5 ms·

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.
        bottled_poe 13y ago
        Isn't he in jail now? And also, which individuals? We are lucky enough to live in a society where "expressing concern" is not sufficient to put someone in jail.
        pmorici 13y ago
        Yes he is in jail, read the Wikipedia article for the details but basically people reported concerns to the SEC on 5 separate occasions beginning in 1999. The SEC ignored the complaints until Madof himself admitted to his sons in 2008 that it was a total ponzi and his own sons turned him in to the FBI. After he was arrested by the FBI in 2008 the SEC aka "the regulator" took action against him in 2009. Point is the regulator in charge didn't bother to investigate and didn't do anything.
        jonknee 13y ago
        In the end not much money was actually lost though. The huge losses you see in the headlines were mainly the fake gains. If you "invested" $1m with me for 10 years and I reported a 26% annual return you would have a $10m account on paper, but the gains never existed and as such were never stolen. People who withdrew their gains were sued and had to return the money. The scam was told to be $65B, but the actual losses were ~$17B and they have recovered more than half that (over $9B). Additionally the IRS let the losses be written off, so you and I ended up picking up another half of that tab. tl;dr it was an awfully large scam, but not nearly as large as most think. Less than half the value of an instant message client actually and only a few Instagrams.
        13y ago
    - workhere-io 13y ago
      It's not a question of whether scams happen - it's a question of how many scams happen and how severe they are.
- zxcdw 13y ago
  Because as you imply in your other comment, MtGox is not deemed as trustworthy exhange by many. It is good that Bitcoin doesn't rely so much on it for now. After all, MtGox is not Bitcoin.
- pmorici 13y ago
  This isn't the first time a Bitcoin company has imploded taking a large amount of customer funds with it. A lot of people have also seen this train wreck coming for a long time, like nearly 10 months ago it was obvious something wasn't quite right. Many people had already moved from Gox to more reputable exchanges like Bitstamp or Coinbase. This might effect Bitcoin in the near term while this shakes out but long term I doubt it will be more than a sentence in this history of Bitcoin's rise.
  - kristianp 13y ago
    This is so harmful, because Mt Gox has been seen as the main exchange by many people, despite being almost useless for withdrawing USD for many months. People should have been avoiding it like the plague, but it was still a large percentage of the market. One lesson here is that an exchange shouldn't be used as a wallet, i.e. Don't keep funds there for a significant length of time. Put your usd/btc in there, make your trades, then take the btc/usd out asap.
    - deleted 13y ago
      [deleted]
  - joezydeco 13y ago
    Coinbase has had it's share of hiccups and software fails as well. Are they still on MongoDB?
    - smtddr 13y ago
      Is there something wrong with MongoDB that I don't know about? Is it not suitable for Coinbase's business?
      - joezydeco 13y ago
        Let's review... https://news.ycombinator.com/item?id=5428382 https://news.ycombinator.com/item?id=5428382
- wmf 13y ago
  The number of people who have not yet been "Goxed" dwarfs the number who are being screwed right now.
- meowface 13y ago
  This isn't going to kill Bitcoin. MtGox has been seen as an extremely unreliable exchange since 2012, despite the healthy growth and relative stability of a few other competing exchanges. It's no shock that Gox would die due to technical problems like this; they're not run by a technologically competent staff (compared to, say, Coinbase, a YC startup).
- matteotom 13y ago
  It will be a problem for a while, as the price drops, people get screwed, and people lose confidence in Bitcoin. However, it is probably best to not have the largest exchange be a disaster that has repeatedly shown its technical incompetence. For Bitcoin to move forward, Mt.Gox needs to go. EDIT: in addition, hopefully people will learn from this, and not use exchanges as wallets, and not (try to) make trades on an exchange without doing their research first.
- tlrobinson 13y ago
  I believe "That which does not kill us makes us stronger" very much applies to Bitcoin. It will be painful for those people, but this is par for the course with Bitcoin and somehow it's still thriving (see: https://bitcointalk.org/index.php?topic=83794.0 https://bitcointalk.org/index.php?topic=83794.0) Bitcoin is a decentralized system that relies on many centralized services, but it also enables decentralized versions of many of those services to be built. As each centralized service gets picked off for one reason or another (Silk Road, Mt Gox) people will realize why the decentralized and trustless versions are necessary and migrate to those. This is exactly what happened with file sharing (Napster, Gnutella, BitTorrent, etc), and we're starting to see it happening with money (Bitcoin), messaging (Bitmessage), DNS/naming (Namecoin), coin mixers (CoinJoin), exchanges (Ripple), etc.
- pyalot2 13y ago
  Consider the people who haven't been screwed yet (in the future). If Gox manages to survive this and expand their customer base, it's wash, rhinse and repeat. Nobody wants that.

