Topic: IF MT GOX DIES THEN BITCOIN PROBABLY WILL TOO (Read 4084 times)

yeah I'm with you. So we had (have???) some trading volume issues too eg if nobody noticed the fudged coins in the system the number of presumed 'lost' coins should go up ?

Say Gox have 50'000 more BTC registered with customer accounts than they actually have in their wallets. Then that is 50'000 less Bitcoins in the eco-system than the market thought. Providing that there is no inter-exchange counter-party risk here which I assume that their isn't, then this is not a run on the bank situation, but a robbery. Not so good for those who got robbed, but increases value of those who didn't get robbed.

The psychological impacts of this are another matter. I am with Bitstamp and have absolutely no fears about having my USD there at this point in time. I also had funds with Bitfinex, an exchange that I did feel a bit uneasy about, so i pulled what I had out of there. 

Who cares about MtGox, bitcoin price might crash to like 400-500 but it will go back to 700-800 range in no time..

+1

LOL @ OP: "If Bank of America Dies then the Dollar will too."

Failed logic.

Less in circulation than people have thought ? Isn't it crystal clear how many coins were minted eg block time / reward / halving vs current block I hope so, truly do else.....

Yes some are lost. But if Mt Gox went gambling any  'Fiat' btc created via 'creative' accounting is not going to disappear from the real circulation. They were never there in the first place. Now if all those that, presumably, but hopefully not lost their coins in the yet to be seen debacle, replenish their lost coins by buying from others: then yep I can see the price go up.

That's how I understand the controlled supply of BTC to work or am I on the wrong train

It depends on how GOX dies that matters how much it effects bitcoin.

If it slowly dies, as it has been doing, then no harm, people shift over to other exchanges.

If it dies in a massive fraud, e.g. "Uh, sorry folks, all your coins are gone." a la the inputs.io debacle then yes, big problem.

A run on the bank is a totally different thing from a bank being robbed.

If there were 500 gold coins in a small town, and someone robbed 250 of them, and there was no way of getting anymore gold coins into that town. The purchasing power of each remaining gold coin would double. Similarly, if there were 500 gold coins in a small town, 250 stored in one goldsmith A's vault and the other 250 in Goldsmith B's, but Goldsmith A had issued 2500 paper certificates, only for a large holder of Goldsmith A paper certificates to turn up to Goldsmith A's premise and demand payment in 300 gold pieces only to be to be given 250 and/or told their was 'technical hitches' preventing the Goldsmith from paying out the gold, then the value of Goldsmith A's paper gold receipts would plummet, the value of the physical gold coins themselves would probably rise as the volume of gold coins (or their paper 'equivalents') would become more scarce.

MtGox have probably 'printed' BTC on some kind of fractional reserve system in order that they can game with other peoples money, only for everything to have gone tits up. Bitcoin exchanges don't work like the banking system in that they aren't all leveraged up to the eyeballs in counterparty risk with each other. If/when MtGox folds, and disappears with whole bunch of Gox coins and Gox bucks, their will actually be less Bitcoins in circulation than the market believed. The numerical effect of Gox going down in the way in which it looks like it will go down, would actually increase the value of Bitcoin, not decrease it. The psychological impact of the trust that Bitcoiners feel that they can place in the remaining exchanges however, is the real unpredictable X-factor here.

It is now a widely accepted and "confirmed" fact it is MtGox that caused the recent Bitcoin price slide but I say this notion is a big a pile of horseshit as the 'Bitcoin hits $1000 on Zynga news' back in early January. If it were the case that MtGox caused the sharp correction, why then did all the major take down action, the lowest low, and the lionshare of volume occur on Bitstamp?

This is what nearly happened @the last finance crisis in the USA a few years ago, smartass.

Oh, so if bank gets robbed in USA for example, then the currency ($) collapses?
Interesting indeed...

So true

Bitcoin would be far better off without MTGox

Exactly. This is a zero-sum game and needs a constant supply of new suckers.

Countdown is begun,

Tokio/Japan GMT, 23:40
Peking/China  GMT, 22:40

Seems like good of a deal if that happens. Now we're getting stable hands.

Whyyyyy are bitcointalk users so damn fascinated by feeding trolls? This has to stopppppppppp!!!!!

Although this Gox ordeal may be painful for a lot of people,
I believe it is has done something good for the bitcoin community...
For the first time, people snapped out of looking at Gox for the "reference" price of bitcoin!

Most of the users who are aware of the difficulties of getting fiat out of Gox knew the "Gox price" is distorted for the past year, but it still remains as THE exchange to reference for a lot of people. Currently, Gox is trading below other major exchanges, which I believe is much healthier than before.

As to how Gox is going turn out on Monday, I hold quite a pessimistic view...

For every trade in the exchange, coins are simply changing hands, and no coins are generated or destroyed. Gox SHOULD always have enough bitcoins for traders to withdraw and there should never be ANY holdups. If they have resorted to sending coins manually in these few days to "catch up" with the backlog, they would have said so. The fact they have halted withdraw, it could be something more troubling.

Let's hope we get some good news

byebye Gox. you sucked anyway

Game is over.

How is MtGox an exchange?

They accept USD and bitcoins.

They only pay out bitcoins (until recently).

What do they do with the USD? Do they buy bitcoins on another exchange? Or...spend the USD on themselves and hope the small amount of bitcoins lasts long enough that nobody notices. Until they run out of bitcoins...and they have to make up a reason why they can no longer send bitcoins.

Gox said an update to the problem on Monday, not a fix. Gox doesn't fix issues, ever.