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Topic: [Withdraw MtGox] We should tie up MtGox's hands after MultiSig is implemented. (Read 2608 times)

legendary
Activity: 1330
Merit: 1000
Bump for history lesson...
sr. member
Activity: 360
Merit: 251
Right, you're simply describing mtgox acting as escrow, but I was interested in whether multisign is useful? As far as I can see, multisign is completely useless in the scenario that we're describing, because it's better (both for mtgox and for the guy who receives the traded bitcoins) that mtgox wouldn't have any control over the address that received the traded bitcoins. Both sides of the trade have to trust mtgox to carry out the exchange between the right destinations anyway, and after the trade is done there's no point in having joint custody.
hero member
Activity: 714
Merit: 504
^SEM img of Si wafer edge, scanned 2012-3-12.
People would still be able to deposit USD at mtgox, and mtgox would make sure that your account gets the USD when you sell your bitcoins.
So on the one hand, you don't need to trust the other party you're selling to to actually deliver the USD, and on the other hand you don't have to trust MtGox about running off with your bitcoins (or doing fractional reserve banking with them).

Problems:
You still have to trust MtGox with your USD, and they can still do FRB with those.
Either trades aren't real time anymore, or you need to run an MtGox client that knows what you want to trade, and only signs those transactions that make a trade you want. When you don't have the client running, trades could not be made.
sr. member
Activity: 360
Merit: 251
What he means is, when the trade is made, mtgox would need your permission to do the actual trade. The bitcoins would then go into a new joint custody of mtgox and the guy who just bought them from you.

Ahh right, I see what he meant. Though if that's case, what's the benefit of mtgox having custody over the traded bitcoins? If we could fill all the missing details in this scenario (we cannot because that's not how real-time exchanges work) then giving control over the bitcoins just to the guy who bought them seems to be enough, and joint control with mtgox would be useless?
hero member
Activity: 714
Merit: 504
^SEM img of Si wafer edge, scanned 2012-3-12.
Huh? You deposit bitcoins, trade them for dollars, withdraw the dollars, and the person who received those bitcoins on the other side of that trade will need your agreement if he wishes to withdraw those bitcoins?
What he means is, when the trade is made, mtgox would need your permission to do the actual trade. The bitcoins would then go into a new joint custody of mtgox and the guy who just bought them from you.
sr. member
Activity: 360
Merit: 251
I suggest after MultiSig is implemented,
we should force MtGox to store coins in the MultiSig Address that can only be spend with our agreement.

Huh? You deposit bitcoins, trade them for dollars, withdraw the dollars, and the person who received those bitcoins on the other side of that trade will need your agreement if he wishes to withdraw those bitcoins? Would you also need to seek the agreement of the specific person who deposited the dollars before you could withdraw them? How would that work? You can do MultiSig contract if both sides already have bitcoins as collateral, but the whole point of an exchange like MtGox is that someone who has only dollars could trade them for bitcoins.
sr. member
Activity: 350
Merit: 250
If you are going to publicly make accusations about a company that can harm their reputation, you best present some solid evidence. If I were running MtGox, I would take some time to trying find your identity and file a suit just to teach you a lesson. This is borderline criminal directly trying to tarnish a reputation of a company. You can tell the judge that you were pretty sure about it and see how that goes.

MagicalTux has already answered questions about trading within his own exchange before on irc multiple times and stated that he does not do this. So far, MtGox has given me no reason not to trust their claims.



hero member
Activity: 868
Merit: 1000
Even if they are trading on their own exchange, it doesn't automatically follow that they're doing so with user funds/Bitcoins.  They collect tens of thousands of dollars in fees every month and we have no idea whether they hold some of their own reserves of dollars and Bitcoins on the exchange itself.

There are no doubt some people who use the exchanges as online wallet services and leave their balances their for months without trading or withdrawing but a lot also seem to be trading and withdrawing frequently - if MtGox doesn't have at least the great proportion of user BTC deposits on hand then that should be causing issues with trades and BTC withdrawal and we're just not seeing the level of complaints to indicate that's the case.

