5 ms·

Bitcoin’s Value Falls 10% as Faltering Mt.Gox Exchange Continues to Implode

33 points by JacobH 13y ago

anigbrowl 13y ago
It's worth noting that Mt Gox's new offices as listed on their support website appear to be in a hotel. Hmmm. https://www.google.com/maps/@35.656428,139.698518,3a,75y,117.7h,90.44t/data=!3m4!1e1!3m2!1sc9xN3tl5Of6eQOLVNjs4Pw!2e0!6m1!1e1 https://www.google.com/maps/@35.656428,139.698518,3a,75y,117...
- sanswork 13y ago
  The 4th through 16th floors are office space. The hotels up top.
- pmorici 13y ago
  It's one of those virtual office services. The "new" address is also their original address which they used to use before they moved to their current, now former, location.
- dustcoin 13y ago
  This "office" isn't "new". It is their old address before they moved, I sent a document there in 2011.
matteotom 13y ago
While this may be painful, it will be better for Bitcoin in the long run to shrug off the dependence on Mt.Gox.
- camus2 13y ago
  How can it be? do you really think the people that got screwed will continue buying and have faith in bitcoins? I wouldnt.
  - ossreality 13y ago
    Because you don't the first thing about what's going on? Ok.
  - sillysaurus2 13y ago
    Agreed. How could Gox imploding result in a better bitcoin world? I'd lose a ton of money, so my little world would be directly worsened. The price of bitcoin is now about $500, but it likely would've stayed >$650. And now people will forever use this as an example of why bitcoin is dangerous: financial unregulation is dangerous. It will be just another page in history, yes, but it's a painful one. Personally I still believe Gox will ultimately be okay since everything still has a logical explanation, but hypothetically it seems hard to believe that Gox self-destructing would be anything but bad news.
    - pmorici 13y ago
      Scams happen even in supposedly highly regulated financial companies you only need to look as far as Bernie Madoff and Jon Corzie's MF Global this doesn't really have much to do with regulation.
      - stinkytaco 13y ago
        I think the argument is that there's nothing to stop this from happening all the time and maybe even perpetrated by the same people. Yes, scams happen, but there are repercussions and sometimes preventative measures even work. The Mt. Gox soap opera is not something that would occur in a regulated baking environment (at least in the US environment), but in bitcoin it's been dragged out for months (since it became a target of the US Government). It's bad publicity if nothing else. I believe in bitcoin and its long term potential, but there is no question that lack of regulated exchanges will stunt its long term acceptance.
        pmorici 13y ago
        "The Mt. Gox soap opera is not something that would occur in a regulated banking environment" That just isn't true. Bernie Madoff got away with his outright ponzi scheme for nearly 10 years before being caught. Individuals expressed concern to the SEC about Madoff's investment fund as early as 1999. The SEC didn't do anything until 2009.
camus2 13y ago
To the ground ! So here is MtGox owners exit strategy, vulgar theft.
- TrainedMonkey 13y ago
  Problem with mtgox is not that people think they are going to run with the money. Issue lies with the fact that they had some of bitcoins stolen with transaction malleability issue. Question is just how much got stolen. What market thinks with bitcoin price @mtgox is that they do not have enough bitcoins to cover all the people who want to withdraw them.
  - camus2 13y ago
    That's what they said, i choose not to believe them. If i'm ignorant you are just naive. Do you think these people are stupid? they know what they are doing you are just drinking the kool aid.
  - derwiki 13y ago
    Your reply would have been better without the first sentence :(
    - TrainedMonkey 13y ago
      Made the edit. Thanks for having a cooler head.
ihsw 13y ago
There is some speculation of insider trading, too. http://i.imgur.com/qLYhzR3.jpg http://i.imgur.com/qLYhzR3.jpg
- buttcoinslol 13y ago
  Bitcoin wanted an unregulated currency, Bitcoin got an unregulated currency.
  - lmg643 13y ago
    regulation is not a guarantee of much. major banks in foreign exchange are in the middle of a scandal involving widespread collusion on fixing of prices.
  - 300bps 13y ago
    Bernie Madoff's customers wanted a regulated market. Bernie Madoff's customers got a regulated market. CMO buyers wanted a regulated market. CMO buyers got a regulated market. I could go on for a while. But I'm left wondering - do you really think that your comment is insightful or are you just reveling in schadenfreude?
    - camus2 13y ago
      Bernie's in jail.the system works. what's your point?
      - 300bps 13y ago
        Oh, silly me! $18 billion missing from investor's wallets but he's in jail so no harm no foul. http://en.wikipedia.org/wiki/Bernard_Madoff#Size_of_loss_to_investors http://en.wikipedia.org/wiki/Bernard_Madoff#Size_of_loss_to_...
        bottled_poe 13y ago
        A ponzi scheme is what this system of greed demanded. The same will come to pass again.
InclinedPlane 13y ago
Please form two orderly lines. People who are shocked, appalled, and surprised form to the left. People who are just itching to say "I told you so!" please form to the right. I hear refreshments and snack cakes are to be served and a bar will begin selling liquor soon (cash only).
- Tohhou 13y ago
  Third line: cold indifference.
  - briansmith 13y ago
    It would be hard to convince them to line up.
Cbasedlifeform 13y ago
Does anyone know how much of the total BTC are still held within Mt Gox? If MG does indeed implode or go bankrupt, what happens to the BTC it still holds? I feel sorry for those who trusted MG with their BTC, but the writing was on the wall a while ago.
fingerprinter 13y ago
ELI5. How can a bitcoin on Mt.Gox be going for one price and the "general" bitcoing market be going for another? I feel like I'm missing something.
- SerpentJoe 13y ago
  Non-Gox bitcoins have higher utility, in that they can be withdrawn.
- batiudrami 13y ago
  Because the current price is just whatever a seller and buyer have 'agreed' to pay at any one time, if there are possible issues with bitcoins on one exchange (for instance, the real or imagined possibility that your bitcoins may go missing on MT Gox, or that there will be difficulties selling or retrieving the ones you hold in that exchange), people will be willing to pay less than the going rate for bitcoins on that exchange. Elsewhere, where this issue doesn't directly exist, people will still be willing to pay full price (though issues at MTGox may affect buyer confidence on other exchange, which leads to an overall decrease in Bitcoin price).
- tb 13y ago
  Default risk. The price for a bitcoin that is currently held by Mt.Gox factors in the market's expectation that said bitcoin will be able to be redeemed from Mt.Gox. Analogous to why your bank charges you a higher interest rate on a loan if you have a poor credit score, to compensate them for the perceived risk that you fail to repay the loan.
- maxerickson 13y ago
  Gox is holding both the bitcoin and the dollars involved in the trades. They have been doing a questionable job of transferring dollars out to customers for months and recently they stopped transferring bitcoin out to customers (supposedly due to some technical issues). So basically MtGox isn't very connected to the general market.
pyalot2 13y ago
Bravo, spot on headline. Wired, are you reading this, maybe take an example?

