29 ms·

I have heard multiple explanations for the delays, and I think there are multiple issues at play. Firstly it has been claimed that they have freshly mined coin

by Lerc 13y ago

I have heard multiple explanations for the delays, and I think there are multiple issues at play. Firstly it has been claimed that they have freshly mined coins stored undistinguished from others. If someone withdraws an amount that draws from an address with new coins, that withdrawal will be delayed. I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours. There are transactions not going though for longer periods, The transaction hash is being provided. I have seen claims suggesting that transactions are failing because of a subtle protocol incompatibility, which would explain the fairly random nature of the failed transactions. Lots of people are saying MtGox is out of funds and the sky is falling. The biggest problem with those claims is that people have been predicting the imminent demise of MtGox for quite some time. MtGox may be failing, but everything that happens cannot be a sign of imminent collapse if it keeps on going. I'm not sure if the claims of MtGox running a fractional reserve on the sly are very valid. I think it's more likely that they have technical issues, but the very nature of Bitcoin means that they could potentially lose all their bitcoin through technical issues alone. If you lose a private key or transfer bitcoin to an address with a lost key, those coins are effectively gone. If your software isn't behaving it's quite possible to make an automated money shredder. It's fairly obvious that at this point they need to do some fairly significant steps to demonstrate that they are in control of enough bitcoin. If they want to restore confidence in their ability to pay out, they should use Bitcoin's ability to demonstrate ownership to do just that. Restoring confidence in their ability to operate is going to be a longer road.

nkuttler 13y ago
Freshly mined coins don't make any sense to me. If MtGox needs frehsly mined coins to keep their exchange alive, they are probably dead. When and at which price did they spend their client's bitcoins so that now they have to rely on mining new ones?
- deleted 13y ago
  [deleted]
- Anderkent 13y ago
  A client sets his mining address directly to their MtGox deposit address. Different client tries to withdraw the funds. MtGox grabs a couple output it owns without regard to its age and tries to send it to the withdrawing client. The transaction is delayed because some of these outputs are fresh.
  - nkuttler 13y ago
    I see, thanks. I don't really see how that could lead to so many dealyed transactions though.
    - Anderkent 13y ago
      A freshly mined coin is not valid for 120 generations. That's to avoid transactions being voided if the very end of the blockchain switches (if the chain is A->B->C, and you spend coins mined in B in C, but then the chain is overtaken by A->D->E->F, your transaction is invalid (coins genrated in B won't appear in the new chain))
      - nkuttler 13y ago
        Yes, I know.
  - im3w1l 13y ago
    But "everyone" is poolmining. And the pools are surely professional enough not to mine directly into mtgox?
    - Anderkent 13y ago
      Not sure if serious. First of all, 'professional'? In bitcoin? Anyway, how does the pool know the address you gave it is a mtgox deposit address rather than a personal address of yours?
brokenmusic 13y ago
I think since they refuse to show evidence they have enough funds, it should be assumed it's a scam until proven otherwise. Really, they're making tons of money off fees, they are the most expensive exchange. Screwing customers like that is below acceptable. They're not just some paid app that can go down and customer won't be affected too much. It's money. Lot's of them. You can't refuse to pay and keep silence, otherwise you're a scammer.
- Lerc 13y ago
  It's a good rule of thumb to assume incompetence instead of malice. In the instance of MtGox it just doesn't make sense for it to be a scam. They ran a business for a few years in obscurity then when they become a central figure in potentially a massive change in financial infrastructure they decide to run off with the silver? MtGox had the potential to be worth many billions if they were a significant service provider in a successful BitCoin scenario. They possibly still do to some extent if they can get their act together.
  - moocowduckquack 13y ago
    It's a good rule of thumb to assume incompetence instead of malice. I would generally agree, but the calculus changes slightly for banking.
    - eru 13y ago
      Oh, bankers do both.
  - brokenmusic 13y ago
    I personally would never give them my business ever. Many people won't either. I'm sorry, they already screwed me once last year holding withdrawal for 2 days, now again. They are going down in history. The only question, again, if they will return the coins. I doubt they will. Even if we assume incompetence, it doesn't mean they suddenly can't SPEAK, right? Go and tell your customers what's going on. When people are not open about things, it most likely means they want to screw you and you are safe to assume this to be the default version.
nwh 13y ago
> I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours. Both p2pool and eligius.st allow coinbase payouts to any address, and for arbitrary amounts. It's entirely possible for a person to set their mining address to their deposit one, and suddenly Mt Gox has unspendable coinbase transactions in their wallet pool. People frequently assume as you did that no spends would occur of coinbase transactions, and suddenly end up with broken systems because of it. Here's one from p2pool, paying to 402 outputs (truncated for brevity). "in":[ { "prev_out":{ "hash":"0000000000000000000000000000000000000000000000000000000000000000", "n":4294967295 }, "coinbase":"03435404062f503253482f" } ], "out":[ { "value":"0.00174533", "scriptPubKey":"OP_DUP OP_HASH160 7abdace1a0588adf6bc6673ea11ba2312285f1db OP_EQUALVERIFY OP_CHECKSIG" }, [......] ] http://blockexplorer.com/tx/81e5874360f5c511ae9ad305b979785384484f8aaa5fdf81587355f54a33f563#o1 http://blockexplorer.com/tx/81e5874360f5c511ae9ad305b9797853...
- Anderkent 13y ago
  Why are they unspendable? Do you mean it'd cost more in fees than the value of the output? edit: oh, you mean they're unspendable for the 100 generations it takes to confirm a coinbase.
  - nwh 13y ago
    Indeed. 120 confirmations are needed to avoid large chains of transaction dependancies being voided during a reorganisation.
kalleboo 13y ago
I had faith in MtGox before - their problems sounded like typical technical and banking system issues. After all, they use to have massive trading engine lag issues that they eventually resolved for the most part. But it feels like they've been having withdrawl issues for like a year now, and since they haven't made any public statements about what's actually happening and what steps they are taking to rectify it, I've completely lost faith.
- querulous 13y ago
  they didn't resolve their trading lag. their volume dropped to the point where it's not as frequently a problem
dobbsbob 13y ago
They laid off most of their staff, are being sued for $75million and have millions seized by the feds for running an unlicensed exchange, and coinlab still has $5million from the failed partnership. Scam is incoming, Gox should've sold itself to somebody competent over 2yrs ago

