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  (Source: AP)
"We have to let it go. And then we'll buy more." says a Japanese investor after losing a tenth of his Bitcoins

It's been a stunning fall from grace for French developer turned business magnate, Mark "Magical Tux" Karpelès.  The CEO of Mt. Gox shocked the world of cryptocurrencies -- an unregulated secure digital payment system -- when his exchange announced this week that it would be closing for good.

I. Mt. Gox == Bankrupt

Seldom seen not wearing a T-shirt, a somber Karpelès spoke to the press in Japanese at a news conference at the Tokyo District Court.  Before he started he bowed deeply, a gesture sometimes used as a symbol of formal apology in Japan.  However, he even as he bowed the CEO had a hint a grin, leading doing little to settle his critics.

In his brief comments, he stated:

First of all, I'm very sorry.  The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact [of Mt. Gox's collapse] is the most important point.

Mt. Gox bows
Mark Karpelès bows to the press in apology. [Image Source: Reuters]

He then went on to paint a stunning picture of Mt. Gox's destruction which not only confirmed in some cases, the outlandish numbers that had leaked in recent weeks, but in some cases exceeded them.

Mark Karpeles
Mark Karpelès, CEO and owner of bankrupt Bitcoin exchange, Mt. Gox [Image Source: Reuters]

He claims that in total, over the last few years, a thief or thieves used a series of anonymous transactions to exploit a "weakness in [the Mt. Gox] system" known as transaction malleability.  That ongoing attack stole more than 99.9 percent of the Bitcoins Mt. Gox held -- including the Bitcoins it "owned" thanks to customer fees, and Bitcoins its customers had entrusted to it.

In total 7 percent of all Bitcoins in circulation are estimated to be stolen.  Users lost 750,000 Bitcoins (approximately $434M USD at current exchange rates).

Mt. Gox
[Image Source: Reuters]

Under the bankruptcy the Japanese court regards Bitcoin holders as investors-turned-creditors, indicating that they view Bitcoins as an investment, not a true currency.  That means if Mt. Gox had anything left, they could collect.  In total it estimates there to be 127,000 creditors (aka active accounts on Mt. Gox with money/Bitcoins in them), with an average value of $3,500 USD, or roughly 6 Bitcoins.  About 1,000 of the creditors were Japanese.

Karpeles in court 3 of 3
Mark Karpelès (second to left) address press at the Japanese bankruptcy court.
[Image Source: Reuters]

Mt. Gox and Karpelès claim that they also lost 100,000 of their own bitcoins, or roughly $57.85M USD at current exchange rates.  They also acknowledge a 2.8B ($27.4M USD) discrepancy at its accounts held with Baker & MacKenzie LLP.  It has yet to be seen whether that discrepancy is due to errors on Mt. Gox's side or the bank's side.

II. Will Investors Get Their Money Back?

One of the top questions is whether the supposedly stolen coins will be recovered.

Some have suggested that it could be an inside job -- that an employee at the exchange's Japanese offices with administrative rights or even Karpelès himself could have stolen the money.  If that is the case Karpelès kept a good poker face in court, sticking to his baffling claim that no one at the company noticed the deficit until almost all its Bitcoins were gone.

Bitcoin weathered
[Image Source: TechVibes]

Mt. Gox appears to have destroyed much of its digital data.  In a statement Karpelès told the press:

I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues.  Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information.

Previously leaked documents have indicated that he is shopping around Mt. Gox, looking for buyers to revive the exchange.  While it's questionable that Bitcoin enthusiasts would be willing to trust the site again, signs suggest that Karpelès believes that if the site changes its name (to gox.com), if he resigns as CEO, and if the headquarters moves out of Japan that some may return to do business with the refreshed site.

Mark Karpeles
Karpelès is reportedly looking to relaunch Mt. Gox, once its debts are wiped out.  If he's a scammer that could provide him an opportunity to stal yet more coins. [Image Source: Reuters]

In an email to Reuters he commented:

We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can’t tell much more for now as this also involves other parties.

If Mt. Gox does score any money, it could use that to partially repay its customers, though it would be somewhat stunning for it to gain the half billion it would need to repay them fully.

Mark Karpeles
Mt. Gox's Tokyo office [Image Source: Reuters]

 
In U.S. District Court for the Northern District of Illinois -- in Chicago, Ill. -- one creditor, Gregory Greene filed a lawsuit against Mt. Gox on Thursday.  Mr. Greene, who lost $25,000 USD, stated, "[Mt. Gox] failed to provide its users with the level of security protection for which they paid."