33 points by JacobH 13y ago

It's worth noting that Mt Gox's new offices as listed on their support website appear to be in a hotel. Hmmm. https://www.google.com/maps/@35.656428,139.698518,3a,75y,117.7h,90.44t/data=!3m4!1e1!3m2!1sc9xN3tl5Of6eQOLVNjs4Pw!2e0!6m1!1e1 https://www.google.com/maps/@35.656428,139.698518,3a,75y,117...

sanswork 13y ago
The 4th through 16th floors are office space. The hotels up top.
pmorici 13y ago
It's one of those virtual office services. The "new" address is also their original address which they used to use before they moved to their current, now former, location.
dustcoin 13y ago
This "office" isn't "new". It is their old address before they moved, I sent a document there in 2011.

matteotom 13y ago

While this may be painful, it will be better for Bitcoin in the long run to shrug off the dependence on Mt.Gox.

camus2 13y ago
How can it be? do you really think the people that got screwed will continue buying and have faith in bitcoins? I wouldnt.
- ossreality 13y ago
  Because you don't the first thing about what's going on? Ok.
- sillysaurus2 13y ago
  Agreed. How could Gox imploding result in a better bitcoin world? I'd lose a ton of money, so my little world would be directly worsened. The price of bitcoin is now about $500, but it likely would've stayed >$650. And now people will forever use this as an example of why bitcoin is dangerous: financial unregulation is dangerous. It will be just another page in history, yes, but it's a painful one. Personally I still believe Gox will ultimately be okay since everything still has a logical explanation, but hypothetically it seems hard to believe that Gox self-destructing would be anything but bad news.
  - pmorici 13y ago
    Scams happen even in supposedly highly regulated financial companies you only need to look as far as Bernie Madoff and Jon Corzie's MF Global this doesn't really have much to do with regulation.
    - stinkytaco 13y ago
      I think the argument is that there's nothing to stop this from happening all the time and maybe even perpetrated by the same people. Yes, scams happen, but there are repercussions and sometimes preventative measures even work. The Mt. Gox soap opera is not something that would occur in a regulated baking environment (at least in the US environment), but in bitcoin it's been dragged out for months (since it became a target of the US Government). It's bad publicity if nothing else. I believe in bitcoin and its long term potential, but there is no question that lack of regulated exchanges will stunt its long term acceptance.
      - pmorici 13y ago
        "The Mt. Gox soap opera is not something that would occur in a regulated banking environment" That just isn't true. Bernie Madoff got away with his outright ponzi scheme for nearly 10 years before being caught. Individuals expressed concern to the SEC about Madoff's investment fund as early as 1999. The SEC didn't do anything until 2009.

camus2 13y ago

To the ground ! So here is MtGox owners exit strategy, vulgar theft.

