by, 25th February 2014 at 02:20 PM (244 Views)
well I suppose I should quantify it as lolMtGox.
Or perhaps as lol 'anyone who thought it would be a good idea to leave a major financial exchange in the hands of a company that started as a MTG card trading exchange'
Or perhaps lol 'anyone who thought that storing bitcoin (which anyone with half a brain would classify as a volatile investment) on an exchange rather than in a cold wallet was a good idea'
For those who aren't in the know, it was announced today that Mt. Gox (which had been the largest bitcoin exchange in the world) 'lost' (I'm putting lost in quotes) over 750,000 bitcoins (which is somewhere in the range of $450,000,000). More interestingly (to me at least), this number represents close to 1/16 out of ALL bitcoins.
There are two schools of thought on what happened to the coins.
1. If you're an idiot, you believe the explanation from Mt. Gox themselves that the coins were stolen from them. I won't go into the techie stuff behind it, but attacks like this ARE possible. However, it's naïve to believe that one of this size could have escaped notice long enough to bring around a heist of this magnitude.
2. The guys behind Gox themselves cashed out. This makes a lot more sense, given the fact that it's actually feasible for them to escape prosecution given the fuzziness of the law regarding bitcoin (due to it not being an actual currency). And with the fact that not everyone knows what bitcoin is, it seems fairly easy to cash out to the terms of a couple hundred million and move to some private island in the Caribbean where people probably haven't even heard of the Internet, let alone Bitcoin.
As someone who did some very minor speculation on Bitcoin recently (got in and got out and made like $100 bucks on it, really didn't feel like risking any more after doing some in-depth research on the matter), the fallout isn't personal. Yeah it sucks if you lost money on this, but it's a learning lesson about investing in such... speculative and volatile investments.
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