
Mt. Gox Halts Bitcoin Withdrawals, Price Drop Follows - zende
http://www.coindesk.com/mt-gox-halts-bitcoin-withdrawals-price-drop/
======
davedx
Interesting comment on Reddit:

"I had a job interview with MtGox a couple of weeks ago for a frontend
developer position. After talking about their technical environment I declined
the position. Contemplated publicizing my story, but I have zero proof that
the interview took place. But fuck me is their environment fucked up. Either
way, I have been recommending to my friends to move any BTC away from Gox as
soon as possible, and regret not bringing this advice into the open. I'm a
Tokyoite, so if you want to talk to me about the job Interview, or just drink
a beer, send me a DM."

"I was told that up until a few weeks [at time of the interview] ago, there
was hardly any development environment to test changes. Most changes were done
straight on the production environment. Typing this made me throw up in my
mouth. The guy who interviewed me was very friendly, but I felt like a
psychiatrist more than a job candidate. The dude went on about how shitty the
atmosphere is at the offices, and what he told me about Mark seems to be spot
on from what OP has said. Interview guy, if you read this, sorry yo."

~~~
3pt14159
I believe it.

I've talked to a backend developer at Coinbase, he said their codebase is a
mess and that he wouldn't hold any in their system. Also I submitted:
[https://news.ycombinator.com/item?id=7169114](https://news.ycombinator.com/item?id=7169114)
a couple of days ago based on what I found on Reddit. And this is Coinbase,
the _good_ guy. MtGox has always been a clusterfuck.

This feels like the internet used to feel like. Back when you just used to
assume that a credit card transaction wouldn't go through. Why? "Because
internet". Bitcoin is so young and immature.

~~~
stcredzero
_I 've talked to a backend developer at Coinbase, he said their codebase is a
mess and that he wouldn't hold any._

This, and a few other things I've witnessed firsthand makes me wonder if
Y-Combinator doesn't need better technical intelligence or some form of
auditing. It could be done in a non-intrusive spirit of openness. Basically
position it as a "show and tell" focused on technical process. Just have
companies show what they're proud of, and if they so choose, show what they're
ashamed of/what extent of technical debt they're in.

~~~
3pt14159
I think that YC embraces technical debt. Exponential market growth means you
can hire developers to re-write the problems in a couple years.

~~~
enraged_camel
Unless, of course, you are a company like Mt Gox and your technical debt is so
huge that it sinks you.

This is not a dig at Coinbase. I'm just suggesting that endorsing technical
debt in the finance sector may not be smart.

~~~
cookiecaper
There are many types of technical debt. It's something that accumulates
organically in any real world project, because the real world doesn't care if
your code is a paragon of programming excellence or not. It's expected, and
simply part of the process, to develop technical indebtedness. The important
part is controlling that indebtedness so that it doesn't cause major
disruptions -- this usually means periodically cleaning up old debts and
ensuring you have a robust system of monitors and failsafes. In a niche like
finance, you certainly have to be more aggressive to ensure that no serious
breakages or irrevocable indebtedness make their way into critical transaction
code.

~~~
stcredzero
_It 's something that accumulates organically in any real world project,
because the real world doesn't care if your code is a paragon of programming
excellence or not._

Which is short-sighted, really. Technical debt has somewhat the same
properties as financial debt, which is why public companies have to disclose
monetary debt and have plans for dealing with it. It's high time that the
culture caught up to technical reality and started to treat technical debt in
the same way. This is especially true for finance!

In a way you are basically saying the same thing, but the warning sign to note
is your observation that "the real world doesn't care." It would be insane for
the real world to not care about a company's financials, particularly its
debt. It's just as insane with technical debt.

~~~
cookiecaper
Yes, I agree to an extent. I guess the problem is that quantification of
technical debt is not so straightforward as financial debt.

When I say the "real world doesn't care", I don't necessarily mean that as a
bad thing. The realities of shipping a product urge companies to make
compromises. Like financial debt, technical debt is a useful tool, as long as
it's used responsibly and kept under control.

~~~
stcredzero
Yes, but when the real world doesn't care so much about financial debt, things
start failing. Witness 2008. This happens with tech debt too, it's just not
well understood by the mainstream. I'm pretty sure when Alamo got acquired, it
was in part due to their crappy software making them less convenient to visit
and uncompetitive. I think it was them. I remember years ago one car rental
company's agent terminals were so bad it just took twice as long to get
through their line.

