mt. gox

[schild]

lol

[KallDrexx]

I read something good the other day that went along the lines of that when MT Gox started, the market cap for magic cards is like $200k-300k and not sure why anyone is surprised that things went to complete shit and failed when the market cap for bitcoins exploded exponentially beyond that way too quickly.

[satael]

 

[Chimpy]

Bitcoins are like Amway, they made the early adopters rich but everyone after is chasing a pipe dream.

[Ghambit]

Wonder what Patrick Byrne and Overstock think about this. 

[Merusk]

I'm not sure what I've found funnier.  The loss of all the coins or the True Believers saying this is a good thing.  That it's "a necessary growing pain to shake-out the bad actors and become a truly powerful currency."

Erf?

[IainC]

It's a great example of why internet libertarians shouldn't be allowed to run anything.

[Sky]

dogecoin is the real

[Morat20]

Charles Stross summed it up:

"C'mon, folks. Mt. Gox was a trading card swap mart set up by an amateur coder and implemented in PHP! And you expected NSA-levels of trusted computing security, so you trusted your money to it?"

He'd know, since his day job (before he hit it big writing books) was doing exactly that -- coding up backends and the like for online banking and credit cards and such when it was all brand new and cutting edge to do such things.

Then he went on to laugh hysterically and mock bitcoins a bit, but I can't blame him. Bitcoins are hilarious, and the way people treat them -- they call them a 'currency' but they act like a commodity. (Hint: Currencies should not be a PITA to spend, and should not be the subject of investment bubbles. Those are bad things in a currency)

[K9]

The main problem with bitcoins is that you can't realistically spend them.

[Surlyboi]

Manipulation, coupled with technology, coupled with the Greater Internet Fuckwad Theory.

[schild]

The protest is 2 people, one of which is wearing Google Glass. This is amazing.

[Morat20]

The main problem with bitcoins is that you can't realistically spend them.

Well yeah, although technically that's something they could grow out of. But currency has to be able to be easily spent or traded. The fact that people denominated their bitcoin wealth in their own native currency tended to be a bit of a smash against it being a real currency. Even the bitcoin enthusiasts were treating it like asset trading.

Plus it's deflationary by design, which is pretty stupid on the face of it. Bitcoin is like gold-buggery for technology lovers.

[Quinton]

My favorite part is the bitcoiners who suddenly want investigations, regulations, bailouts, etc, arguing with the bitcoiners hanging on to their belief in the decentralized no-safety-net libertarian utopia that bitcoin represents to them.

I'd love to see an effective digital currency take off, but I'm skeptical that bitcoin will ever be the one.  Hugely volatile, illiquid, and zero recourse in the event of scams and whatnot are not exactly "features" I look for in a currency.

[Venkman]

I recommend this for Politics, if not now, than soon.

Mt Gox is the kind of thing that is only possible because Bitcoin is nothing more than the pipedream of the money launderers.

[Rasix]

I recommend this for Politics, if not now, than soon.

Why?  If we get any bitcoin nutters pitching a fit, sure.  Until then, sit back and enjoy the schadenfreude.

[calapine]

dogecoin is the real

Don't laugh. Dogecoin is the 5th largest crypto-currency worldwide!  

[Morat20]

My favorite part is the bitcoiners who suddenly want investigations, regulations, bailouts, etc, arguing with the bitcoiners hanging on to their belief in the decentralized no-safety-net libertarian utopia that bitcoin represents to them.

I'd love to see an effective digital currency take off, but I'm skeptical that bitcoin will ever be the one.  Hugely volatile, illiquid, and zero recourse in the event of scams and whatnot are not exactly "features" I look for in a currency.

We have them. They're called "all the regular currencies". Or "the dollar", I suppose, given it's rather universal nature.

I mean, what are you looking for in a 'digital currency' that the dollar doesn't do? I buy things online with it all the time, pay bills, get paid -- I rarely handle actual cash. It's all digital, numbers changing in machines.

[Merusk]

Its not that it doesn't do it... it's that he doesn't have enough of them.

And in the end, that appears to be what folks are really looking for.  A get-rich-before-the-rich-assholes-do scheme.

[Morat20]

Its not that it doesn't do it... it's that he doesn't have enough of them.

And in the end, that appears to be what folks are really looking for.  A get-rich-before-the-rich-assholes-do scheme.

well yeah. I certainly wish I was bored and surfing the net and saw this stuff 4 or 5 years ago. But then I'd probably be grimly hanging on instead of selling out the first time I saw an article on 'regular' news about them.

[Malakili]

dogecoin is the real

[Goumindong]

The irony is that dogecoin will have a better chance at being an actual currency because they're willing to inflate

[Quinton]

We have them. They're called "all the regular currencies". Or "the dollar", I suppose, given it's rather universal nature.

