My Conversation with Mark Karpeles of MtGox

[DKPMO]

Keith sounds like a smart enough guy; I won't call him a fool, but he's still a statist that just doesn't get free markets.

All your arguments are really amusing, but this comment is the one that really invalidates anything else you have to say. Keith is a libertarian, just like you, but unlike you he does not let wishful thinking cloud his investment strategies.

The key to any bubble (Bitcoin included) is to get out before the biggest fools. But sounds like you will be the guy from whose pocket the winners are going to get their cash.

 

[lukep]

..bitcoin is most likely going back to being a black market currency for drugs and guns.

Quoted for posterity.

When you learn how wrong you are, just remember that I said I wasn't guessing here; the incentive structure demands that bitcoin will continue to grow.

...the bitcoin community simply wouldn't allow for those changes. People within the bitcoin community constantly complain about security, and how it needs to be improved. All the while, all the security measures we could ever possibly want are sitting right in front of us. It's not like online security is a new concept. Those measures will never be implemented into bitcoin though.

You must be visiting some cry-baby, whiny-assed statist version of the bitcoin forum in some other dimension. The only person I see whining about security is you... Even victims of Gox's latest crash say that they only have their own stupidity to blame.

Keith is a libertarian, just like you,

So um; you don't know what the difference between a libertarian and an anarchist is?

I called him a statist. He is. I am not. Very simple concept to grasp.

The key to any bubble (Bitcoin included)

Wow, it's been like 3 months since I've heard someone outside of the media use the word bubble on bitcoin... Congrats.

So far, the word bubble has scared off the general public a total of 5 spikes... But never once was there a bubble, and never will there be one in bitcoin.

A bubble brings prices back to where they started. So if your asset is worth $1, and hype shoots it to $500, it was only a bubble when it comes back down to $1.

Even on a logarythmic chart, it still looks like this: /\

Here's a logarythmic chart of bitcoin:

See the difference?

 

[lukep]

I'm gonna just leave this here without attaching any bias to or against it...

Leaked Mt. Gox Document Linked to Consulting Firm Mandalah

 

[nickster]

1. Murika ain't the center of the universe. China's daily volumn still dwarfs us and they've got TWO exchanges that make MtGox's previous volume look like a newb.

And in here lies the biggest issue. If you think that America cannot ban bitcoin you can be sure as shit that China can. This is a country that has a mobile execution van.

I can tell from what you write that you have absolutely no experience in the financial markets and the fact that you are using words like "hostile towards bitcoin" its very clear that there is no talking to you as you are EXACTLY the same as those caught up in similar bubble frenzies in the past. Not being able to look at things objectively and getting emotionally attached to the asset.

As for your graph extrapolating past growth, cummon! Investment 101.

I can make a very good prediction here and put my neck on the line. By 2017 bitcoin will be all but a distant memory and you will not be showing your face on Wickedfire as you'll be too ashamed to.

Do I think crypto currencies are a good idea? Yes. Do they have a potential for the future? Yup. Will bitcoin last? Not a chance. Why? Because it is waaaaay too anti the powers that be, and at this point in time they have so much power that they can get rid of ANYTHING that doesn't serve their purpose, by legal or illegal means. It's just plain naive to think otherwise.

 

[mituozo]

Well indeed let's make it simple, would your family / friends have any actual advantage of paying with bitcoin instead of their visa / MasterCard / Paypal ?

If they do not receive the products they pay for with BTC, is their any phone number they can call to get their money back ?

Let's put this straight, here is a user profile done in Europe about BTC:

Why do u buy BTC ?

Investment and speculation (27%)
Avoid bank fees (21%)
Confidential Transaction (16%)
Sell my product easily (10%)
I am below 18 years old (10%)
Avoid tax (8%)
Anonymity (7%)

Most of mainstream user do not care about avoiding bank fees and confidential transaction but cares about safety.