TrainedMonkey 13y ago
Problem with mtgox is not that people think they are going to run with the money. Issue lies with the fact that they had some of bitcoins stolen with transaction malleability issue. Question is just how much got stolen. What market thinks with bitcoin price @mtgox is that they do not have enough bitcoins to cover all the people who want to withdraw them.
- camus2 13y ago
  That's what they said, i choose not to believe them. If i'm ignorant you are just naive. Do you think these people are stupid? they know what they are doing you are just drinking the kool aid.
- derwiki 13y ago
  Your reply would have been better without the first sentence :(
  - TrainedMonkey 13y ago
    Made the edit. Thanks for having a cooler head.

ihsw 13y ago

There is some speculation of insider trading, too. http://i.imgur.com/qLYhzR3.jpg http://i.imgur.com/qLYhzR3.jpg

buttcoinslol 13y ago
Bitcoin wanted an unregulated currency, Bitcoin got an unregulated currency.
- lmg643 13y ago
  regulation is not a guarantee of much. major banks in foreign exchange are in the middle of a scandal involving widespread collusion on fixing of prices.
- 300bps 13y ago
  Bernie Madoff's customers wanted a regulated market. Bernie Madoff's customers got a regulated market. CMO buyers wanted a regulated market. CMO buyers got a regulated market. I could go on for a while. But I'm left wondering - do you really think that your comment is insightful or are you just reveling in schadenfreude?
  - camus2 13y ago
    Bernie's in jail.the system works. what's your point?
    - 300bps 13y ago
      Oh, silly me! $18 billion missing from investor's wallets but he's in jail so no harm no foul. http://en.wikipedia.org/wiki/Bernard_Madoff#Size_of_loss_to_investors http://en.wikipedia.org/wiki/Bernard_Madoff#Size_of_loss_to_...
      - bottled_poe 13y ago
        A ponzi scheme is what this system of greed demanded. The same will come to pass again.

InclinedPlane 13y ago

Please form two orderly lines. People who are shocked, appalled, and surprised form to the left. People who are just itching to say "I told you so!" please form to the right. I hear refreshments and snack cakes are to be served and a bar will begin selling liquor soon (cash only).

Tohhou 13y ago
Third line: cold indifference.
- briansmith 13y ago
  It would be hard to convince them to line up.

Cbasedlifeform 13y ago

Does anyone know how much of the total BTC are still held within Mt Gox? If MG does indeed implode or go bankrupt, what happens to the BTC it still holds? I feel sorry for those who trusted MG with their BTC, but the writing was on the wall a while ago.

fingerprinter 13y ago

ELI5. How can a bitcoin on Mt.Gox be going for one price and the "general" bitcoing market be going for another? I feel like I'm missing something.

SerpentJoe 13y ago
Non-Gox bitcoins have higher utility, in that they can be withdrawn.
batiudrami 13y ago
Because the current price is just whatever a seller and buyer have 'agreed' to pay at any one time, if there are possible issues with bitcoins on one exchange (for instance, the real or imagined possibility that your bitcoins may go missing on MT Gox, or that there will be difficulties selling or retrieving the ones you hold in that exchange), people will be willing to pay less than the going rate for bitcoins on that exchange. Elsewhere, where this issue doesn't directly exist, people will still be willing to pay full price (though issues at MTGox may affect buyer confidence on other exchange, which leads to an overall decrease in Bitcoin price).
tb 13y ago
Default risk. The price for a bitcoin that is currently held by Mt.Gox factors in the market's expectation that said bitcoin will be able to be redeemed from Mt.Gox. Analogous to why your bank charges you a higher interest rate on a loan if you have a poor credit score, to compensate them for the perceived risk that you fail to repay the loan.
maxerickson 13y ago
Gox is holding both the bitcoin and the dollars involved in the trades. They have been doing a questionable job of transferring dollars out to customers for months and recently they stopped transferring bitcoin out to customers (supposedly due to some technical issues). So basically MtGox isn't very connected to the general market.

pyalot2 13y ago

Bravo, spot on headline. Wired, are you reading this, maybe take an example?