What would stop MtGox from | Bitcointalksearch.org

ZephramC

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Quote from: fitty on April 12, 2013, 07:52:23 AM

Maybe they'd run out of Bitcoins. They could always just shift the price point to $70-$80.
....

OK. MTGox sets $50-$60. Then bitcoins become much more popular and the opinion will be that the value of bitcoin is well above $200. MtGox runs out of bitcoins (all will be bought for $60). They will shift the price point to $70-$80 then to $90-$100 then to $140-$160. But nobody (or almost nobody) will sell BTC for (as little as) $140. What is next?
(MtGox is still out of BTC and plenty of angry customers are asking "Where are my BTC for $160 I paid for?!")

fitty

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Quote from: gimme_bottles on April 12, 2013, 08:58:12 AM

if you compare their performance to the trading volumes and their fees it is obvious that they can cover any costs of operation and still have a shitload of coins on hand.

Which is my point, they should have the cash and coins to pull it off.

No one knows their expenses. How much are they paying the founders? 100k a year? 300k a year? They could be losing money for all we know. You can't look at trading volume and go "Yup, they're profitable". What exactly in their history tells you they're well run and financially sound? Lots of things would point to the fact they're a bumbling cluster fuck.

SuperHakka

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Can somebody tell me what the original business of mtgox.com was? I heard it was the website for Magic the Gathering Online Exchange, basically like a website for buying and selling of game cards for the MtG card game? Is that right?

gimme_bottles

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Quote from: fitty on April 12, 2013, 08:54:55 AM

Quote from: gimme_bottles on April 12, 2013, 08:45:57 AM

Quote from: fitty on April 12, 2013, 08:42:32 AM

Quote from: gimme_bottles on April 12, 2013, 08:35:38 AM

mtgox is an exchange, not a bank. it's banks business to speculate with clients funds. exchanges don't (or shouldn't).

They're not an exchange. They're a pretend exchange of a virtual currency. Post a link to the rules/laws/regulations MtGox, as an official "exchange" of Japan has to follow. Do they really report to the JFSA (Japan Financial Services Agency)? Come on now.

of course they are not an official exchange, but they work like an exchange. still, you can't compare mtgox to any banks.

So they don't have to follow the rules of a real exchange, but they're going to anyway? MtGox can (and has and does) spend the money that's been deposited. You really think they keep 100% cash on hand to cover withdrawals? Really? They never operated at a loss? They have mountains of cash on hand to cover everyone? People really trust them that much?

You're saying that regulated banks spend/gamble clients holdings, but an unregulated bootleg bitcoin exchange in Japan, they'd never dare use clients holdings to cover investment/expenses/costs? Come on now.

if you compare their performance to the trading volumes and their fees it is obvious that they can cover any costs of operation and still have a shitload of coins on hand.

fitty

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Quote from: gimme_bottles on April 12, 2013, 08:45:57 AM

Quote from: fitty on April 12, 2013, 08:42:32 AM

Quote from: gimme_bottles on April 12, 2013, 08:35:38 AM

mtgox is an exchange, not a bank. it's banks business to speculate with clients funds. exchanges don't (or shouldn't).

They're not an exchange. They're a pretend exchange of a virtual currency. Post a link to the rules/laws/regulations MtGox, as an official "exchange" of Japan has to follow. Do they really report to the JFSA (Japan Financial Services Agency)? Come on now.

of course they are not an official exchange, but they work like an exchange. still, you can't compare mtgox to any banks.

So they don't have to follow the rules of a real exchange, but they're going to anyway? MtGox can (and has and does) spend the money that's been deposited. You really think they keep 100% cash on hand to cover withdrawals? Really? They never operated at a loss? They have mountains of cash on hand to cover everyone? People really trust them that much?

