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This is FUD. As incredible as it seems, MtGox's problems are, in fact, technical. And it was quite a relief to realize this. Also, there is minimal danger of

This is FUD. As incredible as it seems, MtGox's problems are, in fact, technical. And it was quite a relief to realize this. Also, there is minimal danger of a bank run. MtGox makes a profit off of every transaction. Therefore they control more BTC than users are able to deposit. Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. For anyone who wants the truth, rather than speculation, here it is: http://www.reddit.com/r/Bitcoin/comments/1x93tf/some_irc_chatter_about_what_is_going_on_at_mtgox/cf99yac http://www.reddit.com/r/Bitcoin/comments/1x93tf/some_irc_cha...

jonknee 13y ago
> Also, there is very minimal danger of a bank run. MtGox makes a profit off of every transaction. Therefore they control more BTC than users are able to deposit. Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. What if the technical problems lead to a situation where they are short BTC? Your link mentions they could have double paid people which would lead to that situation. Then there's the issue of seizure which apparently has happened at least once. Relying on your unlicensed money changer to be fair because "he is motivated to not go to jail" is precarious. Madoff's client's probably said the same thing... That's the beauty of the FDIC and the terrifying part about BTC exchanges.
- sillysaurus2 13y ago
  The only reason I have confidence is because two years ago Magical Tux began transferring around 440k bitcoins in order to prove ownership of those coins: http://www.reddit.com/r/Bitcoin/comments/n4a2o/someone_has_been_transferring_around_440k/ http://www.reddit.com/r/Bitcoin/comments/n4a2o/someone_has_b... If he had 440k coins then, imagine how many he has now. Yes, he could have lost a lot, but on the other hand we'd probably have heard if someone pulled off that kind of heist. Here's how I expect things will happen: Gox will refund all "stuck" withdrawls. (Mine have already been refunded.) Then they will fix the technical problem, hopefully by Monday, but certainly within a couple weeks. Then they'll re-enable bitcoin withdraws. At that point, everybody will yank their bitcoin out of Gox. But then people will realize that there is value in trading on Gox as a platform, and Gox will be used for what it's meant to be used for: Trading, not storage. EDIT: To clarify, I don't believe it's possible they had a technical problem that led to them losing more bitcoins than the profits they've made from trading fees. (This is me being hopeful that people can't be that incompetent.)
  - XorNot 13y ago
    It's not a technical problem. The problem is Mt. Gox is almost certainly doing arbitrage with the cash on hand, and the BTC on hand. The delays with withdrawals were almost certainly because they needed to liquefy some instruments to pay out. Of course seeing their origins and backing, they've screwed up - and BTC being volatile it has probably moved against them - so low and behold "technical problem" while they try to figure out how to get solvent again. Punchline: real cash gets refunded, the BTC will not be, anyone holding BTC is going to lose big as the price tanks.
    - jrockway 13y ago
      The delays with withdrawals were almost certainly because they needed to liquefy some instruments to pay out. I would guess this is a fraud-stopping measure. Time is a fraudster's enemy; you may have guessed someone's password, but if they read the email that says someone changed their email address, they can react before the money disappears into the ether. Furthermore, Mt. Gox can probably predict in advance how much cash they'll need to fulfill withdrawals, and liquidate the instruments in advance to make withdrawals instant, if they so chose. Everyone loves a good conspiracy theory, but the reality of running a money transfer business makes Mt. Gox look pretty normal.
      - username223 13y ago
        > Time is a fraudster's enemy; If I agree to hold your money, then "need more time" to give it back to you, how exactly is time being my enemy?
  - deleted 13y ago
    [deleted]
  - anigbrowl 13y ago
    But then people will realize that there is value in trading on Gox as a platform What value is this, exactly? You seem to be assuming that having fixed this problem the platform will never break down again, ever.
  - 13y ago
gamblor956 13y ago
Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. For those of you who are wondering, this is because MtGox is Japan-based. In Japan, virtual/digital goods are considered property that can be "stolen." There have been a few cases on this in Japan, though it's never been tested outside of the gaming context and AFAIK nobody's actually gone to jail for stealing a virtual good (yet).
smtddr 13y ago
I don't know what will happen to MtGox, but you sound just like the SheepMarketPlace defenders when they kept coming up with all kinds of ways to downplay all the events leading up to SMP's disappearing act. I don't know how you're so sure they won't fall into oblivion. They've been a big mess for months. Anyone else reading this who's new to crypto-coins, at the _minimum_ I do not recommend you send any of your coins/fiat to MtGox at this time.
- coldtea 13y ago
  When there's some "gold rush" mentality involved, logic goes out of the window.
- username223 13y ago
  For anyone new to crypto-coins, "fiat" is a derogatory term for "cash money," not a small European car.
foobarqux 13y ago
The correct way to assuage uncertainty about insolvency is to submit to a financial audit from a reputable auditor.
foobarqux 13y ago
How did MtGox get freshly-minted coins if they can't be transferred?
- nwh 13y ago
  Eligius / p2pool payouts directly to Gox's wallet.
EpicEng 13y ago
"Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC." Weird, I wonder what all of those bank robbers are motivated by... money, sure, but I'm pretty sure they aren't itching to go to jail either.
coldtea 13y ago
>Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. Except if, like every fraudster ever, he believes that he has a good plan to run off AND avoid going to jail. I mean, what kind of bizarro logic is this? Are we supposed to listen to further "rational" arguments now? Also, seriously, people place their money (in whatever form) in someone who calls himself "Magical Tux"? A guy whose profile in Twitter reads "PHP Developer working on some weird stuff, like a mail server (POP3/IMAP4/SMTP) written in PHP"? Sure, that inspires confidence in a money exchange. Might as well invest your money directly to that Nigerian prince too.