by Lerc 13y ago

nkuttler 13y ago

Freshly mined coins don't make any sense to me. If MtGox needs frehsly mined coins to keep their exchange alive, they are probably dead. When and at which price did they spend their client's bitcoins so that now they have to rely on mining new ones?

deleted 13y ago
[deleted]
Anderkent 13y ago
A client sets his mining address directly to their MtGox deposit address. Different client tries to withdraw the funds. MtGox grabs a couple output it owns without regard to its age and tries to send it to the withdrawing client. The transaction is delayed because some of these outputs are fresh.
- nkuttler 13y ago
  I see, thanks. I don't really see how that could lead to so many dealyed transactions though.
  - Anderkent 13y ago
    A freshly mined coin is not valid for 120 generations. That's to avoid transactions being voided if the very end of the blockchain switches (if the chain is A->B->C, and you spend coins mined in B in C, but then the chain is overtaken by A->D->E->F, your transaction is invalid (coins genrated in B won't appear in the new chain))
    - nkuttler 13y ago
      Yes, I know.
- im3w1l 13y ago
  But "everyone" is poolmining. And the pools are surely professional enough not to mine directly into mtgox?
  - Anderkent 13y ago
    Not sure if serious. First of all, 'professional'? In bitcoin? Anyway, how does the pool know the address you gave it is a mtgox deposit address rather than a personal address of yours?

brokenmusic 13y ago

I think since they refuse to show evidence they have enough funds, it should be assumed it's a scam until proven otherwise. Really, they're making tons of money off fees, they are the most expensive exchange. Screwing customers like that is below acceptable. They're not just some paid app that can go down and customer won't be affected too much. It's money. Lot's of them. You can't refuse to pay and keep silence, otherwise you're a scammer.

Lerc 13y ago
It's a good rule of thumb to assume incompetence instead of malice. In the instance of MtGox it just doesn't make sense for it to be a scam. They ran a business for a few years in obscurity then when they become a central figure in potentially a massive change in financial infrastructure they decide to run off with the silver? MtGox had the potential to be worth many billions if they were a significant service provider in a successful BitCoin scenario. They possibly still do to some extent if they can get their act together.
- moocowduckquack 13y ago
  It's a good rule of thumb to assume incompetence instead of malice. I would generally agree, but the calculus changes slightly for banking.
  - eru 13y ago
    Oh, bankers do both.
- brokenmusic 13y ago
  I personally would never give them my business ever. Many people won't either. I'm sorry, they already screwed me once last year holding withdrawal for 2 days, now again. They are going down in history. The only question, again, if they will return the coins. I doubt they will. Even if we assume incompetence, it doesn't mean they suddenly can't SPEAK, right? Go and tell your customers what's going on. When people are not open about things, it most likely means they want to screw you and you are safe to assume this to be the default version.

nwh 13y ago

> I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours. Both p2pool and eligius.st allow coinbase payouts to any address, and for arbitrary amounts. It's entirely possible for a person to set their mining address to their deposit one, and suddenly Mt Gox has unspendable coinbase transactions in their wallet pool. People frequently assume as you did that no spends would occur of coinbase transactions, and suddenly end up with broken systems because of it. Here's one from p2pool, paying to 402 outputs (truncated for brevity). "in":[ { "prev_out":{ "hash":"0000000000000000000000000000000000000000000000000000000000000000", "n":4294967295 }, "coinbase":"03435404062f503253482f" } ], "out":[ { "value":"0.00174533", "scriptPubKey":"OP_DUP OP_HASH160 7abdace1a0588adf6bc6673ea11ba2312285f1db OP_EQUALVERIFY OP_CHECKSIG" }, [......] ] http://blockexplorer.com/tx/81e5874360f5c511ae9ad305b979785384484f8aaa5fdf81587355f54a33f563#o1 http://blockexplorer.com/tx/81e5874360f5c511ae9ad305b9797853...

Anderkent 13y ago
Why are they unspendable? Do you mean it'd cost more in fees than the value of the output? edit: oh, you mean they're unspendable for the 100 generations it takes to confirm a coinbase.
- nwh 13y ago
  Indeed. 120 confirmations are needed to avoid large chains of transaction dependancies being voided during a reorganisation.

kalleboo 13y ago

I had faith in MtGox before - their problems sounded like typical technical and banking system issues. After all, they use to have massive trading engine lag issues that they eventually resolved for the most part. But it feels like they've been having withdrawl issues for like a year now, and since they haven't made any public statements about what's actually happening and what steps they are taking to rectify it, I've completely lost faith.

querulous 13y ago
they didn't resolve their trading lag. their volume dropped to the point where it's not as frequently a problem

dobbsbob 13y ago

They laid off most of their staff, are being sued for $75million and have millions seized by the feds for running an unlicensed exchange, and coinlab still has $5million from the failed partnership. Scam is incoming, Gox should've sold itself to somebody competent over 2yrs ago