Topic: Mt Gox (Read 472 times)

And it would be true, but that is the flaw of bitcoin.  People see it as being valuable as only compared to "real" currency.  However its strength will save it and that is that it is p2p and works best p2p. 

No worry about the market being cornered in an obvious way like the Hunt brothers tried to corner silver years ago.  Bitcoin has value because it is scarce and it is easy to exchange and private.  A cornering of bitcoins would keep them rare but would take away the other value of ease of exchange so blatent hording would increase scarcity but drive down the price because bitcoins are useless unless they are used as currency, unlike gold and silver which would still have value even if they were never used for money or for investments.  Any hording would have to be done in secret or blamed on things like technical problems, server upgrades or "hacks".

Lucky for people who trade, mtgox is not associated with a tight cabal of French / Anglo friends based in Japan who were in on bitcoin from the beginning.  Oh, wait....

Yes and no ... It would be cheaper to go this rout, however unless you can do the exchanges in person this would be dangerous. The exchange protects you from scamers that will promise to send you coins once they receive payment.

mtgox left message on their site about what is going on with them being shutdown

Seems to me that ditching all exchanges and using peer to peer technology is the answer to bitcoin. Wasnt that how it was designed anyway?

No major wall-street firm will touch this market right now. There's simply far too much reputational risk of it all blowing up and also the fact that it's so associated with illegal goods and tax avoidance etc.

Trust me, I spent 20+ years inside some of the biggest!

What needs to happen is for the exchanges to get a lot more professionsl in their understanding of how markets work.

You paint an uncertain future for BTC as Wall Street comes calling for profits. How this market plays out with more freedom than the paper markets will be interesting. Also, well done on selling near the short term high.

I'll start by saying I support the idea of Bitcoins.  Similar to online stock trading exchanges, the bitcoin exchanges will catch up to handle the serious (adult) business they are pretending to be able handle, but mangling very badly at the moment.  Wall Street floor traders have been dabbling in bitcoins for many months now.  If exchanges like Mt Gox, etc think they have any idea how to handle the type of antics professional traders come up with to artificially manipulate unregulated markets, they are sorely mistaken.  When the derivatives market for bitcoins opens (a start-up exchange for bitcoin futures, options, and short sales is in the works), the amount of volume the bitcoin exchanges are seeing now is a drop in the bucket to what they are about to witness on a daily basis as money is moved in an out rapidly to make more lucrative derivatives contracts profitable.  The problem with the low supply of bitcoins is that it is a textbook "dream scenario" for wall street traders- i.e. Bitcoin is a market that can be easily cornered due to limited coin supply.  Once the derivatives market opens, there will be millions to be earned as the bitcoin market is cornered, dumped, and re-cornered in order to essentially print money fleecing futures, options, and short contract holders.

My point is that the volatility witnessed this week is only a prelude to the volatility that is to come.  Ad hoc exchanges like Mt Gox will remain in a state of intermittent artificially induced paralysis until they are put out of their misery by hackers.  Unfortunately, the only entity well organized enough to assemble the proper, safe, stable, reliable exchange now necessary will be tied to the evil empire of  commercial/retail/investment banking.  Gamers-turned-exchange managers were too busy enjoying their new-found transaction fee profits to see the crash course their ineptitude had placed their exchanges and, unfortunately bitcoins, on.  The profits from mining bitcoins were meant to be used to develop proper exchanges, but those were selfishly placed as well.  Instead, the profits were hoarded as the bitcoin world was set up to be handed over to wall street on a silver platter.  When your future bitcoin transactions are being processed by a high fee demanding bank, you will have "magic the gathering ad hoc exchange- we're smarter than everyone else because we're condescendingly computer savvy" and their ilk to thank.

Disclosure:  I sold all bitcoins I owned at $236.17, and do not plan to re-enter bitcoins in the next 24 hours.