You're saying that regulated banks spend/gamble clients holdings, but an unregulated bootleg bitcoin exchange in Japan, they'd never dare use clients holdings to cover investment/expenses/costs? Come on now.

fitty

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Quote from: SuperHakka on April 12, 2013, 08:43:59 AM

Quote from: fitty on April 12, 2013, 08:37:10 AM

If Bitcoins go to $0, do they really care? There's no more exchanges in that case. They declare bankruptcy. Liquidate the assets. Companies go broke all the time. If losing millions was a crime, we wouldn't have any corporations left. MtGox is tied to BTC, sink or swim. They might think this gives Bitcoin the backing/stability it needs to go to the next level.

There isn't a bank in America that has the cash on hand to handle everyone withdrawing their balances. The banking industry is legalized gambling, but MtGox wouldn't stoop to that? I don't know.

dude you sound like gangsta. thing is the banks own all the guns. what does Mt gox have, fuck all I'd say. they would string up mr gox from nearest lamppost. any who would implement this would be the dumbest dumbfuck in town.

He'd go "We thought Bitcoin had a bright future, didn't pan out". You don't go to jail for being bad at business. Companies go bankrupt and lose their ass all the time. MtGox is bootleg as fuck but people seem to think they're all legit and above board. So the biggest reason so far is because MtGox is morally above gambling people's money on Bitcoin's future. Hrm. Yeah.

gimme_bottles

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Quote from: fitty on April 12, 2013, 08:42:32 AM

Quote from: gimme_bottles on April 12, 2013, 08:35:38 AM

mtgox is an exchange, not a bank. it's banks business to speculate with clients funds. exchanges don't (or shouldn't).

They're not an exchange. They're a pretend exchange of a virtual currency. Post a link to the rules/laws/regulations MtGox, as an official "exchange" of Japan has to follow. Do they really report to the JFSA (Japan Financial Services Agency)? Come on now.

of course they are not an official exchange, but they work like an exchange. still, you can't compare mtgox to any banks.

SuperHakka

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Quote from: fitty on April 12, 2013, 08:37:10 AM

If Bitcoins go to $0, do they really care? There's no more exchanges in that case. They declare bankruptcy. Liquidate the assets. Companies go broke all the time. If losing millions was a crime, we wouldn't have any corporations left. MtGox is tied to BTC, sink or swim. They might think this gives Bitcoin the backing/stability it needs to go to the next level.

There isn't a bank in America that has the cash on hand to handle everyone withdrawing their balances. The banking industry is legalized gambling, but MtGox wouldn't stoop to that? I don't know.

dude you sound like gangsta. thing is the banks own all the guns. what does Mt gox have, fuck all I'd say. they would string up mr gox from nearest lamppost. any who would implement this would be the dumbest dumbfuck in town.

fitty

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Quote from: gimme_bottles on April 12, 2013, 08:35:38 AM

mtgox is an exchange, not a bank. it's banks business to speculate with clients funds. exchanges don't (or shouldn't).

They're not an exchange. They're a pretend exchange of a virtual currency. Post a link to the rules/laws/regulations MtGox, as an official "exchange" of Japan has to follow. Do they really report to the JFSA (Japan Financial Services Agency)? Come on now.

gimme_bottles

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Quote from: fitty on April 12, 2013, 08:37:10 AM

There isn't a bank in America that has the cash on hand to handle everyone withdrawing their balances.

that's how banks work. you won't find a single bank on earth who could instantly pay out all its clients.

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Quote from: fitty on April 12, 2013, 08:02:50 AM

Run out of cash? With account holdings they have what 10 million? 20 million?

How many million would it take to cover all the people who want to cash out at $60 over the next month? Really think they'd end up with every bitcoin?

I know lots of people who wouldn't sell at $100, let alone $60. What is going to convince people BTC is really worth $30 and go sell everything at $60? And never buy back in? Something would really convince the community that BTC is worth $30 when MtGox will keep buying at $60. There's people who think BTC will hit $500. $1000. What happens when it caps out? Any massive sell off just causes much less supply and they end up slowly selling it right back. They have enough holdings to survive any swing.

People who use BTC as a currency will be loading money and buying daily as they do now.

