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Bitcoin in trouble?
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Bitcoin in trouble?

jbilohjbiloh Administrator, Veteran

Within the last 24 hours the largest (I think?) exchange, Mt. Gox, closed up without notice and with the general consensus that they are no longer financially viable.

Start of a trend and the exposure of the inherent weakness in the unregulated digital currency era or just a one-off bad apple?

Thoughts?

«1

Comments

  • Mt. Gox was corrupt and it's closing is only a good thing.

    Or so they say.

  • nonubynonuby Member
    edited February 2014

    It's not really the start of a trend, but a continuation, first we had the mickey mouse php based bitcoin exchanges go kaput or get hacked and then the more serious/bigger players, it's pretty much a bimonthly occurrence, as I tweeted "right on schedule another bitcoin exchange goes kaput, who's next?"

  • No, Gox != Bitcoin.

  • Gox hasn't had a monopoly in BTC exchanging for a long while now -- which is a very good thing, as just demonstrated.

  • ricardoricardo Member
    edited February 2014

    Just reading mainstream news, there's rumour of a hack of 744K bitcoins from that exchange.

    Even if it isn't true, that's a very worthwhile hack for criminals coming in at $150 million dollars or so, though they'd probably get a lot less due to the selling pressure they'd put on the market.

    I don't know much about bitcoin, but it does seem like there needs to be more checks and balances.

  • jbilohjbiloh Administrator, Veteran

    I have to ask, does Bitcoin have any practical purpose right now? The amazing price action instability makes it nothing more than a cute idea currently.

    For the record, I like the idea of digital currency, but cannot ignore the reality of the situation.

    Thanked by 1chrisp
  • nonubynonuby Member
    edited February 2014

    @jbiloh said:
    I have to ask, does Bitcoin have any practical purpose right now? The amazing price action instability makes it nothing more than a cute idea currently.

    For the record, I like the idea of digital currency, but cannot ignore the reality of the situation.

    The concept behind Bitcoin has more potential than just currency, http://vint.sogeti.com/23172/

    The bigger picture is more exciting.. Think any service where currently trust is enforced through centralization (or networks of such)

  • Just seen this on BBC - bbc.co.uk/news/technology-26333661.

    Was only Sunday that I was looking into investing in some digital currency but this has really put me off now.

  • jbiloh said:

    I have to ask, does Bitcoin have any practical purpose right now?

    Currently bitcoin is used for speculation. It has massive potential for other uses though. You have to read how it works to understand that. But, yes, it is very volatile. It always has been.

    Thanked by 1Maximum_VPS
  • As a provider, we have found bitcoin to be an excellent payment method. The merchant fees are far less than merchants such as PayPal and you can get your BTC converted directly to your native currency upon payment, so you are safe from the volatile exchange rates.

  • An exchange will have a spread between buy/sell so that's your merchant fees, often (especially nowadays a spread on an exchange with liquidity will be more than your merchant fees), in addition you risk volatility if your order isnt immediately matched. Those that instant conversion will be offset against their own bank and other exchanges so its just masked.

  • @mikeg said:
    As a provider, we have found bitcoin to be an excellent payment method. The merchant fees are far less than merchants such as PayPal and you can get your BTC converted directly to your native currency upon payment, so you are safe from the volatile exchange rates.

    Except the currency itself is more volatile than Zimbabwe Dollars.

  • SplitIceSplitIce Member, Host Rep

    "BTC converted directly to your native currency upon payment"

    BitPay converts on the spot. If you invoice as $10USD, $10USD - 1% appears in your account the next day (10USD with a monthly fee).

  • @SplitIce said:
    "BTC converted directly to your native currency upon payment"

    BitPay converts on the spot. If you invoice as $10USD, $10USD - 1% appears in your account the next day (10USD with a monthly fee).

    I highly suspect the rate they use (prior to the 1% deducation from merchant side) may not be favorable to the buyer, there will be a margin that reflects the volatility of bitcoin

  • SplitIceSplitIce Member, Host Rep

    @nonuby The rate they use is based on multiple sources, if a buyer is unhappy with the price offered in BTC then shouldn't they use a different payment method?

  • DerekDerek Member
    edited February 2014

    I still can't imagine how 744,000 Bitcoins (350Million), vanished, completely unnoticed until now.

    Really sad thread at reddit :(

    http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/
    http://i.imgur.com/IDbM0BP.png < One user

  • @Derek said:
    Really sad thread at reddit :(

    Ouch, some of those guys lost some huge money. I'd be pissed, not sure what I would do if I lost over $2 million overnight.

