call a speculative instrument a "store of value" because every who bought into it in the past two months has seen a positive return No, everyone who bought BTC at _any point in the past_ and didn't sell are seeing positive returns. This is the definition of a good store of value. You are conflating SoV properties with volatility. They are orthogonal. SoV is a long-term play.
  - umanwizard 6y ago
    Low volatility is a pretty important metric for stores of value. By that metric almost anything other than GME shares is better than cryptocurrency: cash in any hard currency, gold, silver, luxury watches, ...
    - trixie_ 6y ago
      I guess remind me in 10 years and we'll see how returns on crypto compares to 'stocks, hard currency, gold, silver, luxury watches' Funny how all of those things are not supply constrained, so they seem to be at a disadvantage from the start. But we'll see.
      - umanwizard 6y ago
        I didn’t mention “possibility of high returns” as a metric. I said “low volatility”.
      - optimalsolver 6y ago
        >I guess remind me in 10 years and we'll see how returns on crypto compares to 'stocks, hard currency, gold, silver, luxury watches' You're literally supporting the argument of the person you're replying to without even realizing it. Disproportionately high returns indicates a highly volatile asset, and it's just as likely to go the other way, resulting in staggering losses. These are not markers of a good, long-term storage asset class.
      - alphabettsy 6y ago
        I think you misunderstand a store of value. Extremely volatility is not a positive characteristic. Would you want to be paid in a currency that regularly changes value 5-10% day to day?
    - AgentME 6y ago
      There are decentralized cryptocurrencies that have achieved low volatility, such as DAI. I don't think it's ever gotten more than a couple percent from its $1 target price since being created. (I assume it almost never gets talked about because there's no profit from investing in it and hyping it to others.)
  - underwater 6y ago
    TypeScript was about bringing traditional, proven, approaches to a trendy but immature language. That's exactly the opposite of Bitcoin.
- elif 6y ago
  Something that can continue to gain value for 10 years has no practical use? Someone had better remove the vast majority of the world GDP which is in financial markets.
  - kortilla 6y ago
    Financial markets represent ownership of companies that produce things or provide services. Or they are for debt on loans to governments, companies, or people that use it to finance something.
    - elif 6y ago
      Maybe before 1980 that is a sufficient explanation of abstract capital. It really does not resemble modern reality.
flatiron 6y ago
Nothing wrong with hearing voices not within your echo chamber. I always take voices here I don’t agree with with more weight because they might be right.
wmf 6y ago
Possibility of the early Web: getting free overnight air shipping on 50-pund bags of dog food. Possibility of cryptocurrency: becoming "fuck you" rich in a year without doing any work. Yeah, you have a point; crypto does have amazing potential.
- quickthrower2 6y ago
  Ooh I though you were setting up: Possibility of crypto: getting free overnight air shipping on 50-pund bags of weed
- KirillPanov 6y ago
  > becoming "fuck you" rich in a year without doing any work. That's how most SF tech startups appear to the average blue-collar person. It's all about perspective.
xtracto 6y ago
It may be a matter of demographics. Slashdot had the same effect with other new technology (ipod. Less space than a nomad). And Usenet or irc forums were full of people discounting myspace, FB, and other newer technologies. Hacker news has changed a lot since the time I joined. I came from /. And osnews . And initially it was strongly pro business . Now it has became more "liberal " and pro open source.
- blhack 6y ago
  Curious if you've found a place that feels the way that HN did back then.
  - 1996 6y ago
    If you do, let me know!! Somedays it really looks like I'm gonna see here AARP ads any time soon! The community is aging and getting out of touch with the market without even realizing it
  - xtracto 6y ago
    Not really but mainly because I haven't looked. I personally lean more towards left/socialist views. So the current HN groupthink is more aligned with my views. Maybe I am part of the problem: a group of people that joined HN and affected the discourse.
quickthrower2 6y ago
Yeah it’s a collective “just use Rsync” blindness. I think Defi is pretty exciting and once it’s mainstream with more regulated options with KYC and tokens backed by fully audited companies it has some amazing potential. Also see https://news.ycombinator.com/item?id=26041057 https://news.ycombinator.com/item?id=26041057 - HN wants it’s mp3s, so why doesn’t it want it’s money?
- xtracto 6y ago
  Exactly! I find it so surprising how on one side stories like the one you linked are heavily upvoted, and many here complain about Google, Facebook, monopolies, etc. But when it comes to z technology that is disruptive enough to solve many of the underlying problems , people are fast to discount it because a certain implementation is slow, inefficient, misused, etc. The discourse that I would LOVE to see here is HOW to make it better. Is BCH really better? Is XlM? even XRP. Like when databases are discussed, we get interesting points for Postgres or MySQL or even Mongo. That's the constructive view.
Noos 6y ago
I do, and i see what the web has become now, and it makes me less likely to be giddy about the next new thing. I think we're at a point where the net is no longer novel enough to be magical, and we see the reality is a lot more mundane and even harmful than anyone predicted. You can't just throw out grand concepts and wish for magic now; there needs to be a lot more reflection on the technologies people introduce. Are they sustainable, in that they can maintain their original purpose? Do they increase the attack surface of people, groups and societies greater than the benefit? Do they require skill and vigilance beyond the average person to use safely? I don't think optimism and "it will all work out" is a rational position any more.
vangelis 6y ago
How are your shitcoins?
- staplers 6y ago
  God they're doing so well especially today after Tesla announced buying $1.5 billion worth. Thanks for asking.

