Topic: Safe to leave my btc / USD on MT GOX and how much do you guys hold on it? (Read 2227 times)

Once the government seizes assets of MtGox, you will lose whatever you had in there. If you think this is impossible or that governments never confiscate, then by all means, leave everything you have in there.

If you think there is even a slight possibility that they will, then you'd be a fool to leave anything in there for extended periods of time.

I'm in the latter camp. If there is anything I know, it's that governments are incompetent, and far more likely to take incorrect and drastic measures. MtGox going down would have an adverse affect on the Bitcoin market (the price would fall significantly) for a short period of time, then it would slowly recover over time, eventually surpassing where it was prior to the freezing of assets.

FDR confiscated US citizen's gold in the 1930's. People who owned gold were deemed "hoarders" and guilted into turning it over. Many did. After confiscating about 500 tons, it was sold to the Treasury who owes it to the Federal Reserve. Shortly after it was confiscated, the "fixed price" between dollars and gold that had remained the same for decades was modified in such a fashion that the people who held gold and never sold it were better off.

http://en.wikipedia.org/wiki/Executive_Order_6102

Make no mistake, if MtGox goes down, those of us that don't keep our money in there are going to be better off than the ones who did.

You should keep in mtgox what you are actively trading with, no more, no less.

If you need to hold decent amounts of USD in a 'tradeable' position.. It might be better to keep in Dwolla than Mt. Gox; in my estimation Mt. Gox's LLC in the US is far more likely to get a surprise visit from the Secret Service than Dwolla is.

From talking with, and watching conversations with magicaltux; I have a lot of faith in both his ability and best intentions with keeping the site secure.  If you are working with an unpatched windows xp box.. using mtgox might indeed be 'safer.'

I am far more worried about a freezing of USD assests in mtgox in some out-of-the-blue sting rather than their servers getting compromised.

But seriously.. this is a frickin crypto-currency.. trust NO ONE EVER.

The standard advice for any investment or trading instrument applies also to Bitcoin. Diversify your investments. Don't invest more than you can afford to loose. etc.
Even though Mt.Gox is probably one of the safest places to keep your BTC from accidental loss, you may want to keep only the BTC you are trading (not more than 10,000 btc). It's silly to keep a lot of cash on Mt.Gox (greater than $10,000 average balance) because Bitcoin will be appreciating significantly. for a long time to come. If your not speculating, don't plan to, don't want to be tempted to, then there is no need to keep any btc at MtGox. Unlike cash, BTC can be moved in a matter of minutes. I try to keep BTC spread around on 2-3 on-line wallets or exchanges. The rest I download to my (several) wallets and back up onto flash drives that are hidden. I travel sometimes to some dangerous places so Bitcoins are the perfect emergency currency. (These numbers are only relevant for only through summer 2011)
Mt.Gox has an incredible amount of potential and probably already is negociating with venture capitalists who will guide it to a huge exit (IPO, Acquisition, PE, reverse IPO...).

I know, this is why I included people that may be close to you / have in-person access to the computers/databases etc. If money is the motive it will of course be the one not already having/making it doing the crime.

But it's all a question of proportion.
As it stands, there likely isn't enough liquidity to instantly cash out millions before anyone notices.

Will be interesting to see how this all looks 6-12 months down the road. As you said, stuff is still moving.

This touches on what, in my opinion, is the greatest threat to this fledgling community.

As MtGox and other sites grow, and the exchange rate increases, we will have a growing amount of wealth stored in these servers.
To rob a bank, you have to be physically present, use guns, etc.  Very messy.  But one could rob MtGox or mybitcoin from the other side of the world, safely outside the reach of any relevant police force.
Bitcoin's greatest strength is also it's greatest weakness.  It has never been so easy to transport millions of dollars halfway around the world, with no possible recourse.

I am sure Tux and the other major admins have much stronger security than say Sony.  But we all know that no computer is truly impervious.  One high profile break in could wipe out this little experiment of ours.


As to the key-logging issue, have you considered implementing two factor security?  Those random number fobs are not that expensive, and they would eliminate a great majority of these types of attack.

We are doing a lot of backups to avoid something like that, and we are in the process of getting all the accounting audited (will probably take more or less than one year to get stuff ready and audited).

As for running away, that wouldn't be really smart. Keeping MtGox running is a way better way of making money (except that instead of keeping all the trade fees for me, I get employees to do support, and lawyers to analyze ways of making bitcoins legal).

We however had some people getting their funds stolen because they used a too simple password, or used the same password on different sites, answered a phishing email, or had a virus (key logger). We have limited possibilities of bruteforcing by blocking any IP with more than 10 failed login attempts and will implement extra security features (extra code to withdraw, or sms validation).

I would never leave more than (the equivalent of) $100 in it. I get worried once I hit $50.

For all I know instead of DDOS attacks at some point someone corrupts the databases or hacks the logins or whatever.

Or the guy or someone who has access to his stuff decides it'd be a nice change of pace to cumulatively wire out everything to a Fiji account and make off with it.

I've been doing some thinking. I've got a pretty decent chunk of change siting on MT GOX like I imagine most people on this board do.

How safe do you think it is to keep it there?

More than that I'm wondering what other people do.
Do you use it like a bank or just get in and out as quick as possible?

Feel free to comment all you want about it.