Bitcoin Blows Up

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AWvsCBsteeeerike3
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Re: Bitcoin Blows Up

Post by AWvsCBsteeeerike3 »

Transmogrified Tiger wrote:Mt. Gox is/was an exchange for Bitcoin, where you could also store Bitcoin in an online wallet. It was not the only exchange by any stretch, but it was the biggest. This has been something that's been brewing for several weeks, Mt. Gox Bitcoin in the last couple days was trading around $100-$150 while the market value was and remains at least $500(it was closer to $800-$1000 before this ordeal), so the risk of Mt. Gox going belly up has been priced in for a while. Definitely an object lesson in some of the pitfalls of Bitcoin, but as best I can tell, I don't think there's going to be a seismic shift because of last night's events. While the worst case scenario, people have been prepping themselves for that worst-case scenario for a little while now.
MAkes sense. Thanks.

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pioneer98
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Re: Bitcoin Blows Up

Post by pioneer98 »

Today I learned that "Mt. Gox" stands for "Magic the Gathering Online Exchange". This is really, actually what it stood for.

Hard to imagine a currency exchange founded on the bedrock principles laid out in Magic the Gathering went belly up.

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pioneer98
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Re: Bitcoin Blows Up

Post by pioneer98 »

I don't know a ton about it but I have been following Bitcoin a little.

It seems to me that the main reason to be concerned about the Mt. Gox thing is they don't really know all the underlying reasons why it failed. There is speculation there was either hackers and/or theft going on somewhere within the exchange. And since Mt. Gox was the biggest, the concerns are about how easily something like that could happen at the other exchanges. I don't know how they will ever totally get past this trust issue. We have ways of dealing with credit cards that get compromised and things like that. If a crypto-currency exchange gets compromised, it's pretty much done. It doesn't have the backing of any law enforcement or an FDIC or rules or anything.

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sighyoung
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Re: Bitcoin Blows Up

Post by sighyoung »

There's speculation that someone may be trying to buy Mt. Gox: http://www.washingtonpost.com/blogs/the ... ought-out/

Meanwhile, institutional investors and banks are interested in setting up their own exchange: http://www.nytimes.com/2014/02/25/busin ... .html?_r=0

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Transmogrified Tiger
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Re: Bitcoin Blows Up

Post by Transmogrified Tiger »

pioneer98 wrote:I don't know a ton about it but I have been following Bitcoin a little.

It seems to me that the main reason to be concerned about the Mt. Gox thing is they don't really know all the underlying reasons why it failed. There is speculation there was either hackers and/or theft going on somewhere within the exchange. And since Mt. Gox was the biggest, the concerns are about how easily something like that could happen at the other exchanges. I don't know how they will ever totally get past this trust issue. We have ways of dealing with credit cards that get compromised and things like that. If a crypto-currency exchange gets compromised, it's pretty much done. It doesn't have the backing of any law enforcement or an FDIC or rules or anything.
I have only a passing interest in Bitcoin, but from what I can gather(which mostly consists of reading Hacker News), the very likely reason for Mt. Gox's failure is an issue with what's called "transaction malleability", which has been dealt with more at the protocol level to avoid an exchange screwing it up in the future. It does expose the risk of dealing with Bitcoin though. There's obviously no FDIC insurance just like there's no FDIC insurance in your brokerage account, and depending on the details some anti-fraud stuff may apply, but there's a much higher likelihood of stuff going poof than your average penny stock, especially at the current valuation. More than anything though, I think it's more an object lesson in Bitcoin storage. Holding them in an online wallet is convenient for day-trading in the stuff, but cold storage that's offline is the only foolproof way to keep your Bitcoin secure. Of course, even that has its pitfalls. I know a guy who got 40 BTC for selling some electronics a few years ago, he put it on a flash drive that got lost. Now that missing flash drive is as valuable as the down payment on a house.

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AdmiralKird
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Re: Bitcoin Blows Up

Post by AdmiralKird »

I've looked a bit into bitcoin, and its just incredibly sketchy considering its creator is an alias whose whereabouts are unknown. There is legitimacy behind the crytocurrency concept, but the idea that the 'money' is only backed by the perception of others who believe it holds value creates an atmosphere that raises massive red flags.

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sighyoung
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Re: Bitcoin Blows Up

Post by sighyoung »

Here's an interesting discussion of Bitcoin by Felix Salmon: https://medium.com/money-banking/2b5ef79482cb

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Mary1966
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Re: Bitcoin Blows Up

Post by Mary1966 »

Michael wrote:I've put my entire networth in to Dogecoin.

[/youtube]


To the moon!
I thought this was a joke, but Dogecoin actually exists (I didn't bother to click on the link, just watched the video). I found that out from this article:

http://www.cnn.com/2014/02/26/tech/inno ... =allsearch
The Dogecoin started off as a penniless Internet joke. But Matt Thompson plans on selling his vacation home for this meme-inspired currency.

The 27-year-old entrepreneur has been selling games and gadgets over the Internet for years, but nothing as big as his Wisconsin vacation home, which he is offering for 100 million Dogecoins.
Cryptocurrencies are not something that I would get into, but the idea is a fascinating one.

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Mary1966
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Re: Bitcoin Blows Up

Post by Mary1966 »

http://www.foxnews.com/world/2014/02/28 ... latestnews
The Mt. Gox bitcoin exchange in Tokyo filed for bankruptcy protection Friday and its chief executive said 850,000 bitcoins, worth several hundred million dollars, are unaccounted for.

The exchange's CEO Mark Karpeles appeared before Japanese TV news cameras, bowing deeply for several minutes.

He said a weakness in the exchange's systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company's own bitcoins. That would amount to about $425 million at recent prices.
$425 million goes boom. Wow.

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heyzeus
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Re: Bitcoin Blows Up

Post by heyzeus »

So much bankruptcy. Wow, irony. Libertarian currency fetishests run for government protection from creditors and customers they defrauded. Wow. Much hypocrisy.

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