jonknee 13y ago

> Also, there is very minimal danger of a bank run. MtGox makes a profit off of every transaction. Therefore they control more BTC than users are able to deposit. Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. What if the technical problems lead to a situation where they are short BTC? Your link mentions they could have double paid people which would lead to that situation. Then there's the issue of seizure which apparently has happened at least once. Relying on your unlicensed money changer to be fair because "he is motivated to not go to jail" is precarious. Madoff's client's probably said the same thing... That's the beauty of the FDIC and the terrifying part about BTC exchanges.

sillysaurus2 13y ago
The only reason I have confidence is because two years ago Magical Tux began transferring around 440k bitcoins in order to prove ownership of those coins: http://www.reddit.com/r/Bitcoin/comments/n4a2o/someone_has_been_transferring_around_440k/ http://www.reddit.com/r/Bitcoin/comments/n4a2o/someone_has_b... If he had 440k coins then, imagine how many he has now. Yes, he could have lost a lot, but on the other hand we'd probably have heard if someone pulled off that kind of heist. Here's how I expect things will happen: Gox will refund all "stuck" withdrawls. (Mine have already been refunded.) Then they will fix the technical problem, hopefully by Monday, but certainly within a couple weeks. Then they'll re-enable bitcoin withdraws. At that point, everybody will yank their bitcoin out of Gox. But then people will realize that there is value in trading on Gox as a platform, and Gox will be used for what it's meant to be used for: Trading, not storage. EDIT: To clarify, I don't believe it's possible they had a technical problem that led to them losing more bitcoins than the profits they've made from trading fees. (This is me being hopeful that people can't be that incompetent.)
- XorNot 13y ago
  It's not a technical problem. The problem is Mt. Gox is almost certainly doing arbitrage with the cash on hand, and the BTC on hand. The delays with withdrawals were almost certainly because they needed to liquefy some instruments to pay out. Of course seeing their origins and backing, they've screwed up - and BTC being volatile it has probably moved against them - so low and behold "technical problem" while they try to figure out how to get solvent again. Punchline: real cash gets refunded, the BTC will not be, anyone holding BTC is going to lose big as the price tanks.
  - jrockway 13y ago
    The delays with withdrawals were almost certainly because they needed to liquefy some instruments to pay out. I would guess this is a fraud-stopping measure. Time is a fraudster's enemy; you may have guessed someone's password, but if they read the email that says someone changed their email address, they can react before the money disappears into the ether. Furthermore, Mt. Gox can probably predict in advance how much cash they'll need to fulfill withdrawals, and liquidate the instruments in advance to make withdrawals instant, if they so chose. Everyone loves a good conspiracy theory, but the reality of running a money transfer business makes Mt. Gox look pretty normal.
    - username223 13y ago
      > Time is a fraudster's enemy; If I agree to hold your money, then "need more time" to give it back to you, how exactly is time being my enemy?
- deleted 13y ago
  [deleted]
- anigbrowl 13y ago
  But then people will realize that there is value in trading on Gox as a platform What value is this, exactly? You seem to be assuming that having fixed this problem the platform will never break down again, ever.
- 13y ago

gamblor956 13y ago

Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. For those of you who are wondering, this is because MtGox is Japan-based. In Japan, virtual/digital goods are considered property that can be "stolen." There have been a few cases on this in Japan, though it's never been tested outside of the gaming context and AFAIK nobody's actually gone to jail for stealing a virtual good (yet).

smtddr 13y ago

I don't know what will happen to MtGox, but you sound just like the SheepMarketPlace defenders when they kept coming up with all kinds of ways to downplay all the events leading up to SMP's disappearing act. I don't know how you're so sure they won't fall into oblivion. They've been a big mess for months. Anyone else reading this who's new to crypto-coins, at the _minimum_ I do not recommend you send any of your coins/fiat to MtGox at this time.

coldtea 13y ago
When there's some "gold rush" mentality involved, logic goes out of the window.
username223 13y ago
For anyone new to crypto-coins, "fiat" is a derogatory term for "cash money," not a small European car.

foobarqux 13y ago

The correct way to assuage uncertainty about insolvency is to submit to a financial audit from a reputable auditor.

foobarqux 13y ago

How did MtGox get freshly-minted coins if they can't be transferred?

nwh 13y ago
Eligius / p2pool payouts directly to Gox's wallet.

EpicEng 13y ago

"Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC." Weird, I wonder what all of those bank robbers are motivated by... money, sure, but I'm pretty sure they aren't itching to go to jail either.

coldtea 13y ago

>Hence, since Magical Tux (the owner) is motivated not to go to jail, he will not run off with people's BTC. Except if, like every fraudster ever, he believes that he has a good plan to run off AND avoid going to jail. I mean, what kind of bizarro logic is this? Are we supposed to listen to further "rational" arguments now? Also, seriously, people place their money (in whatever form) in someone who calls himself "Magical Tux"? A guy whose profile in Twitter reads "PHP Developer working on some weird stuff, like a mail server (POP3/IMAP4/SMTP) written in PHP"? Sure, that inspires confidence in a money exchange. Might as well invest your money directly to that Nigerian prince too.