Borked Bitcoin bunker MtGox in administration: Lawyer seizes control

At least this time it won't be the normal stooge of J Random Taxpayer, aka you and me...

“Believed by whom? Who would take over the tainted MtGox brand *and* sacrifice a slice of any future profits they manage to carve out to the current creditors?"

Who spends huge wads of money on a photo sharing site or messaging platform, both of which make a loss?

My conspiracy theory for the day is that Mr Karples didn't lose all those bitcoins. He saw, to his horror, that his exchange was making a profit, so he ran a multi-pass disk wipe over the bitcoins in order to make MtGox a more attractive buyout target for Facebook. So Mr Karples could be free of this running-an-exchange thing and turn his attention to more important things, like drinking mohitos on some warm carribbean beach.

Who gets compensation?

1. The Administrators take a cut. Usually taking years to sort it out while putting in eyebrow raising claims for their time. The longer it takes the better for them.

2. The Taxman gets first dibs at anything outstanding.

3. The rest get what's left which usually amounts to about 2p in the £.

It already has, and has always been.

Trading cards are nothing more than coloured pieces of cardboard. It's only idiots that assign any value on them beyond purchase cost. Same goes for any "collectible" : the'"market" thrives on idiots dreaming themselves rich, and other idiots falling for it.

The actual value of a Bitcoin is the amount of 'leccy used to obtain it. any value above that is Hot Air.

Re: Lawyer named Kobayashi takes charge?

> "... actual name of MtGox owner is Kayser Söze."

Nah, that's the mystery dude behind bitcoin itself: "... and like that he's gone..."

Re: Lawyer named Kobayashi takes charge?

Came for this response

Re: Lawyer named Kobayashi takes charge?

Well, they *are* in Japan and Kobayashi is by no means an uncommon name there.

If he were a tricksy hobbitses, he would go by the name of Littlewood, Smallgrove or something along those lines.

Re: Mighty quiet ....

By its definitition, Bitcoin is not FIAT. It doesn't derive its value from any government or legislation, and relies instead on its scarcity (due to it theoretically being finite) to attain value.

Of course, once trust in a currency is gone, it becomes worthless anyway - MtGox is certainly the most trust-damaging event to date, but bitcoins are still trading.

Re: Mighty quiet ....

The price is steadily dropping. I think it dropped down to $400 the other day, but bounced back towards $500 again. However it's been in steady decline since the heady pre-Christmas days of over $1,000.

But that's the point. Those were only days. And not very many days at that. There seems to be a steady trade in the things still. So there's definitely a value there. There's definitely a continuing market. But it's a much smaller market than the hype suggests, and therefore I think the price will probably keep dropping back towards the $100-$200 range. Maybe much lower.

All this is assuming the exchanges are giving true information. It would be easy for them to hype the prices by posting false numbers - because transaction volumes are so low. Esepcially if they're willing to trade with their customers' funds (in the way Mt Gox were considering to save themselves). It would be an easy market to rig, either by trading or by fiddling the figures. It might even be possible to do some of that legally, as it's not a regulated market.

BitCoin is a FIAT currency

Unlikely. FIAT is an acronym for Fabbrica Italiana Automobili Torino, an Italian car maker.

On the other hand, fiat is a Latin word meaning "let it be done". Perhaps that's what you meant.

-A.

Re: @ Winkypop

"Are you suggesting that Bitcoins migrate?"

Not at all. They could be carried....

Re: in spite of all this

I hope this link works

That should give you a year's prices on Bitstamp. Which I believe is now the top-dog exchange. Prices managed to crawl back above $500 this week, although it looks like they're on the way down again.

There's several interesting things to note. Firslty is the most obvious. Trading volume was steady, along with price, for 9 months last year. Then suddenly things went bonkers in December - and the price spiked up to over $1,000. Transaction volumes have been higher since, although at least some of that will be customers moving from Mt Gox (and others), as Bitstamp hasn't been top exchange for all that long.

Since the peak, prices have been much more volatile, but on a clear downward trend.

What we need is an understanding of the Bitcoin economy. Someone should be measuring its GDP. That might help explain what's going on. There looks to be a steady trade in the stuff, so I imagine there's various people selling stuff online. At least some of that is drugs and computer crime type stuff. But also legit stuff. Would be nice to know the mix? Silk Road has gone down since the price spike, and yet that doesn't seem to have dropped trading volumes. So either something's taken it's place, or it wasn't as important to the Bitcoin economy as people were suggesting.

The next question is 'what's changed'? Has there been a sustainable change in demand for BTC? As an example that CryptoLocker malware was demanding payment in BTC. It hit the big time around the December price spike. So was that the cause? Which would drop the price when it goes away.

One thing that does seem to have changed is the volatility. $100 swings in a day are not unusual. It looks to me like prices fall on large volumes of trading (as one would expect) - and several of those correlate with particular bad news days. Mt Gox's travails, and the 2 big days when China was said to be clamping down on Bitcoin.

There are also often big price jumps. Could just be natural, or people seeing the price lower than recently so aiming for a profit. After all, most people are presumably paid in real money, and converting to BTC to buy stuff. So why not buy a few days early when the price looks cheap? But given how stable the price and volume often are on other days, I suspect that we're looking at people 'investing'. People like the Winklevoss twins for example. Either seeing BTC as cheap, so investing. Or ones who've already got a holding, so are buying in whenever the price drops. In the hopes of maintaining the value of their previous investments. Looks like a losing game to me, but then it's not my money.

All guesswork of course. It would be a great project for some economist, or PHD student. EVE Online employ/consult a couple of economists, as they try to run their game economy with fewer and fewer inputs, and rely on interactions between the players.