zhoujianfu 6y ago

FYI, this “Bitcoin Insider” (there should be no such thing in a decentralized currency?) apparently took $5M from mtgox, claiming he could get them through regulation in the U.S. (he did no such thing)... then sued them for $16B after they went bankrupt, holding the thousands of creditors hostage for years... so far. And apparently now fortress will give him (CoinLab) $11M to move (slightly) out of the way.

wmf 6y ago
Yeah, Vessenes is so far inside that he has a massive conflict of interest in this case. He's also acted in pretty bad faith. Here's the story from a knowledgeable outsider: https://blog.wizsec.jp/2019/04/coinlab-v-mtgox-imaginarium-of-peter.html https://blog.wizsec.jp/2019/04/coinlab-v-mtgox-imaginarium-o... Even putting aside the Mt. Gox bankruptcy, the original contract with CoinLab looks pretty bad: https://www.courtlistener.com/recap/gov.uscourts.wawd.192566.1.1.pdf https://www.courtlistener.com/recap/gov.uscourts.wawd.192566... They agreed on damages of $50M if either side breached the contract but neither party ever had nearly that much money and the deal was only worth less than $1M per year. IANAL but this seems like a dumb suicide pact.
- slavik81 6y ago
  > IANAL but this seems like a dumb suicide pact. IANAL either, but those sound like punitive damages, which are unenforceable. The court could accept the assessment in the contract, but if it's blatantly unreasonable, they are supposed to pick a value that more accurately matches the damage incurred due to the breach. Not that I would want to be in a situation where you have to depend on that...
  - staticautomatic 6y ago
    They’re called liquidated damages and they’re typically only enforceable when they are reasonably close to the actual monetary harm that would be caused by a breach of a contract.
deleted 6y ago
[deleted]

vmception 6y ago

This article starts off with an ambiguous premise. The SEC Enforcement Division asking about Mt Gox in early 2013 has nothing to do with Mt Gox being in securities trouble. It more likely means the SEC was following funds in a bitcoin transaction that were deposited or transferred to that exchange. Or fiat transferred by an investor following a securities promoter’s instruction on how to invest via bitcoin. The article then switches to other issues about Mt Gox that also never involve the SEC or securities issues again. There is a pervasive meme amongst cryptocurrency enthusiasts of the SEC being an all encompassing police. It is weird and counterproductive.

otoburb 6y ago

>>“It could’ve been a trillion-dollar company,” Vessenes said. “It’s so sad.” The current $16 billion CoinLab claim against Mt. Gox is based on what the company thinks their portion of Mt. Gox would be worth if it had been managed well, he said. Quoting this part of the article to emphasize the absurdity of CoinLab's assertion. >>Peter Vessenes has spent years trying to recoup lost coins This article byline is strange because the CoinLab claim is entirely for cash/fiat damages, and not for the remaining cryptocurrency that the estate holds. Creditors know this because CoinLab's claim is evidently still incurring delay and interest, which the Tokyo District Court only affords to monetary Mt. Gox claims.