Look why Taobao in China became so successful it's partially because Alipay offers a very high level of security and if your not happy with what you bought you can get your money back in no time.

Still a majority of internet users do not buy online because of payment safety issue. Bitcoin simply doesn't answer this problem. And thus the fact that transaction are cheap / free is not enough as added value for mainstream users.

I hope you get my point now.

Cheers

You look at it from the wrong angle (as do the LukeP's out there who want it to replace fiat currency).

Bitcoin offers a protocol for the cheap transfer of any denomination of money via the internet. As the industry matures and it (inevitably) becomes regulated people will be able to quickly exchange fiat for BTC and vice versa anywhere in the world. It then offers a massive opportunity for all kinds of things currently impossible on the web.

Consumer protection, insurance, etc can all be built in as services on top of Bitcoin. You could have consumer protection outfits for Bitcoin, which all reputable Bitcoin accepting vendors work with to enable chargebacks/disputes, for example. Browsers can have built in BTC wallets that allow websites to charge people per pageview (with their consent) for premium content.

Everyone that's viewing Bitcoin as an alternative to fiat is looking at it completely the wrong way. That's the anarchists dream, and is IMO far from reality. It's a "cash" for the internet, that services and new monetisation models can be built on top of.

As the industry matures, most consumers won't even have to be aware of BTC exchange rates. They'll just buy/do things in fiat and it'll all happen in the background. In the same way that you or I use the internet and most of us don't really understand how HTTP works. All it takes is for BTC to grow enough that the exchange rate becomes more stable and organisations can reliably hedge their BTC exposure.

(Also, replace Bitcoin with "the internet currency that becomes a success" -- I'm not naive enough to think it'll definitely be BTC that achieves this, but it's something the world desperately needs.)

 

[Kiopa_Matt]

You must be visiting some cry-baby, whiny-assed statist version of the bitcoin forum in some other dimension. The only person I see whining about security is you... Even victims of Gox's latest crash say that they only have their own stupidity to blame.

You even have Andreas on camera saying "we suck at security", which honestly, is bullshit. We're actually quite good at security. You and your bitcoin friends will never let it happen though, because you'll remain adamant on the anarchist vision of toppling the US and Chinese governments, instead of concentrating on what you should be -- making bitcoin a streamlined, instantaneous payment medium with virtually no fees / restrictions.

 

[dsm56]

You look at it from the wrong angle (as do the LukeP's out there who want it to replace fiat currency).

Bitcoin offers a protocol for the cheap transfer of any denomination of money via the internet. As the industry matures and it (inevitably) becomes regulated people will be able to quickly exchange fiat for BTC and vice versa anywhere in the world. It then offers a massive opportunity for all kinds of things currently impossible on the web.

Consumer protection, insurance, etc can all be built in as services on top of Bitcoin. You could have consumer protection outfits for Bitcoin, which all reputable Bitcoin accepting vendors work with to enable chargebacks/disputes, for example. Browsers can have built in BTC wallets that allow websites to charge people per pageview (with their consent) for premium content.

Everyone that's viewing Bitcoin as an alternative to fiat is looking at it completely the wrong way. That's the anarchists dream, and is IMO far from reality. It's a "cash" for the internet, that services and new monetisation models can be built on top of.

As the industry matures, most consumers won't even have to be aware of BTC exchange rates. They'll just buy/do things in fiat and it'll all happen in the background. In the same way that you or I use the internet and most of us don't really understand how HTTP works. All it takes is for BTC to grow enough that the exchange rate becomes more stable and organisations can reliably hedge their BTC exposure.

(Also, replace Bitcoin with "the internet currency that becomes a success" -- I'm not naive enough to think it'll definitely be BTC that achieves this, but it's something the world desperately needs.)

There was an article I read yesterday that was saying how online casinos can publicly reveal their ingoing and outgoing transactions via the blockchain showing that they are running their gambling outfits at the proper ratios of how much the house should win / lose. If a bitcoin casino can't show this, they are scamming you. It's pretty amazing stuff, and just another use of bitcoins that I'd never think of but can really change an industry.

