Mt. Gox on verge of collapse, Bitcoin plunges: Is this the end for the virtual currency?

Yahoo Finance ^ | 02/25/2014

[SeekAndFind]

Check out Mt. Gox, the site of what was the largest bitcoin exchange at one point, and you'll find a blank page. The site is now unavailable, and the exchange appears to be on the verge of collapse -- a number of Bitcoin companies announced Mt. Gox was planning to file for bankruptcy after technical problems and an apparent major theft. Customers have been unable to withdraw their money since Feb. 7.

An alleged Mt. Gox document circulating on the Internet that can't be confirmed said the company had lost more than 744,00 Bitcoins in a theft that had gone unnoticed for years.

Related: "Silicon Valley is the new Wall Street": Alex Payne

The news pushed the price of Bitcoin below $500 for the first time since November when the virtual currency began an ascent to above $1,100, according to CoinDesk.

A number of Bitcoin companies including digital walllet Coinbase issued a joint statement distancing themselves from Mt. Gox, writing: "This tragic violation of the trust of users of Mt.Gox was the result of one company’s actions and does not reflect the resilience or value of bitcoin and the digital currency industry. There are hundreds of trustworthy and responsible companies involved in Bitcoin. These companies will continue to build the future of money by making Bitcoin more secure and easy to use for consumers and merchants. As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today."

Related: Bitcoin ATMs roll out as cryptocurrency faces hackers, regulation and volatility

So is that really what we are seeing?

[Aria]

I’m just wondering if the bankers and or governments had a hand in the hacking....after all...who has the most to lose?

[theyalllie]

No retailers really take bitcoin as currency - that’s just a hype tactic. Unless they actually PRICE their goods in bitcoin, they aren’t accepting bitcoin as currency. All those retailers claiming to “accept bitcoin” are doing is instant conversion of bitcoing to U.S. Dollars or whatever their home currency is. Prices are in local currency, as they always were.

Bitcoin (or another similar idea) may someday be a decent payment mechanism, like PayPal, but nothing resembling a currency. I doubt it will ever be even that.

[DannyTN]

"It won’t be the end, there’s always some sort of alternate currency out there."

I'm betting on a tulip comeback myself.

[Usagi_yo]

It’s the end of non-governmental regulated crypto-currency.

What I don’t get is how did it happen? Bitcoin was designed to be stored personally, and record keeping was peer to peer proliferating throughout the world as a record in everybodies wallet. Why were people keeping them stored at Mt. Gox?

[discostu]

I was thinking more along the lines of S&H Green Stamps and CamelCash. America has a long history with things that aren’t quite dollars.

[Usagi_yo]

Because the expense was in real currency. Bit coins have fluctuated so fast that nobody can keep up with the price fluctuations. So baseline in a stable currency and do currency conversions at transaction time.

Reality is, crypto-currency is heavily used in illegal activities today, it would be just like a Government to watch, wait, and learn as they fake support or sympathy for it, then cut the legs out from underneath.

[StevieRay20]

Considering how much they manipulate the bond market, bitcoin never stood a chance.

[theyalllie]

Ian’t that just what I said? Bitcoing is NOT a “real” currency. You could have anything as a middle “currency” in a dollars to bitcoin to dollars transaction. It could be the number “1” as the transfer mechanism. It winds up being just paying with dollars and a middleman taking a cut.

Again, the “we accept bitcoin” is a scam.

[PreciousLiberty]

“It’s the end of non-governmental regulated crypto-currency.”

To some extent, there never was a non-regulated cryptocurrency. However, Bitcoin by design is independent of any particular government. The US may attempt to regulate it, but it will be very similar to trying to regulate barter. I suppose they could legislate that US businesses not accept it, but I seriously doubt that will happen. Even if it did, non-US businesses could still accept it.

Russia has already outlawed it...we’ll see how eager US lawmakers are to emulate Russia. ;-)

[canuck_conservative]

Governments can’t allow this for tax or security reasons.

