What is the greatest lesson of MtGox?

Armis

hero member

Activity: 588

Merit: 501

Quote from: taylormcm on February 28, 2014, 05:00:26 PM

If you plan on holding any coins for the long-term it is best to store them in a paper wallet.

Developers are currently working on an offline paper wallet generator and we need testers! It's built in HTML and JavaScript and is very similar to other paper wallet generators like bitaddress.org and bitcoinpaperwallets.com

There will be many advanced features included in this paper wallet generator, for starters:

- ZIP download for offline generation
- Multiple coin support (BTC, LTC, NMC, PPC, NXT, etc.)
- Security dashboard: Gauge your setup's security level in the hopes of achieving Zero Trust
- Import Keys or Generate your own
- RNG Generation: Entropy collection based on mouse movement
- Batch generation and printing of multiple wallets

Full feature list will be announced, all features may not make it into the initial Beta but they'll all get added before release.

Please sign up at http://www.cryptopapers.com so you can be notified upon BETA release.

Cheers!

if you like we could partner on a more appropriate address for your site -- cryptocurrencykeys.com, let me know if you have an interest

nitehawk

hero member

Activity: 532

Merit: 500

Worldcore - Banking for the Future

Be Fearful When Others Are Greedy and Greedy When Others Are Fearful

or

Admit nothing, deny everything, demand proof, and make outrageous counter accusations. And if all else fails, discredit all opposition.

taylormcm

newbie

Activity: 10

Merit: 0

If you plan on holding any coins for the long-term it is best to store them in a paper wallet.

Developers are currently working on an offline paper wallet generator and we need testers! It's built in HTML and JavaScript and is very similar to other paper wallet generators like bitaddress.org and bitcoinpaperwallets.com

There will be many advanced features included in this paper wallet generator, for starters:

- ZIP download for offline generation
- Multiple coin support (BTC, LTC, NMC, PPC, NXT, etc.)
- Security dashboard: Gauge your setup's security level in the hopes of achieving Zero Trust
- Import Keys or Generate your own
- RNG Generation: Entropy collection based on mouse movement
- Batch generation and printing of multiple wallets

Full feature list will be announced, all features may not make it into the initial Beta but they'll all get added before release.

Please sign up at http://www.cryptopapers.com so you can be notified upon BETA release.

Cheers!

Merchant

newbie

Activity: 36

Merit: 0

Quote from: proton on February 25, 2014, 10:16:31 AM

Do not trust any company with a funny name, especially one that is called Magic: The Gathering Online

Unless they actually exchange Magic cards for bitcoin (and vice versa), of course Wink

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: Armis on February 26, 2014, 08:51:32 AM

Quote from: spooderman on February 26, 2014, 05:02:12 AM

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Possession isn't necessary for ownership.

Just because you transfer custody of your coins to someone doesn't make the new holders of the coin the new owners, just like when you take your kids to school it doesn't make the teacher the parent.

You entrust your fiat / cryptocurrency to exchanges for the specific purpose they set forth in their agreement -- essentially to safeguard until you have removed it from their system.

Bitcoins aren't children.

Bitcoins are a cryptocurrency. This means that they rely on cryptographic proof of ownership. That cryptographic proof is provided with a digital signature from a private key that is cryptographically linked to the bitcoin address. When you "send" bitcoins, what you literally do is digitally sign an agreement that transfers ownership of the value to the controllers of a specific set of private keys.

Quote from: DannyHamilton on February 25, 2014, 10:57:03 AM

If you don't have exclusive control of the private keys, then you don't have the bitcoins.

Any time you send your bitcoins to an address where you don't have exclusive control of the private keys (such as MtGox, CoinBase, BitStamp, BTC-E, localbitcoins, etc), you are making a donation to whoever has control of those private keys.

The bitcoins immediately belong to them and not to you. They are no longer "your" bitcoins. In return, most of the people who run these websites will offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You need to decide if you trust them to deliver on such a promise, keeping in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, and a variety of other situations that could cause them to fail to live up to the promise provided.

You are not "entrusting your fiat / cryptocurrency to exchanges", you are purchasing a promise. You are trusting the exchange to deliver on that promise. There are many untrustworthy individuals and many untrustworthy organizations in the world. Be careful about purchasing promises from untrustworthy entities. The promises are often not worth what you pay for them.

TrailingComet

sr. member

Activity: 462

Merit: 250

Don't store coin in 3 rd party wallets outside your control
Take responsibility for your coins
Spread yr risk by using multiple exchanges and service providers

Armis

hero member

Activity: 588

Merit: 501

Quote from: spooderman on February 26, 2014, 05:02:12 AM

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Possession isn't necessary for ownership.

