Do you think Bitcoin is a safe store of value?

[SpecOps]

It's an interesting thing to watch and I kind of wish I had taken a punt on it when I heard of it years ago, even $100 or so and Id be a happy man now :)

 

I'd never put more than a token amount in it though

[constructive]

BTC now trades at $610 on BitStamp, $580 on BTC-e and $250 on Mt Gox.

 

Seems like an arbitrage opportunity if you think Mt Gox will survive.

 

http://www.investing.com/news/forex-news/bitcoin-plunges-50-on-mt.-gox-to-hit-usd230-as-troubles-continue-266646

http://bitcoincharts.com/charts/

[wachtwoord]

Only if you believe MTGox is still liquid. Looking at the price it seems like most don't. I wouldn't trust MtGox, they've been quite shady.

[constructive]

If Mt Gox (once the most credible Bitcoin exchange) can go down, taking all deposited money with it, why trust other BTC institutions? Are the Slovenian and Bulgarian legal systems going to protect your money any better than the Japanese legal system?

[DoddDisciple]

I don't know how much more secure it is, but I've only used Coinbase to get USD into BTC. At the very least, they're located in the US and venture funded, so perhaps there could be a class action lawsuit in case something happens.

 

At the same time, I have almost nothing in BTC. I've taken that BTC and split it up equally among any alts on the exchanges and am in buy and hold mode. I just hold the coins directly on the exchanges since otherwise, I'd have to setup more than 300 wallets. My risk is therefore in the altcoin exchanges.

 

However, just to show that the markets aren't as bad as you think, I held about half a BTC's worth of LTCs, and another 0.5 BTC that had already been invested in coins on one exchange. The exchange was hacked and they closed. However, they funded everyone's LTC orders at 85%, so a loss of 15% there. For the remaining coins, I was able to transfer their full amount to other exchanges. I had a group of coins that weren't currently on an exchange and I didn't want to setup wallets for them. I was able to sell the coins at a profit by using the online forums.

 

I have no idea if my strategy is good or not, but at least it's a strategy :P

[plato1976]

Don't exactly understand what's MTGOX 's "technical" issue :)

But it's taking them a long time to fix ...

 

I don't know how much more secure it is, but I've only used Coinbase to get USD into BTC. At the very least, they're located in the US and venture funded, so perhaps there could be a class action lawsuit in case something happens.

 

At the same time, I have almost nothing in BTC. I've taken that BTC and split it up equally among any alts on the exchanges and am in buy and hold mode. I just hold the coins directly on the exchanges since otherwise, I'd have to setup more than 300 wallets. My risk is therefore in the altcoin exchanges.

 

However, just to show that the markets aren't as bad as you think, I held about half a BTC's worth of LTCs, and another 0.5 BTC that had already been invested in coins on one exchange. The exchange was hacked and they closed. However, they funded everyone's LTC orders at 85%, so a loss of 15% there. For the remaining coins, I was able to transfer their full amount to other exchanges. I had a group of coins that weren't currently on an exchange and I didn't want to setup wallets for them. I was able to sell the coins at a profit by using the online forums.

 

I have no idea if my strategy is good or not, but at least it's a strategy :P

[jb85]

If Mt Gox (once the most credible Bitcoin exchange) can go down, taking all deposited money with it, why trust other BTC institutions? Are the Slovenian and Bulgarian legal systems going to protect your money any better than the Japanese legal system?

 

This is exactly why you do your due diligence.  If you were dealing with mt gox at any point in the last year, then its pretty clear you 1) either were aware that this could happen, or 2) you didn't due you due diligence.  Especially this early in the game, bitcoin is the wild west.  I personally am for the burden being on investors/individual and not some government agency to determine who to trust.  Sure a law suit should be brought against Mt gox is fraud or negligence is found, but either way..good luck getting your money back.

 

Due your research, find a reputable exchange and minimize the time that you hold coins on the exchange wallet (ie instantly transfer to a cold wallet where you are solely responsible for its security).  Ultimately holding bitcoins involves much less "trust" than holding other currencies.  Getting from fiat --> btc is a bit troublesome right now, but places like coinbase are fairly safe and if you move to cold storage instantly, then the risk is very small.  I have little sympathy for anyone who lost money in mt gox.  Sometimes you have to get burned and these cases will eventually make the public more aware/safe.  I would argue cases like this are necessary and beneficial over the long run.  (I lost over 30 coins a year or two ago b/c i stored them on an exchange wallet that eventually got hacked.  It wasn't a problem with bitcoin or the fault of someone else.  It was entirely on me.  lesson learned.)

 

Furthermore, why would you lump all exchanges together  together...bitcoin is decentralized so I believe your logic is flawed by saying "btc institution 1 = btc institution 2").  When Washington Mutual goes bankrupt does that mean so to does Wells fargo, simply because they both deal in US dollars?