 

[Thorn]

Here we go... (2-bit-idiot: the guy is the one who leaked the crisis document first)

The Two-Bit Idiot

What a read

"The latter seems likely, however, as one source believes that Karpeles knew about the pervasive damage of the transaction malleability attacks for several weeks and was engaging in an arbitrage scheme that leveraged the depressed Mt. Gox price to reap gains on other exchanges. This was allegedly happening well before the exchange’s breaking point this past weekend."

That alone will be good for Mark. He will have alot time in jail to lift and find nice new friends.

This is really Breaking Bad in nerd style.

 

[Firelead]

Here we go... (2-bit-idiot: the guy is the one who leaked the crisis document first)

The Two-Bit Idiot

What a read

"The latter seems likely, however, as one source believes that Karpeles knew about the pervasive damage of the transaction malleability attacks for several weeks and was engaging in an arbitrage scheme that leveraged the depressed Mt. Gox price to reap gains on other exchanges. This was allegedly happening well before the exchange’s breaking point this past weekend."

That alone will be good for Mark. He will have alot time in jail to lift and find nice new friends.

This is really Breaking Bad in nerd style.

This two-bit idiot needs to get his facts straight. Jon was responsible for the interview, not Fox Business: "Although Mt. Gox CEO Mark Karpeles would only admit that the leaked document was “more or less authentic” during an interview with Fox Business, I have confirmed that it was, in fact, prepared by Mt. Gox representatives."

 

[Dumbass]

Boy that is really an indication of strength that the price held up I've seen stocks go down 50 percent or more on news like this.

 

[Thorn]

This two-bit idiot needs to get his facts straight. Jon was responsible for the interview, not Fox Business: "Although Mt. Gox CEO Mark Karpeles would only admit that the leaked document was “more or less authentic” during an interview with Fox Business, I have confirmed that it was, in fact, prepared by Mt. Gox representatives."

Yeah, but fox (?) or was it someone else had written their news in a way you think they had done it... Jon is named but only one or two of the major news gave him full credits. Tells us alot about major medias, right?

That guy noted in a previous post he was speaking with a lawyer first before releasing that article (its in a post of him from yesterday).

Anyway, i doubt its a good idea to stick that deep as external in this envolving thing. To much money and problems inside. We talk about 300+ million dollar, that will make alot lawyers checking how they can get some extra money out of this.

 

[Thorn]

Boy that is really an indication of strength that the price held up I've seen stocks go down 50 percent or more on news like this.

This crisis is already priced in since 3 weeks. Most of the real traders understood instantly that their money was gone, only the usual crypto fanboys was thinking something else. But they are the majority on bitcointalk and such forums.

Without gox, bitcoins would be >800 i think and litecoin >20.
The prices was going in that direction as the gox news was coming in starting with withdraw hold.

I know it pretty good because i disabled my bot in the same hour. Was clear that you can't make money then on the 2h charts. For traders on the 15m charts this kind of flash crashes is gold of course.

 

[Grindstone]

Bitcoin offers a protocol for the cheap transfer of any denomination of money via the internet.

(Also, replace Bitcoin with "the internet currency that becomes a success" -- I'm not naive enough to think it'll definitely be BTC that achieves this, but it's something the world desperately needs.)

Dwolla. I get 5 figure payments that cost me a quarter. Money hits my bank account in 48 hours. Same for sending payments to teams of employees/outsources. Costs them 25 cents each, regardless of how large a payment.

But ommgerd, it's attached to a bank...banks are regulated...so statist. Much government. Very unanarchist.

 

[Dumbass]

This crisis is already priced in since 3 weeks. Most of the real traders understood instantly that their money was gone, only the usual crypto fanboys was thinking something else. But they are the majority on bitcointalk and such forums.