Just because you transfer custody of your coins to someone doesn't make the new holders of the coin the new owners, just like when you take your kids to school it doesn't make the teacher the parent.

You entrust your fiat / cryptocurrency to exchanges for the specific purpose they set forth in their agreement -- essentially to safeguard until you have removed it from their system.

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: BlockChainLottery on February 26, 2014, 04:41:47 AM

Quote from: DannyHamilton on February 25, 2014, 05:34:16 PM

...
The bitcoins belong to them and not to you. They are no longer "your" bitcoins. In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You've chosen to trust them to deliver on that a promise.
...

It's striking sometimes how much similarities it has compared with a bank.

An unregulated, uninsured, unaudited bank, but yes a bank.

T.Stuart

hero member

Activity: 644

Merit: 500

One Token to Move Anything Anywhere

In my case, don't get blinded by greed.

Cluster2k

legendary

Activity: 1692

Merit: 1018

The first and only lesson: never keep bitcoins or money at a place you don't control. The wallet and bankroll of any exchange is a massive honeypot for all the worst the Internet has to offer. It could all be gone tomorrow without any warning. Unfortunately that also severely limits the opportunity to trade money for bitcoins and back again. This is the greatest weakness bitcoin has today.

btcxyzzz

legendary

Activity: 888

Merit: 1000

Monero - secure, private and untraceable currency.

if you wanna trade, trade on as many exchanges as possible. it's safer, and it's more effective because of volumes.
if you wanna store, store it on linux, encrypt wallets and do daily automatic backup on some remote machine.

still wonder why so many people left their money at mt gox, i fleed away the moment the problems began...

anu

legendary

Activity: 1218

Merit: 1001

RepuX - Enterprise Blockchain Protocol

Quote from: edok on February 25, 2014, 04:05:48 PM

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

Its easy enough:
http://brainwallet.org/
With a brain wallet, you don't need any backup.

To be extra safe, disconnect your computer from the network (pull the plug) while entering your passphrase. When done, close the browser, delete cookies and then reconnect.

Use your social security number to salt your passphrase.

thats it.

When you have done that, you are in the position that wherever you are, you have access to funds. Even if the govt steals all your assets, throws you in jail a few years and chucks you out on the street naked and bleeding, you can walk into a tailor shop and leave with a $5000 suit.

spooderman

legendary

Activity: 1652

Merit: 1029

If you aren't the sole controller of your private keys, you don't have any bitcoins.

BlockChainLottery

sr. member

Activity: 332

Merit: 250

AwesomeDice.net

Quote from: DannyHamilton on February 25, 2014, 05:34:16 PM

...
The bitcoins belong to them and not to you. They are no longer "your" bitcoins. In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You've chosen to trust them to deliver on that a promise.
...

It's striking sometimes how much similarities it has compared with a bank.

Unacceptable

legendary

Activity: 2212

Merit: 1001

Quote from: ginbank on February 25, 2014, 07:03:29 AM

LMAO!!!!!!!!! Cheesy

Jeezy911

sr. member

Activity: 294

Merit: 250

Im still mad karpooples bought a frappacino with my BTCs

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: edok on February 25, 2014, 04:05:48 PM

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

No need to sue you.

Just be aware of the risks you are taking. There won't be a lot of sympathy if Coinbase suddenly is unable to deliver on their promises.

The bitcoins belong to them and not to you. They are no longer "your" bitcoins. In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You've chosen to trust them to deliver on that a promise.

Keep in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, along with a variety of other situations that could cause them to fail to live up to the promise provided.

You are placing blind faith in an entity with no evidence that they are deserving of that faith. They are not audited, your "deposits" are not insured, and there is little (if any) regulation forcing them to follow any particular "best practices" or "security protocols".

edok

full member

Activity: 167

Merit: 100

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

melvster

sr. member

Activity: 350

Merit: 250

Quote from: rramires on February 25, 2014, 06:29:28 AM

Exchange is not a bank!
Never sleep with BTC on an exchange.
Send -> Negotiate -> Move your wallet.
Give preference to trade with more coins types, it becomes easier to exchange and have to where run.

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as
trusted third parties to process electronic payments. While the system works well enough for
most transactions, it still suffers from the inherent weaknesses of the trust based model.
Completely non-reversible transactions are not really possible, since financial institutions cannot
avoid mediating disputes. The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions,
and there is a broader cost in the loss of ability to make non-reversible payments for non-
reversible services. With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would otherwise need.
A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties
can be avoided in person by using physical currency, but no mechanism exists to make payments
over a communications channel without a trusted party.