  • ViennaVienna Member
    edited February 2014

    @jbiloh said:
    I have to ask, does Bitcoin have any practical purpose right now?

    Semi-ramdom speculation. Or as many would call it: gambling. They are vitual chips of an unregulated casino whose owners are unknown. Unfortuntely, not even technical analysis can be used here for professional trading due to the low liquidity and the lack of a consolidated marketplace.

    As a serious "real world" currency it won't be viable due to its volume limitation. So its real quality (aside from being a working and most likely legal pyramid scheme for its ideators) lies in its anonymity feature, making it attractive for all kinds of transactions where disclosing ones identity might not be wanted.

    And - somewhat conceptual and not totally serious - one day it might serve as some sort of virtual energy storage/converter. Surplus electrical energy from PV or wind farms could be used ("burned") on-site to mine BTC or other crypto currencies in periods of oversupply (and maybe also increase profits by stabilizing spot market energy prices and limiting transmission network requirements in the long run) instead of giving it away for free or using rather expensive and inefficient short term storage systems. Those proceeds could then be used to finance conventional local backup units for undersupply periods, fuel and transmission system upgrades, so that in the long run the grid can handle and balance large scale distributed generation from renewable sources.

    BTW: I don't envy whoever acquired Mt.Gox - there really seem to be a lot of very angry people out there...

  • MaouniqueMaounique Host Rep, Veteran

    Actually, I dont know if BC is viable, or even if it will survive but the idea is. One day there will be something as BC widely accepted and that will take a lot of revenue from paypal and co. It might be in a few years, however, it is closer than I used to think it is.

  • http://cryto.net/~joepie91/blog/2014/02/10/why-mtgox-is-full-of-shit/

    Though you may all think this is the end of bitcoin, it isn't. Mt. Gox was only an exchange and there purpose was to change bitcoin into USD and back. However, about a week ago there was a weird occurrence in the market.

    https://vpsboard.com/topic/3555-bitcoin-buy-for-300-at-mtgox-sell-at-bter-for-600/ <-- note here.

    My guess is that the mt.gox was in a way bought out, as soon after this release they posted a message that they were doing maintenance and you could no longer buy bitcoin, but you could still sell it to them. i.e. Mt.Gox ran out of bitcoins.

    There is a better alternative to mt.gox anyways, it is called coinbase. It looks a whole lot less shady as well.

    Mun

  • MaouniqueMaounique Host Rep, Veteran
    edited February 2014

    It is no more the end of bitgoin with mt. gox than it was the end of internet with aol. It is the wild-wild west out there, eventually, reputable and viable exchanges will appear in places where governments cant shut them down. In time, exchange will not even be so needed, like, you can buy something with BC and sell on Eur, no exchange needed, in some markets both buy and sell will go for BC (or other such currency). Gold will be available, even, so, this issue will be mostly gone.

  • BTC-e looks like it might be a good place with decent volume to use after mt. gox

  • ViennaVienna Member
    edited February 2014

    @Mun said: My guess is that the mt.gox was in a way bought out...

    I'm pretty sure that was indeed the case. Earlier today their site (mtgox.com) was just an empty page and when you viewed the html source the only line in the < body> section was "< !-- put announce for mtgox acq here -->".

  • still using bitcoins

    Go with dogecoins. such wow much profit wow

  • perennateperennate Member, Host Rep

    If mt.gox does come back, these other exchanges who people seem to think are not as shady are going to have a very hard time explaining themselves.

  • @NateN34 said:
    Mt. Gox was corrupt and it's closing is only a good thing.

    Or so they say.

    Could say the same thing for le*

  • jmginerjmginer Member, Patron Provider

    Dogecoin is a interesting coin.

  • MtGox was the test-dummy for exchanges, mainly because its a business that wasnt really a BTC exchange from the start. They were a magic the gathering trading site that evolved into a popular BTC exchange, thus everything seemed great but they really weren't built to be a "secure" exchange. If an exchanges wants to operate and provide safety, it needs a solid foundation [developers and the code itself], which MtGox lacked because it was never a true BTC exchange (from the start).

    With that all said, they had a great run but you could easily compare their management of their company to twitchplayspokemon.

  • Such Wow.

    Much Speculation.

    Very Lack Understanding.

    DOGE WILL LIVE FOREVER

    [/end troll]

  • In my honest opinion cryptocurrencies are always in trouble without even mentioning exchanges. They are always in risk of the 51% attack and are vulnerable to malleability.

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