Otherwise, I really hope Gox dies, in a darwinian business sense. Forest fires destroy big trees but makes way for new shoots.
http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s...
"But too bad."
I stupidly had my life's savings in bitcoin, and when the
price started to fall, I converted to dollars and watched
the price plummet. I lost $357,000.
Harsh words, but you can't reason yourself out of such a bad decision as that he made. He should have used cold storage, period.
One person lost 1998 btc. That was anywhere from $500,000 to a million bucks.
OK, you could watch the currency markets do this for real money all day but most of the time they trade on fundamentals. Watching a currency crisis unfold is a lot more interesting.
Unrelated: I see redditors are handing out 1:1 sympathy tips in DogeCoin.
The exchange was a cobbled-together technical-mess that was originally supposed to be used for trading cards. They made a quick pivot and tried to wing it as a financial institution.
Hopefully the BTC and finance community learn from this disaster. There is going to be a huge market for a highly-regulated exchange run by banks and investment houses in the near future.
Wow.
http://www.reddit.com/r/Bitcoin/comments/1yscsq/mtgox_lets_t...
(Or to be more accurately, entries in a data base.)
I'm not completely clear on the details (likely no one is), but it seems to me that the unethical players stole a lot of money and got away scot free. Lots of innocent people lost money, and yes mtgox, an incompetent player, will get shaken out. That doesn't exactly seem like a stellar outcome.
given the alleged value of the stolen coins are in the range of 0.5B USD it's not unreasonable to suspect that some government capacity would investigate this.
If the stolen coins can indeed be detected - how would they go about extracting the value? Seems like a large scale, risky money laundry effort would be needed.
where does all the 'real' money go?
i don't understand how 6% of bitcoin can disappear when one of the supposed selling points is that you can verify all the transactions.
Value is perceived, and value can evaporate.
If bitcoin completely fails, the value evaporates.
It's a bit like buying a house in Detroit a decade ago for a hefty price, and trying to sell it today. Your money wasn't eaten by the house, no-one ran away with it, but it's now worth significantly less than it was and effectively the value just disappeared.
(PS: And I hope you bought the house with cash you could afford to lose rather than debt you now owe someone.)
Now, you can certainly say that the money was spent on things like electricity, or GPU hardware, that has little/no value now. But thats irrelevant - the money most certainly spent, rather than "evaporate" into thin air.
And then the biggie: people who sold before the pump-and-dump hit "dump" would still have dollars.
Who loses? People holding hardware which 90%+ depreciates, GPs of funds investing in bitcoin companies, and a whole lot of people who bought into the pump-and-dump at or after "dump."
The bitcoins did not disappear. They are on the blockchain just somebody used a bug in Gox's custom php wallet to pillage all the coins for themselves. The official client bitcoind/bitcoin-qt is not affected, and none of the other major sites like blockchain.info or localbitcoins who keep large escrows were affected, just Gox and a drug dealing site who also rolled their own wallet and lost everybody's money.
If you want to work with the raw bitcoin protocol you should pay a Bitcoin developer to help you, then these problems would be avoided. Karpales was making 6 million per month at one point, yet did everything himself (badly). You don't even need to pay them, log into bitcointalk.org and post in the dev base your custom implementation and ask them is this fail y/n?
Secondly: the "real money" went at the time the BTC were bought (if they were bought and not mined). If they were mined, then the "real money" went to pay mining expenses: plant and resources, which is to say, processors and electricity.
What would have vanished should BTC lose its acceptance as a currency and value store is the market in which bitcoin are traded and valued, and any significant price within that market. More specifically, if the offered price for BTC falls below the present mining costs, it's likely that few will be created, though there might exist some sort of zombie market for what bitcoin already exist, likely at a small fraction of recent prices. This is what has happened with other currency and coin whose value has disappeared. At best you have the underlying worth in specie (or CPU cycles for BTC).
The question about where the coin went and whether or not they're of any use to the present holder is a good one, and my understanding of bitcoin and transaction logs isn't sufficient to answer it. But if the original coin holder could track the coins they'd at least be able to see who's transacting them. I'm not sure that this would be sufficient to have them recoverable.
Seems another useful feature might be to be able to repudiate a coin: if someone steals it, publish a revocation key. Though of course, this would have to not be exploitable in legitimate, authorized, transactions, and you'd then have to be able to distinguish authorized from unauthorized transactions.
The value of Bitcoins is determined by what other people are willing to pay for them, which is determined by their confidence people will exchange them for tangible goods or services, or other forms of money, in the future.
Total failure means people lose confidence in the system, due to technical flaws, regulation, competition, etc.
The value would approach $0/bitcoin, though I don't think it would reach zero for a long long time. I'd happily pay $10 for a million bitcoins just for the hell of it.
The didn't disappear, they were stolen. Someone else has them.
(Coins can disappear if the owner forgets the password. They are still there, just no one can ever spend them.)
I don't know where you get the notion that Bitcoin is an "experiment". It's not. This is less knowledge of Bitcoin than it is knowledge of economic theory and what the words "money" and "currency" mean.
> what happens if it completely fails? what does a total failure scenario even look like, in terms of symptoms?
The coin disappears because it was stolen, or possibly deleted (less likely). It's not that different from someone taking cash out of your wallet.
Luckily I have no money in BTC at all - other than 2k for mining equipment(scrypt) - and the coins earned from my small operation is only about 1 BTC so far -- which I'm planning on holding onto till it rallies, WHICH it will (too much investment money in too many companies) for it not to.
Lots of companies have spent a lot of money to integrate it, and there will be a vacuum for a few weeks, maybe even months, but trust will come back into the market and it'll grow...
One thing I'd like to see is some sort of P2P exchange service where exchanges don't happen on any network --ie all funds remain in wallet until time of exchange, -- of course this wouldn't work for usd necessarily, but for coin to coin exchanges it would, unless it was also tied into some sort of site like coinbase where they can store a fiat currency value like a bank for deposit at a later date.
That sounds like bubble talk to me.
It was news to me that the creator of the bitcoin technology is anonymous. Heard the name several times before, but never knew it was a pseudonym for an anonymous person or group of persons.
I should add that I only plan to spend perhaps 1% of my money available for saving/investing in bitcoin. I think it's a good investment but the risk is too high to risk more.
I hope the people who lost bitcoin learn not to keep them anywhere but in their own wallets.
Certainly you can keep your own coins essentially 100% safe relatively easily with encryption and backups, but most people wouldn't even think to try, let alone have the necessary knowledge to do so.
I also think that most (though apparently not all) of the people with millions of USD worth of bitcoins acquired them at low cost so in real terms their loss was mostly on paper. The started at $10k, it ballooned to $10m, and now it is zero. Did they lose $10m or $10k?