-- Satoshi Nakamoto

bitcoinminer

sr. member

Activity: 322

Merit: 252

I would say the greatest lesson has to be the proper way to set up a Ponzi scheme.

Con Man = Confidence Man. There are still morons on here whom still have confidence in MagicalGoXXX.

keithers

legendary

Activity: 1456

Merit: 1001

This is the land of wolves now & you're not a wolf

To move coins that are not used for day trading, into a wallet immediately. Do not leave excess coins on any exchange

bitcoinminer

sr. member

Activity: 322

Merit: 252

Minus the several major GOXXXINGS of all of their customers, they've been pretty reliable.

MineForeman.com

legendary

Activity: 896

Merit: 1000

One thing that amuses me quite a bit is that people seem to have revised their memories (or have only just started following bitcoin and revised their own history).

A statement that is thrown around a lot is "MtGOX has always been a bad" etc...

The fact is, for many years MtGOX was the only reliable way to transfer BTC to fiat money. Not only did they bail thousands of users of other exchanges and services out but on the few occasions when they did have security problems in the past they owned up to it and pony'ed up the bitcoin themselves to replace the loss.

I am in no way excusing them for the current fiasco, and they and I have had issues in the past but please remember, it has not always been like this and don't "make up" history.

Neil

ddink7

legendary

Activity: 1120

Merit: 1000

Quote from: WompRat on February 25, 2014, 07:49:03 AM

Never trust a fat man with your ~~cake~~ latte?

I think greed is an important one too. When people saw that BTC were "worth" hundreds of dollars more on Gox than any other exchange, it should have raised eyebrows.

Oh, and as a corollary here--arbitrage is not riskless. I'm sure numerous people made profits off price discrepancies between Gox and the real exchanges, but many also lost.

bitcoinminer

sr. member

Activity: 322

Merit: 252

Quote from: donsanto on February 25, 2014, 03:07:02 PM

Dont put all your eggs in one basket

Don't put all of your eggs in one basket, let the basket break, lose all your eggs, gather new eggs, put them in the same basket, lose all your eggs, gather new eggs, put them all in the same basket, gather new eggs, put them all in the same basket, lose all your eggs...

AND THEN SAY...

What happened to all my eggs?

donsanto

newbie

Activity: 22

Merit: 0

Dont put all your eggs in one basket

bitcoinminer

sr. member

Activity: 322

Merit: 252

Quote from: proton on February 25, 2014, 10:16:31 AM

Do not trust any company with a funny name, especially one that is called Magic: The Gathering Online

Lulz

max.

newbie

Activity: 58

Merit: 0

Quote from: Lauda on February 25, 2014, 02:27:08 PM

Quote from: kgo on February 25, 2014, 10:09:43 AM

Fool me once, shame on you.

Fool me twice, shame on me.

This is what I've been saying about Gox many times in the past few weeks.
They have fooled these people numerous amount of times, they have been warned many times over the years. Have they listened? No.
It's their own fault.

Some people open an account in mtgox because they read in news websites and newspapers that mtgox was the biggest exchange, they never know about old issues with mtgox.

The greatest lesson with MtGox is never trust an exchange, if mtgox has issues now others will have the same issues.

Get your bitcoins now from all exchange companies will you can do it, later you could loose everything.

Lauda

legendary

Activity: 2674

Merit: 2965

Terminated.

Quote from: kgo on February 25, 2014, 10:09:43 AM

Fool me once, shame on you.

Fool me twice, shame on me.

This is what I've been saying about Gox many times in the past few weeks.
They have fooled these people numerous amount of times, they have been warned many times over the years. Have they listened? No.
It's their own fault.

Holliday

legendary

Activity: 1120

Merit: 1012

If you aren't the sole controller of your private keys, you don't have any bitcoins.

chinacoinbase

newbie

Activity: 49

Merit: 0

for bitcoin trader: never keep bitcoins at exchange, and keep at your sides
never keep big cash at exchange
never leak your password and change your password every 3 days in exchange.

for exchange: 1. only keep 5% of bitcoins online
2. Never trust computer, use half human being eye and brain to monitor
3. a little delayed to transfer bitcoins and cash is best option
4. risk management is tough, but it is very important for exchange

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: aluman on February 25, 2014, 10:56:51 AM

Quote from: Musent on February 25, 2014, 10:52:21 AM

Keep btc in your wallet. Leave btc on an exchange long enough to do a few buys/sells and then xfer to personal wallet.

that to much obvious, now the question who didn't do that and lost money on gox? for me the answare is: speculants.