 

 

 

[Liberty]

A crypto-currency for residents of Iceland, 50% premined to be distributed:

 

http://www.auroracoin.org/

 

Interesting what bringing currencies in the digital world can lead to.. They need to create one for Canadians, just in case it ever is worth anything.

[Orange]

http://motherboard.vice.com/read/watch-mt-gox-ceo-mark-karpeles-admit-the-bitcoins-have-disappeared

 

Mt. Gox is now officially bankrupt.

[beerbaron]

http://motherboard.vice.com/read/watch-mt-gox-ceo-mark-karpeles-admit-the-bitcoins-have-disappeared

 

Mt. Gox is now officially bankrupt.

 

Here is the official answer to the question:

Is Bitcoin a safe store of value?

 

[glow=red,2,300]NO[/glow]

[Liberty]

http://motherboard.vice.com/read/watch-mt-gox-ceo-mark-karpeles-admit-the-bitcoins-have-disappeared

 

Mt. Gox is now officially bankrupt.

 

Here is the official answer to the question:

Is Bitcoin a safe store of value?

 

[glow=red,2,300]NO[/glow]

 

The people who stole those bitcoins from Mt. Gox probably think they're pretty valuable  ;)

 

I see it a bit more as back in the day when someone stole your money from the bank, or the manager of the bank disappeared in the night with sacks of gold coins, and there was no insurance to protect depositors. Doesn't mean whatever currency was in the bank isn't a store of value, but it's definitely more of a Far West, you're on your own kind of world.

 

Glad I don't own any and don't have to deal with these headaches, but it's fun to watch from the sidelines.

[yadayada]

to be fair the mtgox fiasco was easy to see coming.

[Orange]

 

The people who stole those bitcoins from Mt. Gox probably think they're pretty valuable  ;)

 

Lol, there's a market for them. I don't think they are making a long term investment out of the Bitcoins that they stole.

 

I see it a bit more as back in the day when someone stole your money from the bank, or the manager of the bank disappeared in the night with sacks of gold coins, and there was no insurance to protect depositors. Doesn't mean whatever currency was in the bank isn't a store of value, but it's definitely more of a Far West, you're on your own kind of world.

 

FDIC insurance cleared up a lot of the problems associated with bank failures for consumers. There is no similar policy possible for Bitcoins since it is decentralized, and the holders are distrustful of governments anyway. Bitcoins are less than 5 years old, public perceptions are still being molded on crypto currencies. A couple more of these situations and Bitcoins are going to gain the wrong kind of reputation.

[DTEJD1997]

Hey all:

 

Does anybody know approximately what percentage of Bitcoins were stolen from Mt. Gox?  If there are $4 billion of bit coins, then about 10% of the market cap was stolen....

 

Secondly, it appears it was shoddy accounting/control standards at Mt. Gox, and not an inherent defect in Bitcoins that allowed them to get stolen.

 

Any way you slice it, this is a terrible setback for Bitcoins.

[Orange]

Hey all:

 

Does anybody know approximately what percentage of Bitcoins were stolen from Mt. Gox?  If there are $4 billion of bit coins, then about 10% of the market cap was stolen....

 

According to this article: http://www.forbes.com/sites/andygreenberg/2014/02/25/bitcoins-price-plummets-as-mt-gox-goes-dark-with-massive-hack-rumored/

744,000 of Mt. Gox's customer's Bitcoins were stolen, which is about 6% total. Mt. Gox themselves also owned 120,000 Bitcoins which were also stolen, so close to 7% of the total Bitcoin float was stolen.

[Aberhound]

How do you steal bit coins and get away with it? Every coin has a record of every transaction it was involved in. Only morons would steal something like that. I bet the coders who run the other exchanges will soon have software ready to instantly identify anyone who tries to fence the stolen bitcoins.

 

My guess of what happened is that mt. Gox developed short cuts due to too much volume and too little time and insufficient adaption with newer and better servers. It takes a lot of computer power to go through the transfer of the coin. The short cuts should be easy to identify. Probably the thief developed software to take advantage of the short cut. The main algorithm is constantly improved by the miners. Anyone with super computers good enough to break the algorithm does not need to lower themselves to theft. They would mine instead.

 

It will be interesting to watch technology in action. My personal view is that Bitcoin was created to accelerate the advancement of computer technology. There is a strong incentive to develop the fastest computers possible. There are likely US hedge funds with links to Silicon Valley exploiting this opportunity already. These groups have a strong incentive and the contacts in NSA to expose the thieves.

[yadayada]

there are bitcoin scramblers. For example the old silk road would function as a scrambler. You put bitcoin in, and you get different ones out.

[tng]

Does anybody other than me think that Mt. Gox has been a ponzi scheme for a long time? It looked really obvious to me once they started limiting withdrawals. It's hard to imagine that they would continue operating if bitcoins were slowly being stolen from them. Also, hackers should not be able to get to the bitcoins in cold storage that are disconnected from the network. Also, if the leaked documents are true, there seems to be about $20 million in missing cash too. If all the bitcoins are stolen, they should be able to return the cash in the accounts, because hackers cannot get to the cash. I don't think that will happen.