wmf 6y ago
If the US part of Mt. Gox was managed well it would today be... Coinbase? Which is soon to be worth $63B.
- otoburb 6y ago
  Coinbase didn't need Mt. Gox to become what they are today. I'm not sure this line of reasoning holds much water. Perhaps if we were to follow Vessennes' absurd chain of reasoning to its logical conclusion, CoinLab itself should be countersued by Mt. Gox creditors for failing to become as successful as Coinbase given their head start in the US.
  - snoshy 6y ago
    Coinbase did need something like Mt. Gox to become what they are today, but not in the sense you imply. The whole Mt. Gox episode opened people's eyes up to the fact that large institutional frauds could take place with their Bitcoin wealth, and that there indeed was a need for a well managed reputable provider for these services. Bad actors can come in many sizes, and a bad actor of Mt. Gox scale also brought about plenty of controversy and media attention that was heaped on this subject. It benefited Coinbase in no small part to capitalize on this already acknowledged need for a business.
  - wmf 6y ago

cecida 6y ago

The problem with trying to suggest that Bitcoin is a fundamentally flawed idea is that you will be down voted to oblivion. As a computer science concept it's rather mundane. We know what merkle trees are. It's an extremely wasteful form of computing. Mining is an exercise in wastefulness. Proof-of-work is one of the worst concepts I've ever seen. Ah, Tether.

kneel 6y ago
I've never seen self propagating transaction networks that pay for themselves and recruit their own evangelists before bitcoin. Seems pretty amazing.
- LegitShady 6y ago
  It's called religion. They just separated the transacting (tithing, etc) from the self propagating evangelism. The tithing was the important part, though.
  - kneel 6y ago
    That's a pretty unique take! I like it
vmception 6y ago
that has nothing to do with this article, I’m sure there will be plenty of other bitcoin articles less tangentially related to your copypasta where you’ll be more in context pasting that
lukifer 6y ago
> Mining is an exercise in wastefulness While I don't disagree (I think PoW should be carbon-taxed or fully outlawed), a massive portion of the non-crypto economy is intentional waste for social signaling purposes: https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good
nyolfen 6y ago
> As a computer science concept it's rather mundane. We know what merkle trees are. a practical, robust solution to a long-standing computer science problem (byzantine generals) that directly results in an entire new branch of computer science and economic sector is hardly mundane. bitcoin solves previously intractable trustless coordination problems. we are only at the early stages of discovering what it makes possible; you are the newspaper editor laughing at the web in 1996.

chaostheory 6y ago

Since we're on the subject, how do people think the Tether situation will play out?

askmike 6y ago
That's a very different subject, I don't see any overlap
- chaostheory 6y ago
  Mt Gox was responsible for the first bitcoin bubble. Tether has been responsible for multiple bitcoin bubbles now, using their crypto that was supposedly backed by the USD 1 to 1. The rationale for pumping bitcoin is the same: to recoup stolen money. Look at the money inflow graph. Tether surpasses everything else https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin
  - askmike 6y ago
    There have been many bubbles before Mt Gox and there have been many after. > Tether has been responsible for multiple bitcoin bubbles now No one in the space actually believes this.
    - chaostheory 6y ago
      > There have been many bubbles before Mt Gox and there have been many after. Before Mt Gox there were no giant bubbles. Post Mt Gox, all of the giant bubbles were most likely caused by Tether. > No one in the space actually believes this. That is not true.
- optimalsolver 6y ago
  In terms of losses, Tether will be to Mt. Gox what Little Boy was to a firecracker.
  - chaostheory 6y ago

Groxx 6y ago

There's also this entertaining presentation from an outside researcher (tracing down the missing money) from 3 years ago (I don't know what's up with the framerate, but really, it's worth watching): https://www.youtube.com/watch?v=l70iRcSxqzo https://www.youtube.com/watch?v=l70iRcSxqzo It's quite a rollercoaster of failures.

otoburb 6y ago
The outside researcher, Kim Nilsson, wrote a recent summary[1] in response to articles attempting to whitewash CoinLab's involvement in the case. [1] https://blog.wizsec.jp/2021/01/earlier-mtgox-payouts-coinlab.html https://blog.wizsec.jp/2021/01/earlier-mtgox-payouts-coinlab...