Unfortunately, MANY people thought that MtGox was providing them with a free wallet service. So it isn't just speculators. There are many people who were just using MtGox as a web based wallet and their bitcoins are currently unavailable as well.

DannyHamilton

legendary

Activity: 3472

Merit: 4801

The "greatest lesson" of MtGox is the same lesson I've been trying to get into people's heads for a while now. For some reason, people just don't seem to pay attention:

If you don't have exclusive control of the private keys, then you don't have the bitcoins.

Any time you send your bitcoins to an address where you don't have exclusive control of the private keys (such as MtGox, CoinBase, BitStamp, BTC-E, localbitcoins, etc), you are making a donation to whoever has control of those private keys.

The bitcoins immediately belong to them and not to you. They are no longer "your" bitcoins. In return, most of the people who run these websites will offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You need to decide if you trust them to deliver on such a promise, keeping in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, and a variety of other situations that could cause them to fail to live up to the promise provided.

aluman

newbie

Activity: 5

Merit: 0

Quote from: Musent on February 25, 2014, 10:52:21 AM

Keep btc in your wallet. Leave btc on an exchange long enough to do a few buys/sells and then xfer to personal wallet.

that to much obvious, now the question who didn't do that and lost money on gox? for me the answare is: speculants.

Musent

sr. member

Activity: 266

Merit: 250

Keep btc in your wallet. Leave btc on an exchange long enough to do a few buys/sells and then xfer to personal wallet.

hilariousandco

global moderator

Activity: 3990

Merit: 2717

Join the world-leading crypto sportsbook NOW!

Quote from: kgo on February 25, 2014, 10:09:43 AM

Fool me once, shame on you.

Fool me twice, shame on me.

Whenever I see that I always think of this:

Quote from: jabo38 on February 25, 2014, 10:33:16 AM

Use a coin that doesn't need exchanges. NXT? Huh

You don't need to use exchanges with Bitcoin either.

FoBoT

sr. member

Activity: 658

Merit: 250

Quote from: Ekaros on February 25, 2014, 10:08:07 AM

Quote from: BlockChainLottery on February 25, 2014, 10:05:52 AM

Don't use URL for username and password?

Don't ever use exchange that uses GET for login...

wait, wat? you are trying to say there was a big red flag july 18 2010 ? sounds like heresy to me Lips sealed

jabo38

legendary

Activity: 1232

Merit: 1001

mining is so 2012-2013

Use a coin that doesn't need exchanges. NXT? Huh

RodeoX

legendary

Activity: 3066

Merit: 1147

The revolution will be monetized!

The greatest lesson may be about fear, human nature and their role financial markets.
But since you can never be to secure..
It's Satoshi's lesson. Own your wealth.
Don't farm out your banking services, remember that was the problem with money in the first place. I say exchange your monies and withdraw to cold storage any large amount. If you keep a small amount at a site because you like their app for trading just keep the balance to a tolerable amount. I use the price of the phone as an upper limit.

sgravina

sr. member

Activity: 451

Merit: 250

Sunshine

indio007

full member

Activity: 224

Merit: 100

The lesson of MTGOX is obvious.
STOP CONVERTING TO FIAT CURRENCY!

We need to develop are own economy based completely on BTC with no need for conversion.
The point of BTC is to be your own bank.

The interface with the banking system is a weakness and it has been shown over and over and over.
People keep putting their BTC in the hands of 3rd parties.
This is a critical mistake.

proton

newbie

Activity: 23

Merit: 0

Do not trust any company with a funny name, especially one that is called Magic: The Gathering Online

kgo

hero member

Activity: 548

Merit: 500

Fool me once, shame on you.

Fool me twice, shame on me.

Ekaros

hero member

Activity: 728

Merit: 500

Quote from: BlockChainLottery on February 25, 2014, 10:05:52 AM

Don't use URL for username and password?

Don't ever use exchange that uses GET for login...

BlockChainLottery

sr. member

Activity: 332

Merit: 250

AwesomeDice.net

Don't use URL for username and password?

WuttWutt

newbie

Activity: 28

Merit: 0

why are people putting money on btc-e?

rramires

full member

Activity: 231

Merit: 100

Quote from: hilariousandco on February 25, 2014, 09:59:41 AM

The greatest lesson is not to send money to shoddily run businesses. I could never even understand why people sent money there in the first place it was always taken weeks and months to get verified or withdraw money etc.

