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How would MtGox effectively "create BTC"? There is a difference between moving coins around in a database and creating new coins. All coins are deposited from u

by alttab 15y ago

How would MtGox effectively "create BTC"? There is a difference between moving coins around in a database and creating new coins. All coins are deposited from users. The only way BTC would be "created" in MtGox is if MtGox was mining on their own. Coins need to be "mined" to be created - so MtGox couldn't even loan coins they didn't have.

burgerbrain 15y ago
MtGox could effectively "create" BTC by simply selling more than they actually had. This would of course only work as long as people were actually withdrawing less than MtGox had available to them. Until you attempt to withdraw the BTC from the exchange, you wouldn't necessarily actually know that they in fact exist.
- swishercutter 15y ago
  The flaw here is there is typically more BTC sellers than buyers due to mining/dark pool. That combined with BlockExplorer tracking makes it pretty much impossible. Unless you are seeing something I am not. I guess your theory will be tested when a large majority pulls their money from Mt.Gox...that is if that happens...we will all know in the next few days.
  - burgerbrain 15y ago
    BlockExplorer won't help you in this hypothetical case because as I understand it MtGox doesn't even pretend to preform actual BTC transactions until you withdraw. Before you withdraw your "BTC" are only numbers in MtGox's internal system. They could be selling you additional of these numbers without having the actual BTC behind them available. Anyway, I'm not saying they have sold more than they actually have, just that it is a technical possibility.
tedunangst 15y ago
MtGox is a bank. When you put money in a real bank, it doesn't go into a box labeled "alttab's money", it goes in a box labeled "everybody's money" and there's a piece of paper called "alttab's account" with a number on it. When the bank robbers come, they take the box with money in it, but they don't take the piece of paper. Then when you try to withdraw your money, the bank manager opens the box of money and says "oops."

by alttab 15y ago

burgerbrain 15y ago

MtGox could effectively "create" BTC by simply selling more than they actually had. This would of course only work as long as people were actually withdrawing less than MtGox had available to them. Until you attempt to withdraw the BTC from the exchange, you wouldn't necessarily actually know that they in fact exist.

swishercutter 15y ago
The flaw here is there is typically more BTC sellers than buyers due to mining/dark pool. That combined with BlockExplorer tracking makes it pretty much impossible. Unless you are seeing something I am not. I guess your theory will be tested when a large majority pulls their money from Mt.Gox...that is if that happens...we will all know in the next few days.
- burgerbrain 15y ago
  BlockExplorer won't help you in this hypothetical case because as I understand it MtGox doesn't even pretend to preform actual BTC transactions until you withdraw. Before you withdraw your "BTC" are only numbers in MtGox's internal system. They could be selling you additional of these numbers without having the actual BTC behind them available. Anyway, I'm not saying they have sold more than they actually have, just that it is a technical possibility.

tedunangst 15y ago

MtGox is a bank. When you put money in a real bank, it doesn't go into a box labeled "alttab's money", it goes in a box labeled "everybody's money" and there's a piece of paper called "alttab's account" with a number on it. When the bank robbers come, they take the box with money in it, but they don't take the piece of paper. Then when you try to withdraw your money, the bank manager opens the box of money and says "oops."