Topic: Mt. Gox has filed for bankruptcy protection (Read 5538 times)

You should imagine the situation and see exactly how it folds.
Say they limit the withdrawal to 10BTC/DAY with 50 limit per month...
Then those who have 500 BTC will take 10 months to withdraw... what about those with 5,000 BTC? 100 months... in the current rate.
So yes, manye PEOPLE will withdraw, but not many COINS will be withdrawn,

So they dont need that many BTC to allow withdrawals, furthermore, they can limit BTC withdraw to only verified accounts.

Now, at that point where people withdraw successfuly, both fiat and BTC, others will want to put money in there, maybe small amounts, but they will want to put it there because they could easily arbitrage or just buy cheap and withdraw to an outside wallet.

Therefore, this will resume operations.

...lolz welcome to crypto

This is my 3rd cycle..... if u are going to hang around you better get used to it

Get a helmet and body armour; it hasn't even started yet!

My $.02.

Looks like you were right. Price is dropping, albeit very slowly.

This. I am a (not really wealthy) person waiting to invest fiat  in btc at the "right time", but I do not see the time as right at all now. At least couple months from now and considerably lower prices, to compensate the risks

They don't have enough money to allow withdrawals.
If they reopened, there would be a massive flood of withdrawal requests as everyone tried to be the lucky one who actually got paid, and then there would be no money left at all.
Only an idiot would send more money to an exchange which has openly admitted that they don't actually have any money.
What is the good of buying cheap BTC if they don't actually have any BTC to sell you?

The supply = (all the bitcoins mined to date - bitcoins "lost" due to lost private keys etc.).

The local bubbles of scarcity are balanced by local surplus bubbles (a guy trying to sell bitcoins without interested buyers).

*As far as black market value of currency, it is driven by white market value of that currency.  If there was no way to spend the dollar, its black market value would be close to zero.

depends. the difficulty will only be lowered to a max amount (i think 30%, but not sure). there are alts which suffered from that.

but i dont believe more than 30% of miners are quitting (are there even any quitting yet?) and i am sure we could make a fork to circumvent the problem

Ah, a few pages back I see some people who only have half of the price equation (very important to have the whole equation when we are discussing the infamous topic of "What bitcoin prices will do if it is made illegal [in an unspecified number of countries] partially due to Gox's stunt")

The basic economic misconception is that price = demand.
Using that equation, demand will go down since "Joe Schmoe" listens to his government and doesn't want to go to jail.

Reality? Price = supply vs. demand.

Will making bitcoin illegal affect demand but not affect supply? Absolutely not, this is preposterous.
Supply will also go down. (Yes, technically speaking supply is fixed, but bear with me here.) Some exchanges would have to shut down, either having been made illegal, or having no legal funding/withdrawal methods. This would technically reduce supply (yes I know miners are the supply, but exchanges serve an important role as middleman. In the same way that poppy fields still exist, but drug stores do not stock heroin, therefore, price goes up due to reduced ACTUAL supply to consumer.) Institutional miners/mining farms would have to shut down as their operations would be illegal. Only "criminal" anonymous miners and "criminal" OTC dealers would be significant suppliers of bitcoins, and liquidity would be an issue. Sure, roughly the same amount of bitcoins could be created, but it would be harder to get it to the consumer. You could grow huge fields of marijuana... and then get arrested.

And since we love drug analogies so much, what is another way that supply would be reduced? Well, what does the government do when they seize thousands of kilos of cocaine and marijuana? They burn it, destroy it. Sure, occasionally they smuggle it in and sell it themselves, but for the most part it is destroyed. What will they do whenever they uncover some teenager's basement mining farm? Will they sell the bitcoins on the ILLEGAL open market? No, just like with drugs, they will send the coins to a trash address using proof of destruction (yes, proof of destruction is possible in the protocol.) There is no reason to believe they will treat it any differently. While it is still legal, yes they can auction off DPR's coins. But what about if DPR's coins were not coins but a stash of home-made bombs or methamphetamine? Would they sell those on the open market? No, they are illegal, so they would be destroyed. Yet another way supply would be reduced is by the government confiscating coins and destroying them.

Supply would be reduced to - "criminals" and "criminal" miners.
Demand might be reduced, yes, but by how much is not so apparent. People currently risk jail time in Argentina to buy a currency that inflates less than the Argentinian Peso. And the dollar black rate there is more then the legal rate... Already people risk jail time to sell drugs (made illegal, supply dried up, prices skyrocketed, and demand DID NOT dry up) and they risk lawsuits to download music and films on bittorrent (made illegal, supply is a little harder to get at, bandwidth skyrocketed, demand skyrocketed).

So when pondering the infamous "What will bitcoin price do if it is made illegal?," be sure that you are considering the price equation as "price = supply vs. demand" rather than just "price = demand." For if you only consider the effects of litigation on demand, and not the effects of litigation on supply, you will surely get Goxxed by your government when the time comes 

And everyone will know that as soon as the the 2016 block is done everything will be back to normal...

