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Bitcoin Prices Down As Mt. Gox Concerns Escalate

81 points by dcawrey 13y ago

JacobAldridge 13y ago
Hmmm... If you removed 6% of the world's gold supply (or even, if it were knowable, 3.5% of all the world's gold supply ever) you would expect the price of the remaining gold to rise. Bitcoin dropping is a sign of panic and uncertainty in the market about the long term viability of it to retain value. If you're confident the underlying value still exists, as many people would do with gold, then this is a great buying opportunity. /s/gold/commodity-of-your-choice I'm not trying to debate fiat currencies and gold standards here. [Edit: Thanks to the commenters below for pointing out that the MtGox money hasn't been lost to the world.]
- stan_rogers 13y ago
  It hasn't been removed, just moved. Scarcity hasn't changed, but a question about what "ownership" means has been introduced. When I have a buck in my pocket, I have a buck in my pocket. When I "have" a coin in my wallet, do I really have a coin in my wallet, or just some bits that represent a previous state of a coin that has long since moved on?
  - aidos 13y ago
    I haven't looked in to the details but if it was in your wallet it would be safe. The issue is people leaving coins in online wallets where the security is in the hands of others (who really don't have the experience required).
    - stan_rogers 13y ago
      The thing is that you can have many more than one copy of a wallet. Are you sure that you have control over all of them, and that they're all secure? Again, to go to the cash analogy: I know that the buck I have in my pocket is the only copy of that particular buck, that nobody else can spend that buck as long as I'm sure its in my pocket. Yes, bummer if I lose the buck, since there's no backup pocket with the same buck in it at home or in a safe deposit box somewhere. But at the same time, nobody can take my backup pocket and spend the buck that's in it, evaporating the value of the buck that I know is in my pocket.
      - lucian1900 13y ago
        The contents of a bitcoin wallet are more akin to deposit box keys. You could copy the key and either copy would open the box.
      - aidos 13y ago
        I don't totally understand your analogy. I have my own wallet and I can keep that secure. If someone takes that from me it's akin to being mugged, or having my house burgled. That sucks but it's a bit different from giving someone else my wallet to look after. With these exchanges, most people don't seem to know better, and treat them as banks. They're not banks, banks are regulated and governments make sure they don't just close their doors and walk off with your money.
        NotOscarWilde 13y ago
        I think the core of the analogy is not in the security itself, but in the user experience. Unless you trust a third party, carrying a Bitcoin wallet with you becomes a hassle -- you have to set up software to pay from a given PC, and if you move between a lot of devices, you have to assume even your private keys for your wallet may be compromised. I think at least when it comes to the experience, people would like to have BTC operations as seamless as sending money via their internetbanking or paying with a debit card. BTC then becomes less useful if you still need a large entity to trust so you have a pleasant experience sending and receiving money. (Useful still, but less so.)
        aidos 13y ago