Quote from: gimme_bottles on April 12, 2013, 08:00:20 AM

if you set a lower limit panic selling would stop, so mtgox would indeed run out of cash very fast. they make lot's of money, but not enough to stop a whole market from going down

There is another firm which tried to do something similar with Italian bond bets. Do a bit of research on them. Their customers all chipped in, even though they didn't know it.
The name of the firm was MF Global.

fitty

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Quote from: SuperHakka on April 12, 2013, 08:29:13 AM

OP dude, this is a bad idea and would never work. The risk to Mt Gox would be way too high for them to even consider it. Think harder, say we have the protected $50-$60 range as you say, if some seriously bad news comes out, say protocol is compromised which means the true value of bitcoins should be $0 (but information leaks out slowly), then Mt Gox will run out of cash no matter how much they have. They would need $60x11m to be absolutely safe to buy all outstanding bitcoins. Then the owners have lost half a billion for no reason at all. If the Feds say tomorrow they will accept bitcoin for payment of taxes, the next moment all of Mt Gox users would stampede out of there to try to get higher prices at other exchanges, need I go on?

If Bitcoins go to $0, do they really care? There's no more exchanges in that case. They declare bankruptcy. Liquidate the assets. Companies go broke all the time. If losing millions was a crime, we wouldn't have any corporations left. MtGox is tied to BTC, sink or swim. They might think this gives Bitcoin the backing/stability it needs to go to the next level.

There isn't a bank in America that has the cash on hand to handle everyone withdrawing their balances. The banking industry is legalized gambling, but MtGox wouldn't stoop to that? I don't know.

gimme_bottles

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Quote from: fitty on April 12, 2013, 08:30:31 AM

*lol*

Are you kidding me? They're not even regulated. What governing body controls MtGox and what are the rules? They're allowed to shut down the exchange to upgrade a server? Whenever they like? Nothing is insured. There's no oversight. Are we still talking about bitcoins?

Clients funds? Ever heard of banks? They gamble with clients billions on a daily basis. Who's really going to Japan to sue them because they are guaranteeing a $60 bottom price point for BTC? Really?

Quote from: DeathAndTaxes on April 12, 2013, 08:21:20 AM

You do realize the funds on MtGox don't belong to MtGox. MtGox has no legal right to place buy orders with client funds. If MtGox tried something that stupid they would be sued into bankruptcy and it wouldn't really matter because anyone with $0.01 of USD would be pulling it from the exchange.

mtgox is an exchange, not a bank. it's banks business to speculate with clients funds. exchanges don't (or shouldn't).

HappyBitCoinUser

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fitty

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*lol*

Are you kidding me? They're not even regulated. What governing body controls MtGox and what are the rules? They're allowed to shut down the exchange to upgrade a server? Whenever they like? Nothing is insured. There's no oversight. Are we still talking about bitcoins?

Clients funds? Ever heard of banks? They gamble with clients billions on a daily basis. Who's really going to Japan to sue them because they are guaranteeing a $60 bottom price point for BTC? Really?

Quote from: DeathAndTaxes on April 12, 2013, 08:21:20 AM

You do realize the funds on MtGox don't belong to MtGox. MtGox has no legal right to place buy orders with client funds. If MtGox tried something that stupid they would be sued into bankruptcy and it wouldn't really matter because anyone with $0.01 of USD would be pulling it from the exchange.

SuperHakka

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OP dude, this is a bad idea and would never work. The risk to Mt Gox would be way too high for them to even consider it. Think harder, say we have the protected $50-$60 range as you say, if some seriously bad news comes out, say protocol is compromised which means the true value of bitcoins should be $0 (but information leaks out slowly), then Mt Gox will run out of cash no matter how much they have. They would need $60x11m to be absolutely safe to buy all outstanding bitcoins. Then the owners have lost half a billion for no reason at all. If the Feds say tomorrow they will accept bitcoin for payment of taxes, the next moment all of Mt Gox users would stampede out of there to try to get higher prices at other exchanges, need I go on?

