The troubled history of the Bitcoin exchange MtGox

https://anders.io/the-troublesome-history-of-the-bitcoin-exchange-mtgox/

by nilssonanders • 12 years ago

54 36 12 years ago

tmikaeld• 12 years ago

This was the first time i really understood the problem with this "bug" that mtgox and bitstamp is having - very well written!

kordless3• 12 years ago

Mt. Gox and other crypto markets need to switch to using a common, Open Sourced solution. Their use of proprietary software represents a threat to the entire Bitcoin ecosystem.

There's nothing wrong with them keeping a proprietary ledger of accounts, but attaching their crap code to the network is a crime of epic proportions. Hopefully Ethereum will help with this.

skwirl• 12 years ago

Your unregulated financial institutions fail to take basic security measures to protect consumers, they frequently halt withdrawals without warning, your uninsured deposits are sucked into the void, your speculative 'currency' experiences extreme daily deflation and inflation...

Better blame proprietary software. Whatever you do, don't question your assumptions. And under no circumstances should you think about the fact that fiat banks in the US all use proprietary software and rarely experience serious problems (and when they do, consumers' deposits are insured up to a large amount).

BlackDeath32• 12 years ago

Perhaps you might think of it more as a compensation measure. Because things are uninsured and untrusted, OSS may be much more important.

baddox• 12 years ago

You might want to question your own assumptions as well. Couldn't the fact that Bitcoin is less mature in many ways than fiat currencies be a result of the fact that Bitcoin was invented just 5 years ago? There was no involuntary deposit insurance for USD when USD was 5 years old.

SilasX2• 12 years ago

I heard of a cool tech called the dollar so I figured, what the heck, I'll give it a try.

Turns out they try to make you spend it by continually inflating the supply of them out there with no end. In order to keep your head above water, you have to put in a "bank".

Fine, it compensates you for the loss of purchasing power, so no biggie, right? Wrong. They actually lend out the dollars that are supposed to be in your account so when you come to get your dollars out, they might not even be there!

Now, they claim to have this handled, but it's kind of a hacky solution: supposedly what happens is that they'll go to a head honcho and get a temporary loan to be able to pay you, but they only give this privilege those that can get the political connections.

They also have have this system where you money is "insured" so that even if they can't get a loan "your dollars are safe, you'll still be able to get them out!" Kludgy, but it should work, right? Well, it turns out the insurance fund couldn't actually handle everyone pulling their money back out!

So, yeah, kind of hip, but I don't think it can catch on as a serious model, especially once auditors and whatnot get involved.

maxerickson• 12 years ago

People chasing profits often don't care about ecosystems.

tzs• 12 years ago

Mt. Gox and other crypto markets need to switch to using a common, Open Sourced solution

So that when an exploitable bug is found in that common solution, it can be used to hit every exchange at once?

It is much safer to have multiple, independent solutions.

sscalia• 12 years ago

I still cannot believe anyone has any "real" money tied up in something like MtGox. Disturbing, stunning.

waterlesscloud2• 12 years ago

In other news that may also surprise you, there are people who put millions of dollars into companies that don't even have working products yet.

rayiner• 12 years ago

A great example of the difference between investment and speculation. Pouring money into a company without a product helps fund development of that product.

killerpopiller• 12 years ago

I'm one of those dummies stucking with mtgox (BTC frozen, € still "on it's way" home). It eases the pain, to be part of it. This wild west will disappear, but there has to be beginning. I believe in freedom and the banking system isn't. It isn't stabilizing our economy, it furthers a cleptocracy and destabilizes the system. Banksters even get premiums for that and when they fail, a bailout, just to take their premiums from there.

That makes such woes some sort of contribution towards a better economy.

j_s• 12 years ago

So... anyone willing to learn enough about BitCoin to build something to find all the "fixed" transactions? It shouldn't take much analysis to determine whether or not MtGox has been drained.

All these articles written about what happened but no one able to just look at the blockchain and give hard numbers.

pmorici• 12 years ago

I don't think you could accurately estimate by looking at just the blockchain.

lhc-• 12 years ago

Do we actually have an exhaustive list of wallets controlled by Mt Gox though? That would seem like difficult to obtain and likely proprietary info they would not want to reveal.

broolstoryco• 12 years ago

my understanding is that the TxID is a sha256 of the entire transaction, hence it would be feasibly and even rather simple to scan the blockchain for invalid transaction IDs.. however we would have no idea which ones could be attributed to mtgox

The troubled history of the Bitcoin exchange MtGox

Related Stories