------
minimax
Consider this a reminder that while Bitcoin may be an interesting
technological achievement, as a tradable asset it is still basically a toy.
Crappy exchange technology combined with low liquidity is a perfect recipe for
this kind of volatility.

~~~
koliber
While I am in no position to predict the future of bitcoins, all new markets
have these problems. At an early point in their history, stocks also had low
liquidity and crappy technology. Both of these conditions will improve as an
asset becomes more popular. It is a chicken-and-egg problem.

~~~
dalke
I think your sentence has too much of a tone of inevitability. "... will
improve as an asset ..." should surely be "will improve _if_ an asset ..." or
perhaps "... _in order for_ ...".

There's plenty of new markets which failed to take off, and died after a few
years of use. Confederate dollars aren't quite the useful currency they once
were, as an obvious example.

Otherwise it cuts too close to survivorship bias: is there a popular asset
where the market has "low liquidity and crappy technology"?

~~~
ForHackernews
> is there a popular asset where the market has "low liquidity and crappy
> technology"?

Yes, real estate.

~~~
dalke
Point taken. Speaking of liquidity, water rights are likely another, at least
in the southwest where the relevant laws date back to Spanish colonization.

------
Xdes
I think all of us veteran Bitcoin users saw this coming for awhile now. It's
all the new users (<1 year) that are affected. They tend to disregard our
advice to steer clear of Mt. Gox (and holding their BTC in an exchange like a
bank). They're probably the same people who keep supporting scammers like BFL.

~~~
yebyen
I bought some Jalapeños from BFL after my January order was not shipped until
August, in the Black Friday sale.

The sale was advertised as "units in stock, ready for immediate delivery"

When they came (something like a full month later) they were approximately
double the spec of the devices I thought I had ordered, but still for the same
price. Thanks, I guess?

I can't say if they're shipping any faster now, but if the trend of decreasing
wait times has continued, I'd expect that by now, they'll be competition for
Amazon's rumored new "ship before you order" practices.

Honestly for the new customers, if their ASIC parts were actually delivered in
less than two weeks, I would have to say you're not getting the full BFL
experience anymore, and you should probably ask for a refund.

I will probably not order from them again.

~~~
nwh
The BFL gear is cute and all, but there's a simple fact with selling Bitcoin
mining hardware that is probably never going to be overcome. Why would you
sell something you could make profit on if you kept it for yourself? This is
pretty much the reason why we have ASICminer, KNCminer and Bitfury all either
running or building mammoth sized facilities of their own.

I particularly liked this juxtaposition on their store —
[http://i.imgur.com/uZVKRBX.png](http://i.imgur.com/uZVKRBX.png)

~~~
icoder
Well, just as with disk storage, scaling up doesn't mean things get cheaper
per unit, because you'll have to pay for infrastructure that you take for
granted at low scale (cooling, storage, security, power, network, etc). Many
customers mining at different locations could therefore be more profitable as
a whole than one company doing all the mining, especially since many hobbyists
don't count their hours like a company has to.

Also, BFL will benefit from the share of users that will not use their
equipment to the max for whatever reason and they may not have the equity
required to do the upfront hardware investment.

~~~
nwh
Completely different situations. Actually building an ASIC design is
expensive, has a lot of cost in research and development, and the batch sizes
are in the millions of dollars. You do benefit from scale of supply in the
chips themselves, and you don't need to worry about pretty consumer cases and
electrical safety certifications. Once you've paid off the R&D cost you're
basically in the green (bitfury sold his up until this point, then abruptly
stopped).

------
Torn
> As to get a better look at the process the system needs to be in a static
> state.

The fact they can't spin up a new MtGox environment with cloned data stores is
troubling.

~~~
willis77
I also hope their technical competency beats their writing competency.

------
plg
I'm not bitter that when bitcoin was ~ $1/btc I almost bought 1,000 btc ... no
not bitter at all

:|

~~~
hnnewguy
> _I almost bought 1,000 btc_

Are you just as bitter that you missed Apple, Microsoft, Tesla, Priceline,
Intuitive Surgical or CNR?

Point being, these opportunities are everywhere, always. You're surrounded by
them right now, they're just not obvious. But neither was BitCoin. And with
the above you're actually buying into a real company, rather than speculating
on a price change.

~~~
if_by_whisky
Buying into a real company is not speculating on a price change?

~~~
unclebucknasty
Of course, all investments involve some degree of speculation.

But, to be fair I think your question is a bit pedantic. I think your parent
is saying that with those companies, there is some way to impute value vis-a-
vis products, management, history, etc. That calculus would then inform
opinions on resulting price movements.

OTOH, when Bitcoin was at $1, forming an opinion on its price movement was
almost pure speculation.

------
pistle
Is this the technical way of shutting your doors to stop the run on the bank?

------
lectrick
Buy when there's blood in the streets (assuming the fundamentals are still
good, which it looks like they are...)