        The usability is a huge and totally valid critisism, though I don't think for the reason you suggest. You can use software to allow you to sync keys between your devices. I use 1password - that's a fairly minor usability hurdle. More of an issue is the bitcoin client software itself. It's a usability disaster. From every point of view - it's hard to use / understand for the layman. But even as someone technically minded, it's hard to figure out what you need from the software to manage your wallet. Given that all you need to keep your coins safe is a tiny bit of text that you can take with you - why is it so hard to get it out and in to the client software? Edit: for a layperson the 1password hurdle is a lot bigger so you're right about how that's a major usability issue.
  - ftwinnovations 13y ago
    It's really more like a bank shut down, or maybe the bank owner stealing everyone's money. If you had a dollar in your pocket it would be fine, but here it was deposited into a bank that vanished.
  - Fuxy 13y ago
    You do if it's your personal wallet but it you trust another third party with it it's not in your pocket anymore is it?
- tlrobinson 13y ago
  Unfortunately if the rumors are true, that 6% is now owned by a thief, not destroyed.
- mehwoot 13y ago
  Even more than it not being lost, it's potentially now in the hands of people who stole it and probably want to sell it off.
  - dustcoin 13y ago
    MtGox claims the theft had gone on for "years", so the coins may already be sold long ago.
    - hvidgaard 13y ago
      If the theft have gone on for years they have had absolutely no check of the consistency of their inventory. They've relied on the transaction hash to identify a transaction, when it's been known for almost 3 years that it's malleable. This screams of utterly gross incompetence, or malicious intent.
      - k-mcgrady 13y ago
        >> "This screams of utterly gross incompetence, or malicious intent." When you are dealing with a persons money you need to know what you're doing. Gross incompetence is no excuse (and I've seen a lot of people on HN excusing MTGox and feeling sorry for them - not you, others -). Secondly when something goes this wrong you need to be honest. By failing to communicate with their customers their incompetence has become malicious. They are more concerned with themselves than their customers and this is particularly bad since we are dealing with peoples finances.
- JumpCrisscross 13y ago
  Same reason the lira would fall if a significant Turkish bank came out as a Ponzi scheme. Loss of confidence in the system's resilience paired with, to a lesser extent, uncertainty regarding future liquidity.
- Fuxy 13y ago
  Know any good exchanges to buy bitcoin on? I have no doubt bitcoin will recover and I'm going to put my money where my mouth is and buy some at it's lowest.
  - RutZap 13y ago
    If you're in the UK this is a very good place to buy some bitcoins: https://bitbargain.co.uk/buy https://bitbargain.co.uk/buy If not... maybe localbitcoins.com
    - Fuxy 13y ago
      Well actually I am :D
yardie 13y ago
Cough, E-gold[1], /cough. [1] http://en.wikipedia.org/wiki/E-gold#Criminal_abuse http://en.wikipedia.org/wiki/E-gold#Criminal_abuse
dharma1 13y ago
so someone got away with 740,000 bitcoins? at $500 per bitcoin, would that be the largest robbery ever?
- tragic 13y ago
  It would depend if you include large-scale bank frauds as 'robberies'. Or, indeed, if the 740k BTC all went to one person/organisation, rather than a lot of opportunists.
- rst 13y ago
  Rogue traders at conventional financial institutions (Nick Leeson at Barings; Jerome Kerviel at Societe Generale) each cost their employer over a billion dollars, but they didn't keep the money. So, if the perp here got away with all the stolen BTC, it's big. Even if not, it's up there...
fnordfnordfnord 13y ago
I'm a bit surprised/confused that the price has held as well as it has. http://bitcoinity.org/markets/ http://bitcoinity.org/markets/