They're definitely bad at predicting the demand for various withdrawal methods.  Withdrawals through certain methods are frequently delayed while they transfer funds to Dwolla/Paxum/whatever. 

I absolutely believe it's time that the exchanges submitted themselves to independent, third-party audits but I suspect that if an audit revealed any kind of deficit it would be far more likely to be of dollars than Bitcoins. 
hero member
Activity: 602
Merit: 502
This thread makes no sense. I seriously hope that no exchange manages bitcoins like that - one address per customer. It's just silly.

As for the fractional reserve thing: if you don't trust them trade your coins somewhere else. There are plenty of other exchanges and there is bitcoin-otc. We will eventually find out more about MtGox's business when Bitcoin gets legislated. In the meanwhile, this accusations are pointless.
sr. member
Activity: 308
Merit: 250
Finway: You're a Bitcoiner, so you can buy five pounds of cocaine on Silk Road. You can't prove you didn't.

DEA: Get 'im, boys.

See where your logic leads? There's 80 reasons not to use MtGox, the crazy conspiracy theory they're selling everyone's coins off isn't one of them.
legendary
Activity: 1652
Merit: 1128
Just because they can doesn't mean they did, no need to presume guilt with nothing to back it up.  As I said in the other thread, a third party audit would be more effective, you won't get a big enough response here to do anything, especially with your less than tactful accusations. 
legendary
Activity: 1386
Merit: 1097
I consider it less than 5%.

You believe, you consider, you think. Unless you have any evidence, this is just conspiracy theory.

I have no reason to think mtgox is not keeping 100% of their funds. As my evidence there are many mtgox wallets handling hundreds of thousands bitcoins, so there's no reason for me to think they *don't* manage 100% funds.

And bring us any evidence or stop this crap. I'm not related with Mtgox in any way, however I'm very sensitive to this kind of affairs because me any my pool is frequently target of similar accusations and I know how idiotic those conspiracy theories usually are.
hero member
Activity: 714
Merit: 500
with 100% reserves or something?

I consider it less than 5%.

I'm more concerned with people saying here that there is only one address being used to store all the value, just one person stealing a single private key and all that would go poof...

Shall we pray ?
hero member
Activity: 714
Merit: 500
There's absolutely no reason to think that big selloff has been made by mtgox itself. Actually low price is against their own interest, so I really doubt it.


Increasing the fees, increasing the volume are their interests.
How? What resources they have ?  
Because few people withdraw their BTCs,
if they do sell users' coins,
nobody can discover it.
Why not ?
newbie
Activity: 44
Merit: 0
Are we saying something here that MtGox is not running with 100% reserves or something?

I'm more concerned with people saying here that there is only one address being used to store all the value, just one person stealing a single private key and all that would go poof...
legendary
Activity: 1386
Merit: 1097
I didn't because they are alive.
They can and they can't prove they didn't.

They obviously didn't too, because nobody complained that they cannot withdraw their coins (except some technical issues which were resolved).

Quote
Due to the big sell-off, they have the suspicion.

Don't take me wrong, but it seems you don't understand how exchange works, so pretty standard behavious looks like some conspiracy for you. There's absolutely no reason to think that big selloff has been made by mtgox itself. Actually low price is against their own interest, so I really doubt it.

legendary
Activity: 1148
Merit: 1008
If you want to walk on water, get out of the boat
Innocence proves nothing
legendary
Activity: 910
Merit: 1001
Revolutionizing Brokerage of Personal Data
They can and they can't prove they didn't.
Due to the big sell-off, they have the suspicion.
Guilty until proven innocent - that's the spirit!
hero member
Activity: 714
Merit: 500
I didn't because they are alive.
They can and they can't prove they didn't.
Due to the big sell-off, they have the suspicion.
legendary
Activity: 1386
Merit: 1097
So they can sold  coins out thin air.

You can kill your parents.
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