Bitcoin exchange Mt. Gox disappears in blow to virtual currency

[Jesus Malverde]

Source: Reuters

Mt. Gox, once the world's biggest bitcoin exchange, looked to have essentially disappeared on Tuesday, with its website down, its founder unaccounted for and a Tokyo office empty bar a handful of protesters saying they had lost money investing in the virtual currency.

The digital marketplace operator, which began as a venue for trading cards, had surged to the top of the bitcoin world, but critics - from rival exchanges to burned investors - said Mt. Gox had long been lax over its security.

It was not clear what has become of the exchange, which this month halted withdrawals indefinitely after detecting "unusual activity." A global bitcoin organization referred to the exchange's "exit," while angry investors questioned whether it was still solvent.

A document circulating on the internet, and purporting to be a crisis plan for the exchange, said more than 744,000 bitcoins were "missing due to malleability-related theft", and noted Mt. Gox had $174 million in liabilities against $32.75 million in assets. It was not possible to verify the document or the exchange's financial situation.

Read more: http://www.reuters.com/article/2014/02/25/us-mtgox-website-idUSBREA1O07920140225

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The Mt. Gox website was originally founded by Jed McCaleb as an online exchange for buying and selling Magic: The Gathering cards, a popular trading card game. Its name was an acronym of Magic: The Gathering Online eXchange. McCaleb changed the site to a Bitcoin exchange, and as it began to take off in 2011, he sold it to Mark Karpeles. Under Karpeles' ownership, the site grew to handle 70% of the world's bitcoin trades by April 2013.

[7962]

1. Who didnt see something like this coming? Unregulated currency? Really?

We have enough problems with people scamming the regulated currency. I've said ever since Bitcoin started that it was a fad waiting for a disaster.

[tridim]

3. Every naive libertarian bitcoin buyer in the world.

The people at the top of the pyramid are cashing in now, and there is no legal recourse for anyone at the bottom.

Scam accomplished.

[tatum37]

4. How is the US dollar any different?

The only difference is that the government can always print up more dollars. But the eventual consequence of this is hyperinflation, which can impoverish dollar holders as much as bitcoin holders.

No, I am not libertarian.

[tridim]

5. For starters, the dollar wasn't set up as a pyramid scheme.

And is backed by FDIC and the entire planet.

Bitcoins DON'T EVEN EXIST.

[tatum37]

6. But that's what it has become.

And the FDIC? That's the Sticker Principle. You put a sticker that says FDIC on the bank window to create the illusion of safety. But if there were a run on the banks, the US would have to print up huge amounts of currency to meet its FDIC obligation. That would create hyperinflation. Your "insured" dollars would be worth nothing.

[Veilex]

8. Sorry but...

Bitcoin and the Dollar aren't even in the same league. There is no comparison.
The dollar is the currency of international trade for a reason.
If you're unable to figure out that reason, then you probably bought into bitcoin.

[tatum37]

14. Your apology is accepted.

And deserved. Your post is hopelessly vague, and consists of unargued assertions, e.g., "there is no comparison." Well, I just compared them. Both of them float up and down in accordance with the law of supply and demand. Why is that comparison impossible?

And no, contrary to your presumptuous and offensive comment, I have never owned or sold or borrowed or dealt with a bitcoin in any way.

[Veilex]

23. Congrats! You weren't taken in by the Bitcoin scam!

"How is the US dollar any different?
The only difference is that the government can always print up more dollars. But the eventual consequence of this is hyperinflation, which can impoverish dollar holders as much as bitcoin holders."

"unargued assertions" eh? I would recommend you re-educate yourself as to what exactly an argument or an assertion are...
Or perhaps you've chosen to define them for yourself. You seem to think you get to characterize the discussion as you see fit. You don't. Regardless, you've made statements on a board that is all about making statements and having them challenged. You seem a bit thin skinned if you were insulted by my exceptionally mild retort... and if that is indeed the case, I would recommend to keep your comments to a minimum.

[uncle ray]

9. bitcoins are constantly being "printed".

regardless of demand, the supply is increasing daily, and the demand now tanking. i'd hurry up and invest my bitcoins in something tangible, like Amway inventory.

[AverageMe]

10. Any Currency (medium of exchange - money) is only as good as the confidence people have in it

that includes gold and silver. None of these have any value in and of themselves. Gold and Silver had value in ancient times because of their decorative uses. They were easier to carry around then sacks of grain, and then early governments (for example Roman) said they were money. The only things that have value in and of themselves is food and water, labor, and land (which can grow food). Everything else has a value only to the extent our minds give it.

[Major Nikon]

18. You actually have it exactly backwards

If the value of the dollar sinks significantly, the Federal Reserve is obligated to buy dollars back in order to decrease inflation which is in their (and your) interest. The Federal Reserve is also the well of our monetary system which can and does regulate supply to prevent hyperinflation. It's also impossible for dollars to be "worth nothing" because if nothing else you can always pay your taxes with them.

[tatum37]

19. You have it upside down!

What do you think the Fed buys dollars with? With money it orders the Treasury Department to create. If enough dollars are created, the value falls in accordance with the laws of supply and demand.

Then dollars would not be "worth nothing" because we could still pay our taxes with them? Then I suppose Weimar marks were not worth nothing when it took a wheelbarrow full of them to buy a loaf of bread. If you want to strain at a gnat, okay!

[Major Nikon]

20. "With money it orders the Treasury Department to create."

False.

The Fed routinely buys and sells government securities which increases or reduces the money supply in circulation. The hyperinflation of the Weimar mark was caused by Germany printing marks to buy foreign currency, not because Germany was printing marks to buy more marks.

[Major Nikon]

17. "the eventual consequence of this is hyperinflation"

Simplistic and wrong, but it is something many libertarians say and believe.

[tanyev]

2. I guess Ron Paul will have to keep looking for something else to destroy the dollar.

[rickford66]

7. I await John Stossel's column.

He seemed to be in love with vapor dollars.

[7962]

21. Yes, you're right. No controls, ya know? And this is why there needs to be SOME.

[Blue_Tires]

12. What is "malleability-related theft"?

So this thing was just a Ponzi scheme all along??

[alcibiades_mystery]

13. A techno-fool and his (REAL) money are soon parted

[former9thward]

15. I guess the Post Office will not get to sell Bitcoins afterall.

Just this month they wanted to start selling them.....

http://www.bloomberg.com/news/2014-02-07/could-bitcoin-be-answer-for-profit-starved-post-office-.html

[quadrature]

16. Dollar-oriented businesses fail all the time...nt

[WhiteTara]

22. Oops. nt