MagicalTux 6y ago

Being directly involved in this I'm not going to comment as of the veracity of the article myself, but rather point to a response of when this was posted on twitter (look at the extra responses for some fact checking): https://twitter.com/wizsecurity/status/1355973512012292096 https://twitter.com/wizsecurity/status/1355973512012292096

koolba 6y ago
The default twitter algo selection of comments is random gibberish. Anything more specific to point to?
- marcolussetti 6y ago
  I think he's pointing to the comments by @wizsecurity specifically, in response to the @bloomberg one.
- Qub3d 6y ago
  Here's the thread unrolled: https://threader.app/conversation/1355926433646972933/UcAWDzZDZk https://threader.app/conversation/1355926433646972933/UcAWDz...
- MagicalTux 6y ago
  The WizSecurity comments are shown as a thread, those are the most relevant imo
modeless 6y ago
For those who don't know, MagicalTux is Mark Karpeles, owner and CEO of Mt Gox. Assuming this is his real account. And for what it's worth, I agree that this is a bad article based on what I know about the situation. Bloomberg reporting in general is questionable these days if you ask me. I don't trust them since the false Supermicro hack story (never retracted BTW) and I've seen several other bad stories from them since then.
- rasengan 6y ago

llamataboot 6y ago

Still waiting for the 50 or so BTC I had in MtGox when it disappeared. Think I should get what they were worth then, or what they are worth now :D

wmf 6y ago
Would you prefer 100% of what it was worth then or 23% of what it's worth now?
- Lambdanaut 6y ago
  Why 23%? Seems arbitrary. Is that the amount in BTC that is expected to be paid out to creditors?
  - wmf 6y ago
    Yes.
    - perennate 6y ago
      That is not at all my understanding of what the draft rehabilitation plan says. There are fiat assets and fiat claims and other complicated factors. The payout would depend on the BTC/BCH-to-yen conversion rate at the time that the distribution begins, and the total claims that make it through all the way to the end. Based on one creditor's read of the plan, along with the current exchange rates and such, the current expected payout is closer to 0.16 BTC per 1 BTC held, some of which is paid back in Japanese yen and some as BTC/BCH [https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_gox_draft_rehabilitation_plan_payout_calculator/ https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_...].
  - perennate 6y ago
    It is much more complicated than that because part of the BTC will be paid from yen fund and part from BTC fund. And there are both fiat claims and cryptocurrency claims. The draft document has been made available to creditors but it says not to share with the public. But it does say that BTC and BCH claims will be valued at the BTC/BCH-to-yen conversion rate as of the time of commencement of rehabilitation proceedings (749,318.83 yen/BTC). And the payout will be less than that because the remaining assets will be distributed to creditors in a prorated system (although certain small fiat claims and possibly other claims may have higher priority). There is definitely not a specific amount of BTC currently that would be paid to creditors per BTC that they held, since it depends on the final total claims (which is mostly finalized but may still change a bit), and presumably on the value of the remaining BTC/BCH assets held by the trustee at the time of distribution. One creditor made a calculator to compute the payout based on the current exchange rates and such: https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_gox_draft_rehabilitation_plan_payout_calculator/ https://old.reddit.com/r/mtgoxinsolvency/comments/l08ymh/mt_...

ece 6y ago

The Darknet Diaries episode on Mt. Gox was pretty good: https://darknetdiaries.com/episode/9/ https://darknetdiaries.com/episode/9/

perennate 6y ago

CoinLab's lawsuit is a big part of the reason why creditors with actual legitimate claims still haven't received their share of the remaining assets. Somehow CoinLab thinks their claim, which hinges on vague and unrealistic what-ifs, should have priority over Mt. Gox users who held dollar/cryptocurrency assets in their Mt. Gox accounts. Obviously CoinLab's ridiculous claims will eventually be thrown out, but it has severely delayed the insolvency proceedings and eventual distribution process. Vessenes is not a "Bitcoin insider", he is a snake who seeks to steal billions from individual users who lost assets that they had held with Mt. Gox. Here is what former Mt. Gox users who are still waiting for the distribution process think of this Bloomberg article: https://old.reddit.com/r/mtgoxinsolvency/comments/l9m3iz/coinlab_bloombergs_matt_leising_tries_to_spin_the/ https://old.reddit.com/r/mtgoxinsolvency/comments/l9m3iz/coi...

nangz2 6y ago

I am a MtGox creditor and intermittently get offers from Fortress Capital to buy my BTC for some % of its value. I tell them where to stick it. It now looks like Vessenes is in cahoots with Fortress Capital in an arrangement where they drag out the frivolous coinlab lawsuit which encourages desperate creditors to sell out to Fortress. Vessenes is really an awful piece of subhuman filth. He has zero claim to anything, but is causing misery to thousands of creditors. I hope all his descendents continue to be aware of this.