[http://www.bitcoinpulse.com/](http://www.bitcoinpulse.com/)

~~~
mason55
Outside of Mt Gox prices haven't really changed since yesterday. The only
difference is that Mt Gox's $100 premium is gone now.

~~~
aestra
If I recall correctly, prices have dropped around $30 on coinbase in about 24
hours.

~~~
commandar
Coinbase has already recovered some today. It had dipped below $700 when I
woke up this morning.

------
aw3c2
Oh no, my college fund investment!

------
JonSkeptic
But Dogecoin is doing well.

~~~
iamjustin
It really isn't, it's down to around 0.12 cents per doge. When Bitcoin goes
down, it usually drags the rest down with it.

------
tibbon
Is it just me, or does MTGox seem to be the BTC site that has the most
problems? Maybe its just because of their size, but in comparison Coinbase and
Blockchain have few problems.

------
foobarqux
MtGox badly needs a financial audit. It's easy to fund operations from
deposits and, by having limited withdrawals, hide the fact that you are
insolvent.

~~~
zende
This is exactly why regulations exist. MtGox should need to register as a
Money Service Business (MSB) in the US and as a Money Transmitter in each
state that they support. That needs to happen even if they're not a US
company. The same applies to the EU, Australia, Canada, and many other
countries that have regulations around this kind of activity.

The purpose of the regulations are to protect consumers for companies that are
either malicious or incompetent.

The problem is that the licensing process is expensive, painful, and long.
There should be better ways. Nonetheless, there's a reason why the exist.

------
patrickg_zill
Oddly funny, that the physical gold and silver buyer's mantra of "if you don't
hold it, you don't own it" would apply to BTC.

~~~
canvia
There are a lot of similarities. I see a lot of pump and dump terminology used
in discussions of both topics as well, such as:

If you buy only one single (bitcoin|oz of gold) now, one day you could be rich
beyond imagination!

The potential future price of (bicoin|gold) is over $100,000.

There are only xxx (bitcoin|oz of gold) produced per year so it must be scarce
and valuable!

I'm in (bitcoin|gold) for the long haul! Buy and hold! Keep on stacking!

The price of (bitcoin|gold) is manipulated downward. Buy now while it's cheap.

The global economy is going to crash soon! Buy (bitcoin|gold) now or you will
die when the crash happens!

------
kirk21
Ok, time to find another exchange. Considering
[http://www.coinnext.com](http://www.coinnext.com) and
[https://localbitcoins.com](https://localbitcoins.com) Other suggestions?

~~~
vtempest
Coinbase.com is a great one, and they recently received venture funding

~~~
nullc
Coinbase recently imposed a kind of ludicrous $3000 a day outbound limit on
accounts that had previously been limited to 50 BTC/day.

Removing the limit involves buying coin from them, waiting 30 days, and
solving some seemingly impossible credit report based identity quiz (some
people report passing after 10 tries, you're limited to one try per 24 hours).

~~~
politician
We did that back in the online poker gambling days. The casinos would throttle
USD withdrawals, so that the players would be forced to wait and end up losing
their chips by playing more. Physical casinos do this by attaching hotels next
to the slots. This sounds similar.

------
headgsaket
2 bad news day in a row, and BTC is sensibly at the same price level... This
resilience is making me more skeptical of a upcoming crash event. Price
stability is sinequanone for acceptance as a currency.

~~~
Gracana
Well to be fair, the people most affected by this news can't do anything about
it.

------
Spooky23
Why does anyone deal with MtGox? Nothing but drama.

------
gabriel34
So, is this really a technological issue or a liquidity crisis at Mt. Gox?

~~~
quattrofan
It seems a technical issue, they are saying they won't process BTC
transactions not that they wont process fiat withdrawals, although those have
been slow for months anyway.

------
ck2
Why would the price drop when there are other exchanges open?

~~~
pbhjpbhj
MtGox is one of the biggest and most well known. As I understand each exchange
basically sets there own price - but if one exchange lowers there buy price
(they buy bitcoins for less dollars) then the others can do too?

This is great for MtGox, all buy transactions pending just lost a $100 of the
cost to fulfil. Surely then they wait for the bottom, initiate all
transactions possible.

Price rises and they can take in more dollars per bitcoin sold, speculating,
that may be all that enables them to actually deposit the amounts on the
transactions they "fulfilled" in order to make the price bounce.

Crazy business.

~~~
ck2
After some research (aka googling) I discover the price is not sinking because
of mtgox.

It is sinking because of Russia.

[https://news.ycombinator.com/item?id=7197173](https://news.ycombinator.com/item?id=7197173)