If it can be proven in court that Karpelès' Tibanne Comp., Ltd. was actively involved in the business of the subsidiary, Mt. Gox (which it appears definitely have been), it is likely liable for the losses [source].  Those losses could sink the investment firm and Shade 3D Comp., Ltd. -- the 3D glasses firm that Karpelès was looking to start up.

III. Tracking Down the Stolen Coins

On the other hand, Mt. Gox's liability could be eliminated or reduced if some or all of the stolen Bitcoins were tracked down and then regained through traditional means.


Manhattan U.S. Attorney Preet Bharara and the Federal Bureau of Investigation (FBI) are probing Mt. Gox's dealings and its transactions trying to determine whether the law was broken, and if so who did it.  The investigation is being spearheaded by the U.S. District Court for the Southern District of New YorkThe Bitcoin Foundation, the largest trade group for the currency has distanced itself from Mt. Gox and pledged to assist in the investigation.

FBI probe
The FBI is probing the Bitcoin theft. [Image Source: AP]

All Bitcoin transactions are securely logged in a global blockchain, which prevents users from fraudulently claiming to own bitcoins that they don't own.  So presumably logs of the theft from Mt. Gox are in there somewhere. 

To that end the FBI has ordered that Mt. Gox cease any distruction of files or documents in order to allow an open investigation to proceed.

The question is how to distinguish those transactions from legitimate transactions that Mt. Gox was conducting over the last three years.  Even if Mt. Gox were cooperative and authorities could identify the supposedly illegitimate transactions, there is no mechanism to reverse them.  The investigators would be forced to track them step by step until they reached some sort of identifiable endpoint -- e.g. the thieves cashing out their loot for real world millions.

Bitcoin catch me if you can
Authorities may never catch the Bitcoin thieves. [Image Source: DailyDot]

If Karpelès or another Mt. Gox employee indeed stole the coins, they might have damaged the business's digital records, making it virtually impossible to track down and prove which transactions were illegitimate.  Or even if Karpelès is telling the truth, the thieves could live in regions like Africa or Russia where extradition and/or collection were basically impossible.

Moshe Cohen, assistant professor at Columbia Business School in New York, says the investment community will be keenly watching whether the stolen coins can be tracked down.  He states:

This may be telling for the level of traceability of the transactions. Bitcoin has been telling us that it is more traceable than cash. The question is, how much more and is there the potential for real recourse in the case of theft.

Past investigations by Forbes and other publications suggest that one-off transactions using Bitcoin are indeed traceable, even if the user makes efforts to cover their tracks.  But tracking over 1 in every 20 bitcoins in circulation is a Herculean task that may be beyond anyone's capability.  In other words the thieves -- whoever they are -- may get away with it.

IV. "Don't Stop Believin'"

The theft is highlighting fundamental criticisms about Bitcoin.  Notably, some are pointing out that there's no guarantees of repayment like deposits of real currency in banks.  Second, some have even started to scrutinize the underlying concept of Bitcoin, such as its seeding of wealth to a small group of early adopters or the fact that it has built in deflation as there's no rigidly defined mechanism for Bitcoin to grow as the global economy does.  Critics have pointed out that due to the deflation and volatility even business who "accept Bitcoins" generally price their offerings in USD.

But angry as they may be at Mt. Gox, Bitcoin enthusiasts either aren't listening to the criticism on the currency, or are actively denying it.  Their sentiments can be summed up in a phrase by a classic Journey track -- "Don't Stop Believin'"

Bitcoin exchange
Bitcoin fans won't give up on their favorite investment. [Image Source: AP]

Ken Shishido, a Japanese Mt. Gox user who lost a tenth of his holdings, argued against suggestions that Bitcoin be banned or restricted, commenting:

Bitcoin has always been volatile and speculative.  It's too bad that this happened, but we have to let it go. And then we'll buy more.

In the early days of the automobile, there were traffic accidents because you didn't have traffic lights or pedestrian crossings.  But we didn't ban automobiles.

Roger Ver, another investor who lost a lot in the Mt. Gox collapse, echoes:

But the important thing to realize is that Mt. Gox is just one company using bitcoin. The bitcoin technology itself is still absolutely amazing.  Even if one email service provider is having a problem that doesn't mean people are going to stop using email. It's the same with bitcoin.