I mean, what are you looking for in a 'digital currency' that the dollar doesn't do? I buy things online with it all the time, pay bills, get paid -- I rarely handle actual cash. It's all digital, numbers changing in machines.

Small transactions / microtransactions without a lot of overhead.  Better person-to-person payment options.  Credit cards provide useful payment mechanisms, and provide reasonable protection for me as a purchaser, but are expensive(fees)/involved to use to send money to not-corporations or small businesses (cost absorbed by the recipient, but still adds friction).  The existing services for doing this (paypal, amazon payments, google wallet, etc) all have various downsides and none are anywhere near universal.  Not that these are easy problems to solve, and not that I think bitcoin's complete wild west, good luck with that!, approach is the solution, but I think the existing model of credit cards, bank transfers, and online payment processing systems does not really do everything well.

Being less absurdly traced and data-mined would be nice too, but that fights with useful protection features (privacy/convenience/security always at war with each other).

So, yeah, maybe not so much that I want a 'digital currency' as such, but that I'd like to see an electronic payment system that is as frictionless (or close-to) and as universal (or close-to) as cash.

[Goumindong]

While Visa is almost certainly a monopoly consider that vitrual currencies all face the same costs that Visa does. The idea that BTC can somehow do transactions for free is false; a lie they tell so that they look better. But people have to mine in order to verify transactions and this mining requires electricity which must be compensated. At the moment it is being compensated by seigniorage. But this won't be the case forever(in fact isn't now), and, importantly, seigniorage isn't free.

When doing transaction verification someone has to do actual work, and that actual work must be compensated, whether its a crypto currency or not.

[Yoru]

We have them. They're called "all the regular currencies". Or "the dollar", I suppose, given it's rather universal nature.

I mean, what are you looking for in a 'digital currency' that the dollar doesn't do? I buy things online with it all the time, pay bills, get paid -- I rarely handle actual cash. It's all digital, numbers changing in machines.

Small transactions / microtransactions without a lot of overhead.  Better person-to-person payment options.  ...

So, yeah, maybe not so much that I want a 'digital currency' as such, but that I'd like to see an electronic payment system that is as frictionless (or close-to) and as universal (or close-to) as cash.

This pretty much exists in all the Nordic countries, and has for several years. When I lived in Iceland, pretty much everything offline was done by swiping a bankcard, which instantly withdrew from your debit account. All bills automatically were sent to your bank and appeared in your online bank for payment, which you paid by hitting a checkbox and clicking "pay". Again, instantly done via fee-free bank transfer. You could transfer between any two Icelandic accounts for free, at any time, and it cleared within minutes (with the weird exception of Sundays because Fuck Sundays or something).

Out for a night on the town and your account runs dry? Your friend spots you for a few beers and, in the morning, you log on to your netbank and wire over however much you racked up. I did this frequently as far back as 2008. There was no minimum on transfers, either.

I live in Germany now and it's still pretty much possible to do the fast inter-person bank transfer thing, and the SEPA is slowly making this possible for the entire Eurozone. Takes a day or so to clear, so there's room for improvement.

[Merusk]

Except it's not free, as Goum pointed out.  The bank has costs to do what you just described, and those costs are passed along at some point.  Just not at the point of the transaction like Credit Cards do.  CCs are a standardized third party in the us handling electronic transactions for a fee. That they are doing so in a monopolistic position is a fault of no other adopters wanting to jump I. Before we came to the digital currency age and the overwhelming cost of doing so now

[calapine]

Except it's not free, as Goum pointed out.  The bank has costs to do what you just described, and those costs are passed along at some point.  Just not at the point of the transaction like Credit Cards do.  CCs are a standardized third party in the us handling electronic transactions for a fee. That they are doing so in a monopolistic position is a fault of no other adopters wanting to jump I. Before we came to the digital currency age and the overwhelming cost of doing so now

It's not THAT bad. At my bank giro account + debit card are about ~30€ a year. Anything extra, like a mailed bank statement or weekly account balance via SMS to phone costs extra.

What's really a rip-off is the cash transfer form (if thats the right translation?). Basically if I make a bank transfer from cash to an account (like paying a bill), instead of from your account to another account you pay about 5 € handling fee.

[KallDrexx]

Small transactions / microtransactions without a lot of overhead.  Better person-to-person payment options.  Credit cards provide useful payment mechanisms, and provide reasonable protection for me as a purchaser, but are expensive(fees)/involved to use to send money to not-corporations or small businesses (cost absorbed by the recipient, but still adds friction).  The existing services for doing this (paypal, amazon payments, google wallet, etc) all have various downsides and none are anywhere near universal.  Not that these are easy problems to solve, and not that I think bitcoin's complete wild west, good luck with that!, approach is the solution, but I think the existing model of credit cards, bank transfers, and online payment processing systems does not really do everything well.

