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Old 02-25-2014, 12:32 AM   #913
Panda Lover
Scooby Newbie
Member#: 214367
Join Date: Jun 2009
Chapter/Region: MWSOC
Location: Glad I'm not Canadian.

Two stories:

The CEO of Bitcoin-trading exchange Mt.Gox has left the digital currency's top advocacy group, the latest sign of trouble for the embattled exchange.

Mt.Gox chief executive Mark Karpeles resigned from the Bitcoin Foundation's board of directors on Sunday. Former colleagues said he left the organization to focus his attention on Mt. Gox's copious issues.

Mt.Gox has been mired in problems ever since Feb. 7, when it halted withdrawals from its trading accounts. The company's computer programmers hadn't accounted for a quirk in the way Bitcoin works, allowing cyber attackers to dupe Mt.Gox with a scheme resembling receipt fraud. When Mt.Gox discovered it was under attack, it stopped any investors from pulling their money out of their trading platform -- but it has yet to allow them access to their money.

Many doubt they'll ever get their money back, so the price of a Bitcoin on Mt.Gox has spiraled down to $201. Meanwhile, the price is closer to $571 on other major exchanges that ran into similar issues but quickly recovered.

Mt.Gox did not respond to requests for comment. But members of the Bitcoin Foundation's board say Karpeles left on good terms -- and wasn't pushed out by his colleagues.

"There's no hard feelings. Mt.Gox did the right thing," said board member Elizabeth Ploshay. "They have their hands full. It's better for them to be taking care of the matters they have in front of them."

Ploshay voiced concern that one Bitcoin exchange's problems could overshadow recent positive developments for the independent, digital currency. For example, she noted that Bitcoins are now being used to donate to charities like The Water Project. And recently, a Bitcoin entrepreneur donated $10,000 in bitcoins to his college, the University of Puget Sound in Washington State.

However, the image of Bitcoin would undoubtedly take a major hit if the situation gets worse for Mt.Gox. Having the exchange shut down would rock confidence in the digital currency's future and leave many investors empty handed, and speed up calls for government intervention.

Evan Rose, president of Bitcoin ATM company Genesis, said that the kinds of problems seen at Mt.Gox and other exchanges show that Bitcoin is in flux.

"The people running the systems right now are not necessarily business men," Rose said. "For the most part, they're people who came into this digital project without grasping the value or risk of it. The ecosystem is maturing, but it's a little scary for everyone involved."
This one is from an Anonymous account I follow on Twitter that has many "legitimate" followers...

Bitcoin’s Apocalyptic Moment: Mt. Gox may have lost 750,000 bitcoins

I have received an ***unverified*** report from an otherwise reliable source, which is purportedly from Mt. Gox. The document, which is titled “Crisis Strategy Draft” outlines the current situation at the exchange.

I trust the authenticity, but have work to do to verify the document myself 100%. I will work to do so feverishly.

Here is what it says in the introduction:

"For several weeks MtGox customers have been affected by bitcoin withdrawal issues that compounded on themselves. Publicly, MtGox declared that “transaction malleability” caused the system to be subject to theft, and that something needed to be done by the core devs to fix it.

Gox’s own workaround solution was criticized, and eventually a fix was provided by The truth, it turns out, is that the damage had already been done. At this point 744,408 BTC [over $333M ed.] are missing due to malleability-related theft which went unnoticed for several years.

The cold storage has been wiped out due to a leak in the hot wallet. The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company. However, with Bitcoin/crypto just recently gaining acceptance in the public eye, the likely damage in public perception to this class of technology could put it back 5~10 years, and cause governments to react swiftly and harshly.

At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public. We believe in the value of Bitcoin, its potential to change the world, and its principles of transparency. Most importantly we care about the customers of MtGox and other bitcoin-based businesses who will be affected. The likely consequences will be larger than this localized financial damage, and we believe that the benefits of keeping MtGox stable and running outweigh the risks. This isn’t about saving MtGox anymore.”

This is catastrophic, and I am sorry to share this. I do believe that this is one of the existential threats to bitcoin that many have feared and have personally sold all of my bitcoin holdings through Coinbase.

To do so, and not give you the same information, would be dishonest and immoral. I am a risk tolerant investor, but I believe this will be catastrophic for Bitcoin, both as a currency and as a fledgling industry.

If this is a hoax, it is one that I am fully blindsided by. I fear, however, that it is not.
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Last edited by Panda Lover; 02-25-2014 at 12:37 AM.
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