81 points by dcawrey 13y ago

Hmmm... If you removed 6% of the world's gold supply (or even, if it were knowable, 3.5% of all the world's gold supply ever) you would expect the price of the remaining gold to rise. Bitcoin dropping is a sign of panic and uncertainty in the market about the long term viability of it to retain value. If you're confident the underlying value still exists, as many people would do with gold, then this is a great buying opportunity. /s/gold/commodity-of-your-choice I'm not trying to debate fiat currencies and gold standards here. [Edit: Thanks to the commenters below for pointing out that the MtGox money hasn't been lost to the world.]

stan_rogers 13y ago
It hasn't been removed, just moved. Scarcity hasn't changed, but a question about what "ownership" means has been introduced. When I have a buck in my pocket, I have a buck in my pocket. When I "have" a coin in my wallet, do I really have a coin in my wallet, or just some bits that represent a previous state of a coin that has long since moved on?
- aidos 13y ago
  I haven't looked in to the details but if it was in your wallet it would be safe. The issue is people leaving coins in online wallets where the security is in the hands of others (who really don't have the experience required).
  - stan_rogers 13y ago
    The thing is that you can have many more than one copy of a wallet. Are you sure that you have control over all of them, and that they're all secure? Again, to go to the cash analogy: I know that the buck I have in my pocket is the only copy of that particular buck, that nobody else can spend that buck as long as I'm sure its in my pocket. Yes, bummer if I lose the buck, since there's no backup pocket with the same buck in it at home or in a safe deposit box somewhere. But at the same time, nobody can take my backup pocket and spend the buck that's in it, evaporating the value of the buck that I know is in my pocket.
    - lucian1900 13y ago
      The contents of a bitcoin wallet are more akin to deposit box keys. You could copy the key and either copy would open the box.
    - aidos 13y ago
      I don't totally understand your analogy. I have my own wallet and I can keep that secure. If someone takes that from me it's akin to being mugged, or having my house burgled. That sucks but it's a bit different from giving someone else my wallet to look after. With these exchanges, most people don't seem to know better, and treat them as banks. They're not banks, banks are regulated and governments make sure they don't just close their doors and walk off with your money.
      - NotOscarWilde 13y ago
        I think the core of the analogy is not in the security itself, but in the user experience. Unless you trust a third party, carrying a Bitcoin wallet with you becomes a hassle -- you have to set up software to pay from a given PC, and if you move between a lot of devices, you have to assume even your private keys for your wallet may be compromised. I think at least when it comes to the experience, people would like to have BTC operations as seamless as sending money via their internetbanking or paying with a debit card. BTC then becomes less useful if you still need a large entity to trust so you have a pleasant experience sending and receiving money. (Useful still, but less so.)
        aidos 13y ago
        The usability is a huge and totally valid critisism, though I don't think for the reason you suggest. You can use software to allow you to sync keys between your devices. I use 1password - that's a fairly minor usability hurdle. More of an issue is the bitcoin client software itself. It's a usability disaster. From every point of view - it's hard to use / understand for the layman. But even as someone technically minded, it's hard to figure out what you need from the software to manage your wallet. Given that all you need to keep your coins safe is a tiny bit of text that you can take with you - why is it so hard to get it out and in to the client software? Edit: for a layperson the 1password hurdle is a lot bigger so you're right about how that's a major usability issue.
- ftwinnovations 13y ago
  It's really more like a bank shut down, or maybe the bank owner stealing everyone's money. If you had a dollar in your pocket it would be fine, but here it was deposited into a bank that vanished.
- Fuxy 13y ago
  You do if it's your personal wallet but it you trust another third party with it it's not in your pocket anymore is it?
tlrobinson 13y ago
Unfortunately if the rumors are true, that 6% is now owned by a thief, not destroyed.
mehwoot 13y ago
Even more than it not being lost, it's potentially now in the hands of people who stole it and probably want to sell it off.
- dustcoin 13y ago
  MtGox claims the theft had gone on for "years", so the coins may already be sold long ago.
  - hvidgaard 13y ago
    If the theft have gone on for years they have had absolutely no check of the consistency of their inventory. They've relied on the transaction hash to identify a transaction, when it's been known for almost 3 years that it's malleable. This screams of utterly gross incompetence, or malicious intent.
    - k-mcgrady 13y ago
      >> "This screams of utterly gross incompetence, or malicious intent." When you are dealing with a persons money you need to know what you're doing. Gross incompetence is no excuse (and I've seen a lot of people on HN excusing MTGox and feeling sorry for them - not you, others -). Secondly when something goes this wrong you need to be honest. By failing to communicate with their customers their incompetence has become malicious. They are more concerned with themselves than their customers and this is particularly bad since we are dealing with peoples finances.
JumpCrisscross 13y ago
Same reason the lira would fall if a significant Turkish bank came out as a Ponzi scheme. Loss of confidence in the system's resilience paired with, to a lesser extent, uncertainty regarding future liquidity.
Fuxy 13y ago
Know any good exchanges to buy bitcoin on? I have no doubt bitcoin will recover and I'm going to put my money where my mouth is and buy some at it's lowest.
- RutZap 13y ago
  If you're in the UK this is a very good place to buy some bitcoins: https://bitbargain.co.uk/buy https://bitbargain.co.uk/buy If not... maybe localbitcoins.com
  - Fuxy 13y ago
    Well actually I am :D

yardie 13y ago

Cough, E-gold[1], /cough. [1] http://en.wikipedia.org/wiki/E-gold#Criminal_abuse http://en.wikipedia.org/wiki/E-gold#Criminal_abuse

dharma1 13y ago

so someone got away with 740,000 bitcoins? at $500 per bitcoin, would that be the largest robbery ever?

tragic 13y ago
It would depend if you include large-scale bank frauds as 'robberies'. Or, indeed, if the 740k BTC all went to one person/organisation, rather than a lot of opportunists.
rst 13y ago
Rogue traders at conventional financial institutions (Nick Leeson at Barings; Jerome Kerviel at Societe Generale) each cost their employer over a billion dollars, but they didn't keep the money. So, if the perp here got away with all the stolen BTC, it's big. Even if not, it's up there...

fnordfnordfnord 13y ago

I'm a bit surprised/confused that the price has held as well as it has. http://bitcoinity.org/markets/ http://bitcoinity.org/markets/