
The troubled history of the Bitcoin exchange MtGox - nilssonanders
https://anders.io/the-troublesome-history-of-the-bitcoin-exchange-mtgox/
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tmikaeld
This was the first time i really understood the problem with this "bug" that
mtgox and bitstamp is having - very well written!

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kordless
Mt. Gox and other crypto markets need to switch to using a common, Open
Sourced solution. Their use of proprietary software represents a threat to the
entire Bitcoin ecosystem.

There's nothing wrong with them keeping a proprietary ledger of accounts, but
attaching their crap code to the network is a crime of epic proportions.
Hopefully Ethereum will help with this.

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skwirl
Your unregulated financial institutions fail to take basic security measures
to protect consumers, they frequently halt withdrawals without warning, your
uninsured deposits are sucked into the void, your speculative 'currency'
experiences extreme daily deflation and inflation...

Better blame proprietary software. Whatever you do, don't question your
assumptions. And under no circumstances should you think about the fact that
fiat banks in the US all use proprietary software and rarely experience
serious problems (and when they do, consumers' deposits are insured up to a
large amount).

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SilasX
I heard of a cool tech called the dollar so I figured, what the heck, I'll
give it a try.

Turns out they try to make you spend it by continually inflating the supply of
them out there with no end. In order to keep your head above water, you have
to put in a "bank".

Fine, it compensates you for the loss of purchasing power, so no biggie,
right? Wrong. They actually _lend out the dollars_ that are supposed to be in
your account so when you come to get your dollars out, they might not even be
there!

Now, they claim to have this handled, but it's kind of a hacky solution:
supposedly what happens is that they'll go to a head honcho and get a
temporary loan to be able to pay you, but they only give this privilege those
that can get the political connections.

They also have have this system where you money is "insured" so that even if
they can't get a loan "your dollars are safe, you'll still be able to get them
out!" Kludgy, but it should work, right? Well, it turns out the insurance fund
couldn't actually handle everyone pulling their money back out!

So, yeah, kind of hip, but I don't think it can catch on as a serious model,
especially once auditors and whatnot get involved.

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nerfhammer
Amount of losses due to depositary institution failure since 1934:

$0.

This is a rather good record compared to bitcoin.

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Eliezer
Whaaa? Deposits over $100K (now $250K) were uninsured.

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Guvante
They guarantee up to that amount but so far have been covering the full amount
due to the negligible difference overall IIRC.

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j_s
So... anyone willing to learn enough about BitCoin to build something to find
all the "fixed" transactions? It shouldn't take much analysis to determine
whether or not MtGox has been drained.

All these articles written about what happened but no one able to just look at
the blockchain and give hard numbers.

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lhc-
Do we actually have an exhaustive list of wallets controlled by Mt Gox though?
That would seem like difficult to obtain and likely proprietary info they
would not want to reveal.

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sscalia
I still cannot believe anyone has any "real" money tied up in something like
MtGox. Disturbing, stunning.

~~~
waterlesscloud
In other news that may also surprise you, there are people who put millions of
dollars into companies that don't even have working products yet.

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rayiner
A great example of the difference between investment and speculation. Pouring
money into a company without a product helps fund development of that product.

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waterlesscloud
People buying shares on a secondary market aren't really helping fund product
development, at least not in any direct way.

But you'll still see folks putting large sums of money into something like a
small biotech company that doesn't have a working product yet.

It's speculation, of course, but that's the point. People speculate all the
time, some of them with large sums of money. Shouldn't be surprising news.