Without gox, bitcoins would be >800 i think and litecoin >20.
The prices was going in that direction as the gox news was coming in starting with withdraw hold.

I know it pretty good because i disabled my bot in the same hour. Was clear that you can't make money then on the 2h charts. For traders on the 15m charts this kind of flash crashes is gold of course.

Good point. Still a good sign, as the press/bashers have been at it for ever and this was good ammunition for their arguments.

The 1.2 billion dollar market cap could be considered fair to very high depending on your perspective. The small float (20 million which is the maximum and can never be diluted) makes it interesting, the current float must be pretty small, who knows the answer, I do not. The answer is all the available bitcoins that are liquid and can be bought or sold. My guess is that it is small- 5 million?

Small floats and high demand make for big price swings up or down which we have seen.

 

[Thorn]

Good point. Still a good sign, as the press/bashers have been at it for ever and this was good ammunition for their arguments.

The 1.2 billion dollar market cap could be considered fair to very high depending on your perspective. The small float (20 million which is the maximum and can never be diluted) makes it interesting, the current float must be pretty small, who knows the answer, I do not. The answer is all the available bitcoins that are liquid and can be bought or sold. My guess is that it is small- 5 million?

Small floats and high demand make for big price swings up or down which we have seen.

Yes, the market is very strong. In fact, nearly every normal trader will tell you that outside the crypto market only half of that bad news and events would have dropped their asset alot more. But everything has borders so the crypto market. We will see where the market goes. Its already slowly downtrending now after the first "gox is over" rally.

 

[droplister]

The smart contracts that are being coded into bitcoin are the real news. Here's what would make me full heartedly use bitcoin or another coin with these "smart" functions.

My domain is a .bit or something like it.
My website is backed up and the file is zipped somewhere but password protected.

I put a sell order into the system for XXXX coins and upon receiving XXXX coins to my address the buyer automatically gets control of the domain and the password for the website backup.

Even without the file transfer part, just the domain name part, it would be enough to have a no-middle-man transaction for a website sale. If you control the domain, you can be pretty sure you'll get the website to follow. And if that could be done for $10 versus 10%. Woohoo!

I'm skittish over the price of bitcoin because I think the price of these smart coins will come down to a fraction of whatever function they replace. Like if an escrow currently averages out to $100-$1000 per transaction. The price of an escrow-coin would be $1 to $10.

They're talking about using a system like this for car titles. You could do it with homes too eventually.

Or instead of paying XXXX coins. They could pay me cash in person and I would transfer 1 coin that's "marked" as the owner.

 

[droplister]

One of the talking heads of bitcoin has a nice phrase for it, "decentralized trust."

If you can put into the blockchain a sell order. The buyer can look it up and be 100% sure the transaction will occur. That's a big problems solved.

 

[Thorn]

What most people not get and what the media complete ignores is the fact, that bitcoin "on the internet" is just a protocol and code. And as that, it can be changed, fixed & upgraded.
As everything else technical related to the internet.

"Bitcoin" right now means bitcoin 1.0. There is no reason why we will not have bitcoin 2.0 which is fixing problems, increasing speed, adding features, etc.

Nearly everything you can read about bitcoins, even on bitcoin forums itself, complete ignores that. Because most people who use them are no devs.

 

[Benji49]

At Christmas time, Bitcoin was at $1000 and then:

1. The big market (China) literally banned it.
2. The biggest and oldest exchange (Mtgox) disappears taking all the monies with it.

And it drops to: $550 at this time of posting, according to Btc-e.

Now seriously. as somebody who has done small-cap investing for years and went through the great tech crash of 2000-2002, when companies had market cap for less than cash in their bank account, that is amazing. I mean with all the crap in last 3 months, bitcoin should be at $50, not $550.

For me, I see the fix is in.

(And yeah, I'm long. Of course).

 

[Thorn]

good read:
Unilateral Statement Regarding Mt. Gox from an Insider