Thats not the point - the thing is that difficulty does not get adjusted after 14 days. It gets adjusted after 2016 blocks. Should the hashrate drop significantly, the time to the next downward adjustment will also be very long. During that time, TX processing can be so slow that it affects Bitcoin price. That may make the remaining miners give up mining. TX processing would come to a halt and Bitcoin would die.

This scenario  isn't realistic, though - at least those miners who don't pay for power will keep mining. As will those miners who simply want Bitcoin to survive.

Please don't forget that this was not Karpeles alone.

There are tons of Bitcoin's elite that manipulated the market, lied, and vouched for an obviously inept organization.

Self-regulatory organization (SRO), the board of which would be elected by exchanges and perhaps the bitcoin foundation, which would be voluntary for exchanges to join, which would provide supervision and guidance.  Exchanges that didn't join the SRO could still exist, but the public would have the option of purchasing bitcoin from one that had that extra layer of supervision.

Fraudsters have no benefit from releasing clear info. It's not a matter of what's possible.

Do you think that just stating the coins were "LOST" is sufficient? In bitcoin world, things don't get lost, the private keys are either stolen or private keys are "Lost".

Either the coins are lost forever and we should be able to be given a list of BTC addresses that the funds should NEVER be moved from since the private keys are not in existence any more, or they worked their way into a mixer and are gone. Bitcoin is the ultimate paper trail, these answers should not be that hard to find out unless gox completely wiped their database.

Which is it? any company filing for bankruptcy has an obligation to provide details on how the coins went missing. whether stolen or "burned"

My guess is the majority went missing due to karpeles accidentally dropping a table on a database of private keys.
 

And..... you expect them to just openly state that they stole the coins? 

I think a HUGE clarification is needed on whether these coins were LOST as in STOLEN, or LOST as in DESTROYED.



Here is the difference:

If they were stolen, market thought 850K were on gox (which they weren't), but the other 850K have been in the ecosystem the whole time.

If they were obliterated,  market thought 850K were on  gox (Which they werent) and 850K wasn't in the market the whole time which makes bitcoin more rare.


Yes I know that either way it is bullish, since now 850K bitcoins won't be released and come out flooding the other exchanges, but it makes a big difference in both terms of scarcity of bitcoin, but also.... how does it feel to know that roughly 1/12 of bitcoins are in a criminal's pocket?

I hope for the sake of all of us that these bitcoin were accidentally destroyed. I'm sure its probably a mix of stolen and destroyed though...

Either way we NEED clarification on this point. Anybody have any idea? did Karpeles specify?

Restructure means the CEO/management and/or employees etc will probably be replaced.

Don't forget, that us, the Gox customers who have fiat/bitcoins on record (right now as debt) will gladly login to our new accounts where we can see our debts and resume trading.
When we resume trading, they will gain commissions.
If they allow BTC withdrawals, limited at first, but allow it - then people will report successful btc withdrawals, others will report successful fiat withdrawal, there will be more transparency in the way the company works and at first, the prices will be lower than the other exchanges. But with time, people will realize it is working in terms of withdraw and trade.. therefore people will want to put more fiat in this "new" exchange to gain some arbitrage opportunity and/or buy cheap for the long run. Therefore new money will find itself landing on the new exchange.

I don't see how they could ever be successful again, at least as long as the same people are on board. Just more buying time.

Guys,

This looks more like a restructure and rebrand now than before...
"Bankruptcy Protection" has some similarities to "Bankruptcy" but there is a huge difference...

http://www.ehow.com/info_8053559_bankruptcy-vs-bankruptcy-protection.html
http://www.differencebetween.net/business/difference-between-bankruptcy-and-bankruptcy-protection/

It is basically a protection from the court to give them time to restructure and remodel and rebrand and re-everything (recode, relocate etc) while investors cannot sue them during that time:
http://www.zalkinrevell.com/bankruptcyprotection.html

So.. think about it, if they are going to rebrand and start new, what is the next step they need to make? this one.

Some evidence:
1. There was a HUGE btc debt erasing for a low $ value in the last weeks of trade on MTGox. (about 350k-400k coins have been erased as debt for a sum of around $63,000,000 - $72,000,000 ($180 per coin).
2. Gox.com redirects to MTGox.com.
3. Gox.com registry shows it was recently changed to the name of Mark Carpeles.
4. Mark said other parties are involved in trying to find a solution to this current problem, its live on mtgox.com
5. It's obvious that not taking a step to save and rescue almost a million MTGox customers can damage Bitcoin severely in the long run, due to more banks not agreeing to work with BTC companies, more regulation straggling Bitcoin businesses, panic from main stream and more. Therefore it is an incentive for big players to intervene.
6. On the document where a rescue plan is discussed and structured, the date for the shut-down of MTGox's website/trade is Japan morning time of the 25th February 25th. The document was released BEFORE the shut down happend, and indeed it was at the time specified.
7. The next step, according to the document is to restructure and Mark to step down.

In my view, the chances of that rescue plan to be happening just got a lot bigger.

Obviously, I might be wrong, and obviously even if a plan IS happening it doesn't guarantee it will succeed.

Anyway, I think you should know and realize that this is (in my opinion) probably what is going on.
We should get a statement on MTGox.com website within a week in my opinion.