Being less absurdly traced and data-mined would be nice too, but that fights with useful protection features (privacy/convenience/security always at war with each other).

So, yeah, maybe not so much that I want a 'digital currency' as such, but that I'd like to see an electronic payment system that is as frictionless (or close-to) and as universal (or close-to) as cash.

Bitcoins aren't nearly as frictionless and feeless as they appear, and if they did ever take off (hah) we will be in the exact same situation because people *will still be using banks and credit cards the majority of the time*.

First of all for fees, just because me transferring bitcoins to you does not incur fees does not mean you shouldn't factor in that you are not only going to pay fees when you exchange it for USD but the person who paid USD to get bitcoins paid a fee as well.  You also have the possibility of losing some money when exchnaging it to USD if the exchange rate changes slightly by the time you get around to exchanging it. Also, any time you pay a business that accepts bitcoins right now, they almost always use bitpay or something similar to immediately make the money USD, which incurs fees on their end.  

Furthermore, credit and debit cards give you instant transaction verification, bitcoins *do not*.  So all those mini-transactions you are wanting to make actually can take quite a while before they are completely verified (they have to be verified by 51% of the nodes out there).  No consumer is going to want to wait for that to happen.  The ways most major transaction hubs get around this is they connect to a mining pool, which lets them get quick verification by all the machines in the mining pool and get enough of a % to predict if its going to pass or not.  Like Goum said, this is only free right now because you are helping to mine coins but eventually that ability is going to slow down enough to not be worth it for everyone involved.

Also, the non-tracking anonymous thing is kind of a misnomer.  Since all transactions are recorded you can do pretty well by tracing transactions around (people are currently hard core tracing all transactions from any MT. Gox wallet).  Yeah the hard part is associating a specific wallet with a specific person but nothing beats the good old internet mob machine.

*Edit* one last point: It is massively difficult to keep bitcoin wallets secure that I'm not even willing ot go through for my whole total wealth (let alone non-technical users).   Thus I'm still going to be using bank accounts and credit cards for security (and fraud prevention) reasons and thus the fees are still there.

[Yoru]

Except it's not free, as Goum pointed out.  The bank has costs to do what you just described, and those costs are passed along at some point.  Just not at the point of the transaction like Credit Cards do.  CCs are a standardized third party in the us handling electronic transactions for a fee. That they are doing so in a monopolistic position is a fault of no other adopters wanting to jump I. Before we came to the digital currency age and the overwhelming cost of doing so now

The total cost of having an account up there was something on the order of 10-15 euros a year, depending on how the exchange rate was feeling at the time. Essentially negligible given that you got full-service banking plus the sort of money-moving ability Quinton was pining for.

In Germany, my experience is similar to calapine's, though slightly more expensive - I went with an account option that granted the ability to withdraw money without transaction or currency-exchange fees, worldwide, for something like an additional 2eur/mo. Given how much I travel for work, I easily save more than the 24eur/year.

[Merusk]

Because the fees are cheap doesn't mean the cost isn't there.  I don't get why that's a hard concept. Somewhere along the line your banks and US Credit Card companies are generating money to pay for:

1) Security and storage of transactions and their history
2) Anti-hack protections
3) Accountants to go over the books and verify things
4) Infrastructure to support all this

All things that Bitcoin is having the miners or escrow services handle for "free." (i.e. no inflation, no percentage of bitcoin. They're expending real money to do this.)  We see how well that worked with Mt. Gox.

Furthermore, credit and debit cards give you instant transaction verification, bitcoins *do not*.  So all those mini-transactions you are wanting to make actually can take quite a while before they are completely verified (they have to be verified by 51% of the nodes out there).  No consumer is going to want to wait for that to happen.

I hadn't heard that before, and this ALONE means it will never gain traction.  Currency works because banks are trusted. Banks are trusted because the government backs the funds and will shut them down if they're bad actors.  Requiring 51% of all banks to say "Oh, yeah, he owns that dollar/ euro/ yen. We'll change it to be owned by Joe now" wouldn't work on the scale of L.A. much less the trillions of transactions happening in the world daily.  What a laugh.

[Quinton]

I was not in any way suggesting bitcoin had the properties I'd like to see in a digital currency or online payment system.   I do not own any and do not plan to buy or mine any.  Credit Card / Paypal / Amazon Payments cover most of my online purchasing needs and offer reasonably fast transactions and reasonable levels of purchaser protection.  For sellers, things are different -- paypal has a long record of being painful for sellers, credit card processing is expensive, dunno if Amazon's system is any better for the little guys.