[ukvalueinvestment]

It seems that Bitcoins are going to die before the mania gets to the size of the Tech or Tulip bubbles.

 

Good.  The whole concept was utterly ridiculous.

 

[wachtwoord]

It seems that Bitcoins are going to die before the mania gets to the size of the Tech or Tulip bubbles.

 

Good.  The whole concept was utterly ridiculous.

 

Haha, I'm definitely saving this to quote you later ;)

[rkbabang]

It will be interesting to watch technology in action. My personal view is that Bitcoin was created to accelerate the advancement of computer technology. There is a strong incentive to develop the fastest computers possible. There are likely US hedge funds with links to Silicon Valley exploiting this opportunity already. These groups have a strong incentive and the contacts in NSA to expose the thieves.

 

Speaking of powerful computers the worlds most powerful super computer might be built in Oregon in order to game the foreign exchange market.

 

John Fitzpatrick is forming a company to make an Exaflop computer this year using 1000 megawatts of power, costing $50 billion and using Intel processors

 

"He will use foreign currency trading as the main application. This is the Bitcoin mining of the Foreign Exchange market The machine will cost $50 billion. Financed with short term notes."

 

[DTEJD1997]

Another bitcoin exchange just closed it's doors.

 

Apparently somebody stole every bitcoin at the "Flexcoin" exchange.

 

Effective immediately, they are closing their doors.

 

If every coin has a custody chain, can't stolen coins be cancelled?  Or at the very least point out who stole them?

[jb85]

Does anybody other than me think that Mt. Gox has been a ponzi scheme for a long time? It looked really obvious to me once they started limiting withdrawals. It's hard to imagine that they would continue operating if bitcoins were slowly being stolen from them. Also, hackers should not be able to get to the bitcoins in cold storage that are disconnected from the network. Also, if the leaked documents are true, there seems to be about $20 million in missing cash too. If all the bitcoins are stolen, they should be able to return the cash in the accounts, because hackers cannot get to the cash. I don't think that will happen.

 

Its been very clear to anyone following bitcoin that they were at the very least having issues.  No one doing even a minimal amount of research should've been investing with Mt Gox.  My personal feeling is that the Gox CEO lost/had stolen 200K+ bitcoins in 2011.  Since then he has been running a sort of fractional reserve system with the gox coins...trying to makeup for the 200K lost coins via fees.  In theory he could've pulled this off but it would've required much more price stability and deposit withdraw stability than actually occurred.

 

[tng]

 

Its been very clear to anyone following bitcoin that they were at the very least having issues.  No one doing even a minimal amount of research should've been investing with Mt Gox.  My personal feeling is that the Gox CEO lost/had stolen 200K+ bitcoins in 2011.  Since then he has been running a sort of fractional reserve system with the gox coins...trying to makeup for the 200K lost coins via fees.  In theory he could've pulled this off but it would've required much more price stability and deposit withdraw stability than actually occurred.

 

 

I think when cash went in, they simply pocketed it. That is why there is a $20+ million net cash deficit (this part is completely unexplained so far, and not many people seem to be picking up on it). They didn't buy bitcoin with it, they just made gox coins. When people put bitcoin in, he pocketed most of that too, they got gox dollars that they couldn't withdraw without an extended wait period. Of course, when people started getting suspicious that they can't take their cash out quickly, they started withdrawing bitcoin to try to get money from other exchanges or dealers. I think Mt Gox artificially raised their quoted price of bitcoin to get more people to deposit their coins with them to keep the ponzi scheme going, because the only reason why people still used them was because they had the highest quoted price. Smarter people took a haircut to get their bitcoin out to cash out at other exchanges/dealers at lower conversion rates. When the news headlines said bitcoin was trading at $1000, that was the Mt. Gox price that nobody could actually cash out at. At some point, when people started getting suspicious, they started taking all their bitcoin out and ironically it was running out of bitcoin that blew them up (they could blame government intervention or money laundering laws causing the delays in money withdrawal, but they can't make up any excuse for delaying bitcoin withdrawal).

 

The crazy thing is, I think he's going to get away with it. The U.S. doesn't care because Mt. Gox is located in Japan. The Japanese doesn't seem to really care as most of the people who lost money were Americans, they've only recently started to "investigate" due to all the news headlines, so they have to look like they are doing something. And I bet it is impossible to pin any crime on Mt. Gox because if they are unregulated, they don't need to keep extensive records. Stupidity and incompetence isn't a crime, and that is the story they are going with right now and nobody can prove them wrong. I actually wouldn't be surprised if he ends up launching Gox 2.0 and the same thing happens again.

[tengen]

Does anyone still believe in bitcoin?

 

I was skeptical from the start (my 'no' vote in the poll was recorded at the height of the mania). However, I think the concept is still very interesting and we might see some new crypto-currency emerge to take bitcoin's place. The thing is that I can't see it having more success unless there is some regulatory environment to keep the fraudster's in check.