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Posted on 02/24/2014 11:02:26 PM PST by Jet Jaguar
The website of major Bitcoin exchange Mt. Gox is offline amid reports it suffered a debilitating theft of the virtual currency.
The URL of the Tokyo-based outfit returns a blank page Tuesday.
Separately, several Bitcoin exchanges released a joint statement saying they are working to reassure customers that funds under their control are held securely.
The statement says Mt. Gox should not be considered a reflection of the value of Bitcoin or the digital currency industry.
A "crisis strategy" report shared widely online that purports to be an internal Mt. Gox document says more than 740,000 Bitcoins are missing from the exchange, which froze withdrawals earlier this month.
(Excerpt) Read more at hosted.ap.org ...
ping.
“Bitcoin.” Isn’t that another word for “Hula Hoop”?
I have it bookmarked and yes, it is showing up blank.
Certainly not. A hula hoop is immensely useful, compared to a long number that a Bitcoin is.
A made up currency invented by a hacker with no intrinsic value suffers a computer attack. Who’d have thought?
I don’t think that is what has happened in this case. Rather, this was a fractional-reserve bank using bitcoins that had a bank run. There is no FDIC for that.
Correct me if I’m wrong on what is happening here, but I don’t think I am.
You are wrong. ‘Twas a hack attack. A bit purloining. A heist.
Ah, Ok. Early reports looked more as I described. Still, nothing inherently wrong with bitcoin is revealed by this. The same thing happens with regular banks.
Fractional reserve is used only when the bank uses some of the money as their own, for loans or for other investments that, in theory, should be returned on time and with interest.
There isn't much to do with bitcoins in terms of loans. However Mt. Gox could have used the bitcoins that they held for their clients to convert them into other (real) currencies and then invest those. And lose. This is not very likely because the loss is too large (700K BTC = 700 million USD.) One cannot even invest this money and lose it all, unless the investor is exceptionally unwise. Rare an investor who has USD $700M to work with is that unwise. Any capital management firm would gladly invest your 700M into a thousand funds that are not all that likely to fail at the same time... and we did not have a major stock market crash in years. So Mt. Gox probably did not lose the money this way.
They are claiming that the money was stolen gradually, over the years. This is UNBELIEVABLE, simply because a simple pair of numbers can tell you, every single day, how your assets are doing, compared to what they are supposed to be doing. That is, if the owners of Mt. Gox are not aware of modern systems of accounting in general, and banking specifically. (That would not surprise me, actually.)
The most likely scenario, however, is that the money was simply stolen by insiders. Only the insiders with sufficient oversight could sit on such a money drain for years and do nothing. It's a serious amount of money; with entirely zero liability for this fraud, the thieves may feel very, very safe in their new villas. Those who lost their money are not entirely clean before the law; and Mt. Gox made sure that the "investors" have very little to show. I read that people had to take screenshots (!!!) of their Mt. Gox accounts because nothing else, on paper and with signatures, was available. If that's true, the account holders are left with no proof that their money was ever existing, thanks to the fact that Bitcoin transfers are anonymous.
Still, nothing inherently wrong with bitcoin is revealed by this. The same thing happens with regular banks.
This does not happen (anymore) with regular banks because the banks are required by law to maintain proper records and to do good accounting and to carry insurance. Every transfer of your money, even between accounts, is recorded and saved forever. Banks' computers are constantly running integrity checks on all accounts, and banks' accountants are paid their salary to check, every day, that the computers' conclusions are reasonable. Banks can miscalculate and lose their shirt on some bad investment, but they hardly ever lose *your* money.
Losses in the Bitcoin world are an inevitable outcome. Bitcoin operates outside of regulation in most countries, and it is illegal in some other. The government does not protect the customer if the customer is engaging in shady operations. It is possible to buy drugs in the USA and be given a fake product; you have nowhere to go, and no one to complain to. It's your risk, all of it. If nobody protects the customer, that customer can be robbed - and we just witnessed an example of that.
Bwhwhahahhaha....Someone stole the Monopoly money..Go to Jail..Directly to Jail...Do not pass Go..Do Not Collect 200 BTCs..
The Professor did it in the Library with the Candlestick...O different game same FUNNY MONEY
I heard it was "tulip bulb"...
Bit coin: Epic fail.
I’ll bet the government had something to do with this. They hate competition.
What most Freepers don’t realized is the actual reason bitcoins were invented. To purchase illegal merchandise anonymously. They were created to buy and sell drugs, sex slaves of all ages, child pornography, prostitution, hit men, etc... A criminal’s best friend and traded mainly in death before becoming sexy.
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It’s a gone goose.
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