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.
      - bottled_poe 13y ago
        Isn't he in jail now? And also, which individuals? We are lucky enough to live in a society where "expressing concern" is not sufficient to put someone in jail.
        pmorici 13y ago
        Yes he is in jail, read the Wikipedia article for the details but basically people reported concerns to the SEC on 5 separate occasions beginning in 1999. The SEC ignored the complaints until Madof himself admitted to his sons in 2008 that it was a total ponzi and his own sons turned him in to the FBI. After he was arrested by the FBI in 2008 the SEC aka "the regulator" took action against him in 2009. Point is the regulator in charge didn't bother to investigate and didn't do anything.
      - jonknee 13y ago
        In the end not much money was actually lost though. The huge losses you see in the headlines were mainly the fake gains. If you "invested" $1m with me for 10 years and I reported a 26% annual return you would have a $10m account on paper, but the gains never existed and as such were never stolen. People who withdrew their gains were sued and had to return the money. The scam was told to be $65B, but the actual losses were ~$17B and they have recovered more than half that (over $9B). Additionally the IRS let the losses be written off, so you and I ended up picking up another half of that tab. tl;dr it was an awfully large scam, but not nearly as large as most think. Less than half the value of an instant message client actually and only a few Instagrams.
        13y ago
  - workhere-io 13y ago
    It's not a question of whether scams happen - it's a question of how many scams happen and how severe they are.
zxcdw 13y ago
Because as you imply in your other comment, MtGox is not deemed as trustworthy exhange by many. It is good that Bitcoin doesn't rely so much on it for now. After all, MtGox is not Bitcoin.
pmorici 13y ago
This isn't the first time a Bitcoin company has imploded taking a large amount of customer funds with it. A lot of people have also seen this train wreck coming for a long time, like nearly 10 months ago it was obvious something wasn't quite right. Many people had already moved from Gox to more reputable exchanges like Bitstamp or Coinbase. This might effect Bitcoin in the near term while this shakes out but long term I doubt it will be more than a sentence in this history of Bitcoin's rise.
- kristianp 13y ago
  This is so harmful, because Mt Gox has been seen as the main exchange by many people, despite being almost useless for withdrawing USD for many months. People should have been avoiding it like the plague, but it was still a large percentage of the market. One lesson here is that an exchange shouldn't be used as a wallet, i.e. Don't keep funds there for a significant length of time. Put your usd/btc in there, make your trades, then take the btc/usd out asap.
  - deleted 13y ago
    [deleted]
- joezydeco 13y ago
  Coinbase has had it's share of hiccups and software fails as well. Are they still on MongoDB?
  - smtddr 13y ago
    Is there something wrong with MongoDB that I don't know about? Is it not suitable for Coinbase's business?
    - joezydeco 13y ago
      Let's review... https://news.ycombinator.com/item?id=5428382 https://news.ycombinator.com/item?id=5428382
wmf 13y ago
The number of people who have not yet been "Goxed" dwarfs the number who are being screwed right now.
meowface 13y ago
This isn't going to kill Bitcoin. MtGox has been seen as an extremely unreliable exchange since 2012, despite the healthy growth and relative stability of a few other competing exchanges. It's no shock that Gox would die due to technical problems like this; they're not run by a technologically competent staff (compared to, say, Coinbase, a YC startup).
matteotom 13y ago
It will be a problem for a while, as the price drops, people get screwed, and people lose confidence in Bitcoin. However, it is probably best to not have the largest exchange be a disaster that has repeatedly shown its technical incompetence. For Bitcoin to move forward, Mt.Gox needs to go. EDIT: in addition, hopefully people will learn from this, and not use exchanges as wallets, and not (try to) make trades on an exchange without doing their research first.
tlrobinson 13y ago
I believe "That which does not kill us makes us stronger" very much applies to Bitcoin. It will be painful for those people, but this is par for the course with Bitcoin and somehow it's still thriving (see: https://bitcointalk.org/index.php?topic=83794.0 https://bitcointalk.org/index.php?topic=83794.0) Bitcoin is a decentralized system that relies on many centralized services, but it also enables decentralized versions of many of those services to be built. As each centralized service gets picked off for one reason or another (Silk Road, Mt Gox) people will realize why the decentralized and trustless versions are necessary and migrate to those. This is exactly what happened with file sharing (Napster, Gnutella, BitTorrent, etc), and we're starting to see it happening with money (Bitcoin), messaging (Bitmessage), DNS/naming (Namecoin), coin mixers (CoinJoin), exchanges (Ripple), etc.
pyalot2 13y ago
Consider the people who haven't been screwed yet (in the future). If Gox manages to survive this and expand their customer base, it's wash, rhinse and repeat. Nobody wants that.