Apparent theft at prominent Bitcoin exchange Mt. Gox shakes Bitcoin world

“The most prominent Bitcoin exchange appeared to be on the verge of collapse late Monday, raising questions about the future of a volatile marketplace,” Nathaniel Popper and Rachel Abrams report for The New York Times.

“On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin’s existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft,” Popper and Abrams report. “A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation.”

“But at the same time that the news about Mt. Gox was emerging, a New York firm announced plans to create an exchange that could draw the world’s largest banks into the virtual currency market for the first time,” Popper and Abrams report. “The new exchange is being put together by SecondMarket, which rose to fame a few years ago after creating a platform for buying and selling shares of companies like Twitter and Facebook before they went public.”

Read more in the full article here.

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Apple pulls ‘Blockchain’ Bitcoin app from iTunes App Store – February 6, 2014
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17 Comments

    1. Are you saying that drug pushers can’t call the cops when someone steals their cocaine? Don’t they need a police report of the theft before they can report the missing drugs on their homeowners insurance policy?

    1. You mean like how the dollar fell down?

      Bitcoin is very resilient, but Mt Gox has been making goofs for years. Not noticing they had lost roughly $100,000,000 is not a sign of a problem with Bitcoin but with a small group of people who had no idea how to run a reliable exchange. Good riddance!

  1. This was predicted on Buttcoin.org two weeks ago:

    http://buttcoin.org/mtgox-sinking-ship

    The short version is that Mt. Gox is run by idiots. But then, the site began as a trading site for Magic: The Gathering e-cards, so why people chose to trust them as a currency exchange is beyond me.

    This story is so schadenfreudelicious. If you read the article, it says that a new exchange is coming online that could save Bitcoin… by involving the big banks. Which would pretty much destroy the whole point of Bitcoin, that’s it a fully democratic currency. If that exchange actually happens, there will be de facto centralized control of Bitcoin, as the banks will easily be able to manipulate its value.

    ——RM

    1. From a technical standpoint, Bitcoin is not in the least hurt by banks. Market manipulation can happen due to any party having a large number of coins, and there are already people with large wallets.

      But unlike with dollars, even if banks support Bitcoin you don’t need to use banks to use them.

      Also, some people really do need banks to manage their bitcoin for them, with guaranteed despots, etc. So banks can bring in old style services for those who need them, but the peer-to-peer abilities of bitcoin will remain available for new commerce and those that don’t want to deal with banks.

      This is good news however you look at it.

      1. Oh, I agree that Bitcoin will still “work” with huge banks in the driver’s seat. It’s just amusing how that destroys the ideals of the most passionate Bitcoin supporters. Bitcoin “has no centralized control” (no Central Bank). Bitcoin is “free from government interference”.

        If the big banks become involved in Bitcoin, they will collectively be a central controlling influence, as their financial power will dwarf all the hackers with mining rigs in their basements. (Look for the banks to start taking over the mining, to ensure stability.) And as far as government interference, you can’t have big banks involved and not have those banks’ home governments involved.

        So yeah, Bitcoin will still work once the banks take it over. But it won’t be the “CURRENCY OF THE FUTURE!!!11” anymore.

        ——RM

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