Doesn't have to be a conspiracy here, just good 'ol human nature at work. Bitcoin had two things working aqainst it -

(1) unless your "currency" is backed by hard assets (like gold), then it's "fiat" money - based entirely on trust. So who are you gonna trust - the US Gov't or a bunch of anonymous programmers scattered around the world? Gov't jokes aside, we all know how Joe Schmo will think.

(2) as word of Bitcoin got out and the price rose, there were a lot of speculators jumping on (with zero commitment to the currency concept itself) that further drove up the price. As soon as the price peaked, they bailed and took their profits, so the price tanked.

[PreciousLiberty]

“Ian’t that just what I said?”

No.

“Bitcoing is NOT a “real” currency.”

Yes it is. From Merriam-Webster:

Currency: something that is used as money

If you can pay for things with it, it is “currency”.

“You could have anything as a middle “currency” in a dollars to bitcoin to dollars transaction. It could be the number “1” as the transfer mechanism.It winds up being just paying with dollars and a middleman taking a cut.”

You’re confused. It is not a “dollars to bitcoins to dollars” transaction. It is a “bitcoins to dollars to goods” transaction. The exact same issue occurs on a site taking Euros for goods, where the goods are priced in dollars. Is the Euro not a currency? Further, one of the main attractions of bitcoins is the low cost per transaction, compared with the other online payment options like MasterCard and Visa.

(BTW, while I suppose technically the number “1” could be a currency, counterfeiting would seem to be problem. Not so with Bitcoin.)

“Again, the “we accept bitcoin” is a scam.”

Nope.

[Usagi_yo]

You’re using a too constrained definition of currency.

Let’s make it clearer. If you decide to sell your wares and your wares were made months ago and all expenses where calculated in dollars — how do you expect for them to sell it in Bitcoin without considering the dollar value.

Business like manufacturing and production and R&D require stable currencies. Not an unstable CURRENCY like Bitcoin.

[Cementjungle]

It's a shame really, it held such promise. The Occupy-Wall Street types who are behind this are so smart. They're the ones who discovered that banks are evil (because they're run by banksters). Banks lend money for mortgages and things and actually expect the borrowers to pay loans back according to the contracts people signed. How despicable and corrupt is that?

I sure hope this super-cool non-bankster currency takes off soon so I too can dump all my hard-earned savings into their esteemed pockets. I'm sure they're all very trustworthy. Anyone who's smart enough to figure out that banks are evil because they're run by evil banksters has got to be really smart.

[dmz]

I saved all my Confederate dollars.

[dennisw]

I see $300 rigs on newegg that have a modest CPU with 4 high end graphics cards

How come graphics cards are used for mining bitcoin> Thanks

AMD Could Be Devastated by the Bitcoin Craze (AMD, NVDA)
The Motley Fool
3 days ago - Newegg, a popular PC component digital storefront is (as I write this) ... If AMD is selling more graphics cards, shouldn’t that be a positive for the company? ... AMD’s high-end graphics cards are better suited for cryptocurrency ...

[dennisw]

I see $3000 rigs on newegg that have a modest CPU with 4 high end graphics cards

How come graphics cards are used for mining bitcoin> Thanks

AMD Could Be Devastated by the Bitcoin Craze (AMD, NVDA)
The Motley Fool
3 days ago - Newegg, a popular PC component digital storefront is (as I write this) ... If AMD is selling more graphics cards, shouldn’t that be a positive for the company? ... AMD’s high-end graphics cards are better suited for cryptocurrency ...

[Georgia Girl 2]

Live by the bitcoin die by the bitcoin. :-)

[hadaclueonce]

chinchillas, emus and beanie babies.

sometimes it is good to be old.

[Fledermaus]

I recently watched a local tv news show that tried to explain the Bitcoin idea. After 10 minutes it was clear everyone was clueless. The talking heads, the people they interviewed and me, the viewer.

I literally learned less than what I knew or thought I knew going into the segement.

Reminded me of an Amway guy.

[catnipman]

Never attribute to malice that which is adequately explained by stupidity.