My Conversation with Mark Karpeles of MtGox

[mituozo]

Depends, it's more like you pay a storage company to look after your gold. A year in, the gold gets burgled. 10 years later, all the gold in the US is turned into Mercury in some bizarre freak accident, the price of gold skyrockets, and you come to the storage company to collect your gold and they go "oh, we lost it lol". I can't see a fair valuation of the loss being the time of the theft, that would only be the case if customers were told right away, keeping it a secret would be a hedge otherwise, if it goes up, no big deal, if it goes down, you make a profit.

People will have been withdrawing fiat though. So e.g. I sell my 5000 bitcoins 3 years ago, and Mtgox lets me withdraw it because they have the money covered in their fiat account. Later it turns out they never had those bitcoins in the first place (because someone stole them), so all they've really lost is that fiat figure.

Them losing 750k bitcoins doesn't mean they've lost 750k bitcoins that were currently in user accounts. Obviously, they'd be worth the current market rate. It's likely that (to some extent) the bitcoins were being covered by Mtgox's margin over the years.

 

[microphone head]

It's likely that (to some extent) the bitcoins were being covered by Mtgox's margin over the years.

It seems like they weren't being covered at all!

 

[bodiddley]

the biggest takeaway for me wasn't that mt gox went under or the value of capital lost, it was that when the curtain pulled back, "mt gox" was just some goober with a cat on his desk and no infrastructure.

so for the forseeable future, every time i think about investing in any BTC exchange, that's who i'm going to picture running it. that's a big problem.

And if it's a problem for a tech-savvy internet professional, imagine the general public.

 

[TheSeo1]

Were you around last time Mt. Gox caused a price crash?

It doesn't matter what happens or doesn't happen to Gox today. Bitcoin doesn't need and doesn't rely on Mt. Gox like it might have a year or two ago.

Pretty ignorant to think that what happened at MtGox won't have a negative influence on the average guy's opinion about BTC.

You're mixing up two things here, BTC relying on Mtgox or not, and the consequences of Mtgox going down towards the public opinion about BTCs.

 

[zimok]

Pretty ignorant to think that what happened at MtGox won't have a negative influence on the average guy's opinion about BTC.

You're mixing up two things here, BTC relying on Mtgox or not, and the consequences of Mtgox going down towards the public opinion about BTCs.

^, yep. First thing I heard when I got in my car yesterday on CBC radio...

"Future of bitcoins uncertain after Mt Gox, one of the largest bitcoin exchanges declared bankruptcy"

Guess how many technical details re: bitcoins they went into to accompany their report... you guessed it, none.

Anyone who heard that who doesn't have more than a superficial understanding of BTC is going to think it's a bad investment. If its the first time they heard about BTC, this will create a persistent negative anchor point.

Just like every other market, it's the perception of the masses and their subsequent investments that make or break it. LukeP's are few and far between.

 

[AdamC]

The theory is essentially that the U.S. Government seized MtGox’s cold storage wallet and Karpeles can’t disclose that information due to a gag order.

This is What Most Likely Happened to MtGox | Escape Velocity

 

[dsm56]

This is What Most Likely Happened to MtGox | Escape Velocity

Wow. There's some food for thought.

 

[LiamLennon]

This is What Most Likely Happened to MtGox | Escape Velocity

Nice find, this does seem to be the most plausible thing that could have happened...all of Mark's answers seem to lead that direction as well.

 

[Grindstone]

Just because you haven't seen the good news doesn't mean it doesn't exist.

Why don't you lecture us on quantum mechanics in the 9th dimension next? You know exactly the same amount about both topics.

I know nothing about quantum mechanics. I know a lot about public relations and marketing. If you think the current state of "news' on bitcoin is positive from an investment standpoint (and be honest, investors are the engine pushing the bitcoin train, not any intrinsic value), my meme should have said "not sure if stupid AND insane."

Note: I'm not saying anything about the long term viability or value of bitcoin. I have no ability to tell the future. I'm simply calling bullshit to your claim that MtGox going down shines a positive light on bitcoins RIGHT NOW.

 

[REIMktg]

I know nothing about BTC other than what I have read on this forum, watched on an episode of some lawyer TV show, and read in an article this morning. So the following could be nonsense to anyone in the know.....

But, the article I read this morning said that somehow they are trying to track down the transactions through the code of the lost coins.

This lead me to speculate that this is all an intentional loss where the coins will be recovered, proving the safety of the concept and BTC will skyrocket.

 

[dangregory]

So what about Mark's self-admitted past having been arrested for some type of problem involving "online payment systems" in France?

Does Mt.Gox's CEO Have a Secret History of Committing Fraud?

 

[DKPMO]

So what about Mark's self-admitted past having been arrested for some type of problem involving "online payment systems" in France?

Does Mt.Gox's CEO Have a Secret History of Committing Fraud?

Hmmm, a payment system with main application for facilitating illegal transactions run by a fraudster?!

I am SHOCKED, SHOCKED.

 

[DKPMO]

This is What Most Likely Happened to MtGox | Escape Velocity

How could this be? Isn't BTC supposed to be a distributed online network, unburdened from any dependencies on the physical world?

Turns out a few armed agents with a warrant could bring it down? Who would have thunk that...

 

[User9364]

Hmmm, a payment system with main application for facilitating illegal transactions run by a fraudster?!

I am SHOCKED, SHOCKED.

I could say the same thing about "cash." Ya know... that paper stuff that governments are always confiscating.

It turns out that they also issue it, and give it to themselves.

Wait... where were you going with that, anyway?

 

[Kiopa_Matt]

Weren't all MtGox accounts recently hacked a month or two ago, or is everyone forgetting that? There was a Reddit thread about it, and lots of people popped in with comments like, "I signed up 6 months ago, never used the account since, then all of a sudden got an e-mail saying I successfully logged in".

 

[bodiddley]

I could say the same thing about "cash." Ya know... that paper stuff that governments are always confiscating.

It turns out that they also issue it, and give it to themselves.

Wait... where were you going with that, anyway?

Better to go with known evils than unknown ones

 

[SHGDigitalMedia]

Pretty ignorant to think that what happened at MtGox won't have a negative influence on the average guy's opinion about BTC.

You're mixing up two things here, BTC relying on Mtgox or not, and the consequences of Mtgox going down towards the public opinion about BTCs.

I agree, the stock market crash of 2009 did the same thing with retail investors, they stayed out of the market for 4 years. Bitcoins which are not as common as stocks in the mainstream may never catch on because of Mt gox

 

[Thorn]

That is like the 3rd crash or so. And it not really crashing atm.

 

[microphone head]

People are still being goxxed from beyond the grave apparently...

Alleged MtGox code leaked on IRC node by Russian Hacker (several other docs leaked as well) : Bitcoin

 

[netbert]

The schadenfreude truly continues to deliver in spectacular fashion.

Hackers break in and gain access to MtGox PHP source code, audio of a conversation between Mark and a Japanese bank, a full database dump, and the verification data of the users that was supposed to be deleted (scanned passports, IDs, utility bills, etc). That possibly means users' bank account routing details as well.