DeathAndTaxes

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Gerald Davis

You do realize the funds on MtGox don't belong to MtGox. MtGox has no legal right to place buy orders with client funds. If MtGox tried something that stupid they would be sued into bankruptcy and it wouldn't really matter because anyone with $0.01 of USD would be pulling it from the exchange.

gimme_bottles

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Quote from: fitty on April 12, 2013, 08:13:16 AM

Quote from: gimme_bottles on April 12, 2013, 08:08:17 AM

Quote from: fitty on April 12, 2013, 08:02:50 AM

Run out of cash? With account holdings they have what 10 million? 20 million?

How many million would it take to cover all the people who want to cash out at $60 over the next month? Really think they'd end up with every bitcoin?

I know lots of people who wouldn't sell at $100, let alone $60. What is going to convince people BTC is really worth $30 and go sell everything at $60? And never buy back in? Something would really convince the community that BTC is worth $30 when MtGox will keep buying at $60. There's people who think BTC will hit $500. $1000. What happens when it caps out? Any massive sell off just causes much less supply and they end up slowly selling it right back. They have enough holdings to survive any swing.

People who use BTC as a currency will be loading money and buying daily as they do now.

Quote from: gimme_bottles on April 12, 2013, 08:00:20 AM

if you set a lower limit panic selling would stop, so mtgox would indeed run out of cash very fast. they make lot's of money, but not enough to stop a whole market from going down

what's with all the people waiting for >$5 coins? Tongue

oops, i reread my statement and i admit it does not make much sense Roll Eyes

but still, someone setting the price is quite opposite to the fundamentals of bitcoin, so i guess there won't be many around who support it

If MtGox said "$60 is the bottom, done.". I don't see people yelling "GTFO!" after the pump and dump that just went on. Don't people crave stability?

fitty

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Quote from: gimme_bottles on April 12, 2013, 08:08:17 AM

Quote from: fitty on April 12, 2013, 08:02:50 AM

Run out of cash? With account holdings they have what 10 million? 20 million?

How many million would it take to cover all the people who want to cash out at $60 over the next month? Really think they'd end up with every bitcoin?

I know lots of people who wouldn't sell at $100, let alone $60. What is going to convince people BTC is really worth $30 and go sell everything at $60? And never buy back in? Something would really convince the community that BTC is worth $30 when MtGox will keep buying at $60. There's people who think BTC will hit $500. $1000. What happens when it caps out? Any massive sell off just causes much less supply and they end up slowly selling it right back. They have enough holdings to survive any swing.

People who use BTC as a currency will be loading money and buying daily as they do now.

Quote from: gimme_bottles on April 12, 2013, 08:00:20 AM

if you set a lower limit panic selling would stop, so mtgox would indeed run out of cash very fast. they make lot's of money, but not enough to stop a whole market from going down

oops, i reread my statement and i admit it does not make much sense Roll Eyes

but still, someone setting the price is quite opposite to the fundamentals of bitcoin, so i guess there won't be many around who support it

If MtGox said "$60 is the bottom, done.". I don't see people yelling "GTFO!" after the pump and dump that just went on. Don't people crave stability?

fitty

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If the entity has the bitcoins and cash to back it up, do people even have to agree?

The price was just at $260. It would take everyone saying "$60? CASH IT ALL OUT CYA!!!!". If MtGox and other exchanges never fall below $60 USD, what will convince people it's not actually worth $60?

The price is just based on supply and demand. It has nothing to do with BTC adoption. The price didn't rise to 266 because Bitcoin was "doing well". People bought it up driving the price up then dumped it. The price was $12 in Feb, the entire community would now reject $60 as the lowest BTC will ever drop?

Quote from: michaelmclees on April 12, 2013, 08:04:13 AM

Honestly, I've always thought such a thing could be tried. If some entity set price targets that many people agreed to abide, it could work. But getting people to agree is the difficult part.

Topic: What would stop MtGox from (Read 2269 times)