

We are Mt. Gox: AMA - nico
http://www.reddit.com/r/Bitcoin/comments/1c7ahh/we_are_mt_gox_ama/

======
jack_trades
Talk about putting up a shingle and calling yourself an exchange.

The clamor from the crowd that they need to do better PR gets me chuckling the
most. They are fairly transparent about their lack of technical expertise,
hinting at major issues in their understanding or seriousness of what they are
doing.

When one noisy person tells you how to do your job and you know they're wrong,
whatever. Brush it off.

When a fistful of redditors are telling you 15 different ways that you should
be doing your job and it's pretty easy to show that they understand the
problem domain and issues better than the team... that's a big problem.

I guess people hope MtGoxs new trading platform scales better, but that is not
the sort of thought/wonder to be having when you are about to press submit on
thousands in trades.

Bitcoin. Currency like kids and potato cannons. What could go wrong? Fire it
up!

~~~
ramblerman
"Bitcoin. Currency like kids and potato cannons. What could go wrong? Fire it
up!"

You highlight the weakness in MtGox and then by analogy suggest the whole
platform is similary amateuristic.

the bitcoin protocol itself is solid, tested and has some very smart people
working on it.

------
vy8vWJlco
Isn't the idea of a central exchange (which "Magic the Gathering online
exchange" is), where most of the trading occurs, a little antithetical to
notion of a distributed currency?

~~~
minimax
The problem is moving the counter currency around. I can zap you some bitcoins
without any problems, but it's much harder for you to zap me back some USD (or
EUR, JPY, whatever).

~~~
vy8vWJlco
Fair, the ForEx role will never go away, but it seems that MtGox has also
become a trading platform for the Bitcoins themselves, with the obvious
downside that it is susceptible to DDoS' like any centralized service. It
makes more sense for a P2P currency that this simply be done at the protocol
level with at most a custom client, but one that is still a full peer. The
problem I, and others, are seeing is that the blockchain is becoming huge and
will only get bigger, meaning only those with the resources to maintain it
will participate as full peers - hardly ideal for a distributed system since
it will inevitably require a certain amount of centralization to scale.

~~~
codeulike
_Fair, the ForEx role will never go away, but it seems that MtGox has also
become a trading platform for the Bitcoins themselves_

Wait, whats the difference between those two things? Converting bitcoins into
anything else _is_ ForEx.

~~~
vy8vWJlco
MtGox has become something of a speculative trading platform. While direct
exchange (cash in, cash out) will always be necessary (unless you are paid in
Bitcoins and live off of Bitcoins), I don't think MtGox is mostly being used
that way. Rather, MtGox is becoming synonymous with Bitcoins for traders, and
people want to use it like a bank (with all the problems that entails, and
Bitcoin was partially hoped to relieve). As such, Bitcoin is only as reliable
as MtGox. If People's main interaction with MtGox was buying Bitcoins for use
on real goods and services, then I would agree that it is just another
exchange, but people aren't using it like that. People buy BTC with USD one
day, and buy CAD with BTC the next, with every intention of going back through
the exchange and the Bitcoin currency again in order to cash out. MtGox has an
API, and in fact, you are right, that is precisely what a ForEx is used for...
I'm not knocking it, only pointing out that many of the problems people want
Bitcoin to solve are being recreated by re-imposing conventional institutional
roles. As long as there is more than one currency, people will need to
exchange them. Who am I to say Bitcoin "shouldn't" have a trading platform
other than to note that, IMHO, anyone who uses MtGox speculatively is relying
on it's centralization, with all that that entails. I think it's ultimately
just a matter of scale.

~~~
codeulike
_People buy BTC with USD one day, and buy CAD with BTC the next, with every
intention of going back through the exchange and the Bitcoin currency again in
order to cash out._

Are you sure they're doing that?? Bitcoins volatility would render it
pointless for Forex trading. (edit: by which I mean trading between two old
school currencies via bitcoin)

~~~
vy8vWJlco
I am taking it for granted that speculative trading is a pretty common, if not
the main activity on MtGox:

\- "Bitcoin day trading": <https://bitcointalk.org/index.php?topic=57169.0>

\- "Mt. Gox Temporarily Halts Bitcoin Trading to Allow the Market to Calm the
Hell Down": [http://betabeat.com/2013/04/mt-gox-halts-trading-
temporarily...](http://betabeat.com/2013/04/mt-gox-halts-trading-temporarily/)

But I could be wrong.

~~~
codeulike
Oh yeah, people are swapping BitCoin for (old school) currency Y and then back
again like crazy.

I thought you meant people using Bitcoin to do arbitage between (old school)
currencies X and Y

I agree that speculation is harming bitcoin. It needs less volatility to be
truely useful. But then when a genuinely innovative currency/technology
suddenly gets a ton of press, I don't see how a spike could be avoided.

~~~
vy8vWJlco
_"I thought you meant people using Bitcoin to do arbitage between (old school)
currencies X and Y"_

That's precisely what I suspect (and can only guess at this point) that it is
being used for:

[http://bitcoinmagazine.com/btc-trader-bitcoin-arbitrage-
made...](http://bitcoinmagazine.com/btc-trader-bitcoin-arbitrage-made-easy/)

<http://lichtman.ca/is-bitcoin-arbitrage-feasible/>

<https://github.com/michaelcdillon/BitCoin-Arbitrage>

At the same time, MtGox also serves as an entrypoint for non-speculating users
and has effectively become the "Bitcoin bank." It's voluntary - people are
choosing to use MtGox, but in this regard MtGox's success seems to be a
Bitcoiner's weakness: a DDoS against MtGox can cut the value of a BTC (and
their lunch money) in half.

------
Mahn
It seems they were not _aware_ that AWS exists. They should really consider
hiring engineers specialized in scaling.