Quote from: rmines on February 25, 2014, 07:54:55 AM

Don't put all your eggs in one basket.
Never trust anybody.
Greed is not good.
Make sure to follow market news (articles warning for mtgox have been published since several weeks)
etc

Don't put all your eggs in one basket. I'll take this lesson
Better to have a smaller profit than getting nothing.

LiteCoinGuy

legendary

Activity: 1148

Merit: 1014

In Satoshi I Trust

yep but this will happen over and over. you could tell this every day and every minute, you cant prevent people from doing this. maybe this is a good reason why serious btc companys need regulation.

hilariousandco

global moderator

Activity: 3990

Merit: 2717

Join the world-leading crypto sportsbook NOW!

The greatest lesson is not to send money to shoddily run businesses. I could never even understand why people sent money there in the first place as it has always taken weeks and months to get verified or withdraw money etc.

Massimo80

full member

Activity: 168

Merit: 100

Quote from: rramires on February 25, 2014, 06:29:28 AM

Exchange is not a bank!
Never sleep with BTC on an exchange.
Send -> Negotiate -> Move your wallet.

Definitely agreed.

But the problem with Mt.Gox was withdrawing MONEY from there... I sold some Bitcoins (bought elsewhere) on Jan. 10, and immediately requested a bank transfer. I had done the same in the past, and it took more than 4 weeks.

This time, I just never received it.

rramires

full member

Activity: 231

Merit: 100

Quote from: WompRat on February 25, 2014, 07:49:03 AM

Never trust a fat man with your cake?

hahahahahaha best lesson!

Wink

boumalo

legendary

Activity: 1918

Merit: 1018

One lessons could be that if a business doesn't look too professional and is new you better be careful, especially when people start having problems to withdraw!!

WOW I just learned that mtgox disappears, I was about to say people are greedy and are depositing to enjoy the artificial low price of BTC on the website, I checked mtgox.com to see the price and POUF! It is gone

rmines

full member

Activity: 140

Merit: 100

Don't put all your eggs in one basket.
Never trust anybody.
Greed is not good.
Make sure to follow market news (articles warning for mtgox have been published since several weeks)
etc

WompRat

full member

Activity: 232

Merit: 100

Never trust a fat man with your cake?

Lauda

legendary

Activity: 2674

Merit: 2965

Terminated.

Quote from: ?? on ??

That you can trust a shady website run by two unknown Russians, based out of Bulgaria more than you can a reputable exchange run out of Japan by a well known businessman.

Sad but true.

Everyone was warned about Gox multiple times, and if one was smart, one would have avoided them after the first warning.
Once you let someone fool you around tens of times, the problem doesn't lie in them.

techstorm2

full member

Activity: 196

Merit: 100

Quote from: rramires on February 25, 2014, 06:29:28 AM

Exchange is not a bank!
Never sleep with BTC on an exchange.
Send -> Negotiate -> Move your wallet.
Give preference to trade with more coins types, it becomes easier to exchange and have to where run.

Agree, i never leave anything on exhanges, if i lose it from my machine/wallet, its my F??K up only.

miketonic

full member

Activity: 185

Merit: 100

I think this should remind us about how young BTC still is. These kind of incidents will occur before the services around BTC will develop to be properly funtioning. Of course people's stupidity played a big role in this incident, but I still think the services need to develop.

tex83rb

hero member

Activity: 606

Merit: 500

ye, always move to your own pc, in virtualized environment, crypted linux

gambit1

hero member

Activity: 980

Merit: 508

Forget about bitcoin. Governments and civilization are necessary.

ginbank

newbie

Activity: 57

Merit: 0

Armis

hero member

Activity: 588

Merit: 501

What is the greatest lesson of MtGox?

1) The mountains of evidence can be hard to see with $signs in your eyes.
2) If a company screws up in a major way once, forgiveness should not be followed by reinvestment.
3) Hope is not a reasonable investment strategy.
4) Mountains can crumble, and when they do the fallout is felt worldwide.
and
5) Whoever the guy is that went to Japan from UK to protest is now a Bitcoin hero.

https://bitcointalksearch.org/topic/do-you-know-this-guy-hint-he-just-made-bitcoin-history-486605

rramires

full member

Activity: 231

Merit: 100

Exchange is not a bank!
Never sleep with BTC on an exchange.
Send -> Negotiate -> Move your wallet.
Give preference to trade with more coins types, it becomes easier to exchange and have to where run.

Topic: What is the greatest lesson of MtGox? (Read 4977 times)