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Mtgox existed because Only ways to get bitcoin: 1. Mine them (very very hard and getting harder) 2. Get paid in bitcoin for product/service 3. Buy them on a

by dcc1 13y ago

Mtgox existed because Only ways to get bitcoin: 1. Mine them (very very hard and getting harder) 2. Get paid in bitcoin for product/service 3. Buy them on an exchange for fiat 4. Be given bitcoin by early adopters Until its possible to get paid (salaries), pay suppliers, pay taxes etc the exchanges are needed to convert traditional currency to bitcoin and vice versa. Anyways the writing was on the wall for a long time, i stopped using them over a year ago, bitstamp are professional while mtgox were amateur cowboys with no support.

zeckalpha 13y ago
Isn't number 3 just a variation of number 4, with a middleman? That's all I mean. Can't software exist for individual early adopters to sell their coin in exchange for fiat at market values without a centralized exchange? To me, it seems like centralized exchange just leads to collapse.
- nwatson 13y ago
  Not all early adopters will want to sell. Heirs to their estate will ... which is why in the next 40 years there will be a few floods of bitcoin supply to deal with.
  - zeckalpha 13y ago
    If that is the case, where does the exchange get its coin?
- dcc1 13y ago
  There is work being done on distributed exchange, the problem is quite difficult tho, I believe there is an exchange in germany that works quite well and users pay by bank transfer between each other (sepa transfers are cheap or free) There is also localbitcoin some people used mtgox to trade, but I can not understand why since their fees were high, trading engine slow and buggy and well there are better alternatives
- dragonwriter 13y ago
  > Can't software exist for individual early adopters to sell their coin in exchange for fiat at market values without a centralized exchange? As I see it, the tricky bit without an exchange is (1) establishing a "market price" in the first place, and (2) coordinating the fiat side of the transaction with the cryptocurrency side (the same problem exists between two different cryptocurrencies with different networks) so that the two either succeed or fail together.
corresation 13y ago
bitstamp are professional while mtgox were amateur cowboys with no support. This is all so clear now, it seems. Further, Bitstamp was bitten by exactly the same bug (the malleability bug which was apparently what demonstrated Gox's purported cluelessness, and which I highly doubt was the cause of MtGox's apparent failure). Unless there was an independent audit by a third party, why should you trust that they won't fall victim to exactly the same issue?
- nullc 13y ago
  > Bitstamp was bitten by exactly the same bug (the malleability bug This is not factually correct. Bitstamp and MTGox's issues were unrelated, and the transactions that caused problems for Bitstamp were never seen on the network prior to a couple hours before MTGox's press release (and in volume, until after it).
  - corresation 13y ago
    Bitstamp and MTGox's issues were unrelated In both cases there was an issue with the service having transaction issues due to the malleability issue. Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated? Now supposedly Gox was robbed (over months) using this exploit, but that simply makes no sense at all, and is people grasping, in the absence of anything else. It seems more likely that someone got the private keys on holdings wallets, whether insider or hacker.
    - nullc 13y ago
      > Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated? Because they were unrelated. Bitstamp was spending its own unconfirmed change, and those spends got hung when the change was mutated by the attacker— with an attack that didn't exist while MTGox was processing withdraws. MTGox happened to never spend any coins that weren't at least 6 deep in the blockchain, even it's own change. > and is people grasping, in the absence of anything else It's actually MTGox's own claims. Their actual issues in this space were because they reissued payments without conflicting the original payment— allowing both to go through. No one else, as far as I can find, was performing reissues at all— much less in such an unsafe manner.

by dcc1 13y ago

zeckalpha 13y ago

Isn't number 3 just a variation of number 4, with a middleman? That's all I mean. Can't software exist for individual early adopters to sell their coin in exchange for fiat at market values without a centralized exchange? To me, it seems like centralized exchange just leads to collapse.

nwatson 13y ago
Not all early adopters will want to sell. Heirs to their estate will ... which is why in the next 40 years there will be a few floods of bitcoin supply to deal with.
- zeckalpha 13y ago
  If that is the case, where does the exchange get its coin?
dcc1 13y ago
There is work being done on distributed exchange, the problem is quite difficult tho, I believe there is an exchange in germany that works quite well and users pay by bank transfer between each other (sepa transfers are cheap or free) There is also localbitcoin some people used mtgox to trade, but I can not understand why since their fees were high, trading engine slow and buggy and well there are better alternatives
dragonwriter 13y ago
> Can't software exist for individual early adopters to sell their coin in exchange for fiat at market values without a centralized exchange? As I see it, the tricky bit without an exchange is (1) establishing a "market price" in the first place, and (2) coordinating the fiat side of the transaction with the cryptocurrency side (the same problem exists between two different cryptocurrencies with different networks) so that the two either succeed or fail together.

corresation 13y ago

bitstamp are professional while mtgox were amateur cowboys with no support. This is all so clear now, it seems. Further, Bitstamp was bitten by exactly the same bug (the malleability bug which was apparently what demonstrated Gox's purported cluelessness, and which I highly doubt was the cause of MtGox's apparent failure). Unless there was an independent audit by a third party, why should you trust that they won't fall victim to exactly the same issue?

nullc 13y ago
> Bitstamp was bitten by exactly the same bug (the malleability bug This is not factually correct. Bitstamp and MTGox's issues were unrelated, and the transactions that caused problems for Bitstamp were never seen on the network prior to a couple hours before MTGox's press release (and in volume, until after it).
- corresation 13y ago
  Bitstamp and MTGox's issues were unrelated In both cases there was an issue with the service having transaction issues due to the malleability issue. Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated? Now supposedly Gox was robbed (over months) using this exploit, but that simply makes no sense at all, and is people grasping, in the absence of anything else. It seems more likely that someone got the private keys on holdings wallets, whether insider or hacker.
  - nullc 13y ago
    > Bitstamp suspended operations to fix the issue. How can you possibly say they are unrelated? Because they were unrelated. Bitstamp was spending its own unconfirmed change, and those spends got hung when the change was mutated by the attacker— with an attack that didn't exist while MTGox was processing withdraws. MTGox happened to never spend any coins that weren't at least 6 deep in the blockchain, even it's own change. > and is people grasping, in the absence of anything else It's actually MTGox's own claims. Their actual issues in this space were because they reissued payments without conflicting the original payment— allowing both to go through. No one else, as far as I can find, was performing reissues at all— much less in such an unsafe manner.