Credit cards are not actually *instant* (things can take days to really clear, etc), but the fees and regulatory environment provide enough safety that they can be effectively treated that way.  Bitcoin is *slow*, most clients apparently deal with that by "hoping for the best", and of course once the transaction goes through there's no way to reverse it -- definitely favors the seller, provided the seller is not in a hurry to convert those bitcoins to a more liquid currency.

[Goumindong]

Except it's not free, as Goum pointed out.  The bank has costs to do what you just described, and those costs are passed along at some point.  Just not at the point of the transaction like Credit Cards do.  CCs are a standardized third party in the us handling electronic transactions for a fee. That they are doing so in a monopolistic position is a fault of no other adopters wanting to jump I. Before we came to the digital currency age and the overwhelming cost of doing so now

The total cost of having an account up there was something on the order of 10-15 euros a year, depending on how the exchange rate was feeling at the time. Essentially negligible given that you got full-service banking plus the sort of money-moving ability Quinton was pining for.

In Germany, my experience is similar to calapine's, though slightly more expensive - I went with an account option that granted the ability to withdraw money without transaction or currency-exchange fees, worldwide, for something like an additional 2eur/mo. Given how much I travel for work, I easily save more than the 24eur/year.

a better way to say it Merusk is "just because you don't see the fees doesn't mean they aren't there". The fees are either in flat fees on the account averaged out so that people with small accounts pay a disproportionate amount of money, or in a reduced interest rate, or transferred to the people of Iceland via subsidies.

At the end of the day someone has to do the transaction work, design the transaction system, monitor and maintain the system. This costs money no matter which system (BTC, Credit Card, Bank transfers etc) is employed because designing the transaction system and monitoring and maintaining the system costs money.

BTC has a system setup where people don't see the fees because they're either voluntary (people tip in order to get small transactions into the block chain due to the global 7 transaction per second hard limit) or because they're given out in inflation. That is, all things equal fewer BTC means higher BTC price, so every mined BTC, paid for maintaining the blockchain reduces the value of the rest of the BTC's, this is true even if the price of BTC continues to increase. But this doesn't mean, like any other system, that the transaction costs are free, they can't be because it takes real people doing real things in order to do the work.

[angry.bob]

Because the fees are cheap doesn't mean the cost isn't there.  I don't get why that's a hard concept. Somewhere along the line your banks and US Credit Card companies are generating money to pay for:

Not to say the costs don't exist, but I do know the fees associated here in the states are inflated more than you could possibly imagine. The last job I had before going back to school for nursing was writing mainframe jobs for a regional bank here in northeast Ohio. Literally the only human involvement in any of that stuff is a teller entering it in a CICS panel, or some shitty program that runs on a server. ATM transactions have literally no human involvement other than a teller changing the money and deposit cartridges. We didn't even pay for repairs, it was part of the service contract we paid a flat cost for when we bought the ATMs. Processing time was next to nothing, mostly just sorting transactions out and creating files to FTP to other banks so they knew who to charge what.

What took far more resources was the Patriot Act stuff that sent off records of every transaction of every bank customer to the feds. That shit ran 24/7, probably so they never had to wait more than five minutes to see what somebody was up to.

[squirrel]

I hadn't heard that before, and this ALONE means it will never gain traction.  Currency works because banks are trusted. Banks are trusted because the government backs the funds and will shut them down if they're bad actors.  Requiring 51% of all banks to say "Oh, yeah, he owns that dollar/ euro/ yen. We'll change it to be owned by Joe now" wouldn't work on the scale of L.A. much less the trillions of transactions happening in the world daily.  What a laugh.

Yeah the transaction time is one of the key reasons that any *coin derivative is pretty much dead as a currency. Even if you overlook all the other huge issues with Buttcoin no-one is going to wait 7 - 12 minutes to do a digital transaction. Purchasing a car? Maybe. But lunch? A computer? A suit?  Get the fuck outta here.

[naum]

I don't understand the libertarian lunacy over bitcoin.

Also, it is amazing to me, the audacity of banking, I suppose not just in the U.S., but on a global level -- how in the downturn we siphoned billions into failing banks yet at the same time, with the transformation of a great deal of commerce into online space means a windfall for banks in transaction fees. Just like Microsoft obtained a tool booth on everyone's desk by the mid 1990s, banks have a toll meter continuously running, for just throughputting bits.

When I worked at American Express, I remember all the executives being giddy about being reclassified as a bank, meaning that they could charge late fees, and that was giant profit stream they were eager to leap into. That, and commissioning third party processors, mostly in other nations, so that they could collect a fee on every transaction (for carrying the AMEX logo) and let Credit Suisse or someone else incur all the risk while they reaped a guaranteed profit.