~~~
saosebastiao
The more fundamental problem is the lack of separation between their trading
engine and their website. While a website would be perfectly fine on AWS (and
likely the more significant part of their scaling problems), the trading
engine belongs on a very tightly controlled platform.

I don't have any confidence in their platform. It shouldn't take more than a
few domain experts to build a better platform...but for some reason its not
happening.

~~~
Mahn
> I don't have any confidence in their platform.

Neither should anyone, as evidenced by their track record. It's just sad that
it is this platform driving the price of the Bitcoin at the moment, and I'm
not sure how it speaks about the future of the currency.

------
paulhauggis
wow. After looking at all of the issues and the lack of answers from MtGox..I
don't think I'm going to be investing any money in this exchange any time
soon.

~~~
SpikedCola
No kidding - they appear to be focusing on answering question #1 and
completely avoiding #2 & #3. Does not instill confidence.

~~~
3pt14159
You guys need to understand that these guys are super Japanese, complete with
the culture of never wanting to show dishonor. If they were American I would
be much more suspicious, but they have consistently fixed the problems that
they have had and are desperate to hire western developers to move to Japan to
help the not only build the exchange, but expand the community's trust in
them.

~~~
illuminate
"You guys need to understand that these guys are super Japanese, complete with
the culture of never wanting to show dishonor."

Then why have a Reddit Q&A about their failures?

------
fnordfnordfnord
Huge opportunity here for a proper exchange / trading platform to be built.
There is obviously a demand for it.

~~~
minimax
1) Regulatory issues are a big question mark.

2) There isn't actually that much volume compared real electronic exchanges.
Just looking at the Mt Gox page from today it looks like $30MM USD worth of
bitcoins have been traded. Hard to make any real money off of that.

~~~
ProblemFactory
> 2) There isn't actually that much volume compared real electronic exchanges.
> Just looking at the Mt Gox page from today it looks like $30MM USD worth of
> bitcoins have been traded. Hard to make any real money off of that.

While it might have much less volume compared to a "real" exchange, MtGox fees
are 0.6% of each transaction. $180k daily revenue is certainly "real money"
for a startup.

------
nwh
The best piece of all comes from their answer about new servers.

> Upgrading computer systems means ordering more servers (2 weeks timeframe),
> setting up (1 day), load testing (2 weeks) and deployment (1 day). It's a
> process that can take up to one month in total.

~~~
codeulike
You've got to bear in mind that they're talking to reddit. I think thats a
fair description of why they can't upgrade at the drop of a hat. As they say
elsewhere in the AMA:

 _We are big in the bitcoin world, but compared to a Facebook or a Google or
even a bank we are too small and don't have access to their technology_

What would you have them do?

~~~
dragonwriter
> Cloud solutions are not meant for large scale operations such as trading
> systems

Arguably, _hosted_ cloud solutions aren't ideal for large scalable operations,
if you define "large scale" as in "someone with the scale of Amazon, Google,
etc. that can afford to run a private cloud."

But MtGox makes it pretty clear that they aren't on that scale. Their argument
seems to be simultaneously that they are both too "large scale" for hosted
cloud solutions and too small scale to be able to effectively address the
challenges they face in-house, which, if we accept it, seems to indicate that
they are at a scale that _cannot effectively operate_.

~~~
codeulike
Right. They couldn't effectively operate in the face of a huge trading spike
and a DDOS. Hence they're upgrading. But then they get stick for taking too
long to upgrade.

Conversely, if they spent $$$ on a bulletproof platform, they'd probably go
bust (as seems to have happened to other more technically proficient
exchanges)

The underlying problem is: people have too high expectations of what the
bitcoin world can cobble together at this point. Its being built by hackers,
not bankers.

~~~
dragonwriter
> Conversely, if they spent $$$ on a bulletproof platform, they'd probably go
> bust (as seems to have happened to other more technically proficient
> exchanges)

If that's true, it would seem to indicate that no one with the resources to
eat the cost of operating a reliable exchange through the expected growth
period of bitcoin has sufficient long-term confidence in bitcoin to underwrite
the growth-phase costs in order to reap the rewards once bitcoin is all grown
up.

> The underlying problem is: people have too high expectations of what the
> bitcoin world can cobble together at this point. Its being built by hackers,
> not bankers.

Expecting the main exchange for something that is promoted as a currency to
meet the reliability expectations of a currency exchange is not unreasonable.

~~~
codeulike
You're assuming that access to investment (VC funding or whatever) is a
perfectly efficient system. It clearly isn't.

------
xoail
It always bothered me to know that there is no other solution to DDos attacks
other than shutting down the systems and wait till it gets back to normal
load.