[You can't discount] all of the positive ways in which bitcoin is going to change the world ... if anything, it is kind of for the better of bitcoin that the irresponsible players are going out of business.

Bitcoins most die-hard users won't give up on the cryptocurrency until they lose their last Bitcoin.  The problem is the rest of the world may not be as accepting of Bitcoins' flaws as they are.

Sources: Reuters [1], [2], MarketWatch, Bloomberg



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Laughing all the way to the "real money" bank.
By AssBall on 2/28/2014 10:33:53 PM , Rating: 3
Bitcoins aren't the same as real money. If you invest in fake money you are getting scammed. I can't blame him for smiling after screwing stupid people out of their money. The popularity of Bitcoins is astounding. It is the biggest ripoff scheme since inflated gold investment.




RE: Laughing all the way to the "real money" bank.
By Nagorak on 3/1/2014 4:51:49 AM , Rating: 3
I agree. The whole thing is a complete scam and a ponzi scheme. Only the completely naive would believe that you can just create something of incredible value from nothing. Right now all that's propping up bitcoin is the "get rich quick" craze. It went from $100 to $1000 over the course of a few months, of course people flooded in. That would happen with any "investment".

Anyone who really got in early, if they're smart, would be rapidly liquidating their holdings (although they probably would have sold long ago). Any of the true believers who have "tens of millions" of dollars and aren't converting them back to real money as fast they can have bought into their own hype and will eventually end up with nothing.

If you read the posts of bitcoin proponents they come across as religious zealots. They're "changing the world", etc. It's all such utter BS.


By Camikazi on 3/1/2014 2:35:16 PM , Rating: 2
The same paranoia that would have made me liquidate a large sum of bitcoin once they hit 600$ is the same paranoia that stopped me from buying them in the first place. I saw this coming but I didn't want to get stuck with fake money so didn't buy, it is annoying :(


By rs1 on 3/2/2014 5:12:10 AM , Rating: 2
That's nice. But liquidating bitcoins at $600 wouldn't be paranoia, it would be good business sense.

The people who were responsible enough to do profit-taking at regular intervals still made upwards of 2000% returns on their investment, even after losing a good chunk in this mtgox fiasco.

Buying a highly speculative thing like bitcoins as an "investment" that you just let sit forever is stupid. Buying a highly speculative thing like bitcoin and managing it like the highly speculative thing that it is, is not.


RE: Laughing all the way to the "real money" bank.
By bsim50 on 3/1/2014 5:31:50 AM , Rating: 2
Agreed. As mentioned on the other topic, it costs around $5.5bn per year in electricity alone mining Bitcoins (excluding actual mining hardware costs) just to produce $1.13bn of new Bitcoins each year (10.5m Jan 2013 to 12.5m Jan 2014) @ $566.

Anyone want to buy a $10 banknote for $10 + $38.60 postage = $48.60? LOL. Same thing.

In fact, the entire sum value of all Bitcoins that have ever been mined is only $7bn (12.5m BC x $566). Global Bitcoin mining doesn't even pay for itself on a macro level after just 16 months worth of mining...

They've swung from one extreme (It's too easy for the Fed to print more money) to another even more delusional extreme (a permanently deflationary currency who total absolute value is an ever-shrinking fraction of the costs of producing it each year)...


By SPOOFE on 3/1/2014 2:49:35 PM , Rating: 2
But you're not taking into account all the cocaine and heroin and teenage hookers you can buy on the Silk Road! /s


RE: Laughing all the way to the "real money" bank.
By Piiman on 3/1/14, Rating: -1
RE: Laughing all the way to the "real money" bank.
By poi2 on 3/1/2014 10:33:01 AM , Rating: 5
you wrong, since 1945 US dollar is backed by bullet


By michael67 on 3/1/2014 12:43:43 PM , Rating: 2
Yep, and now a days by drones.


By w8gaming on 3/1/2014 12:33:21 PM , Rating: 2
US dollar is backed by the willingness of the US government to accept it as tax payment. Since some of the people have to pay tax, so it worth something. Other value of US dollar is derived from the willingness of other nations to exchange their goods and services with US dollars.

Similarly, Bitcoins derive its value from the willingness of drug and weapon sellers to exchange their goods with Bitcoins, at least initially. Then someone in Wall Street took notice and massively inflated its value.


RE: Laughing all the way to the "real money" bank.
By Flunk on 3/3/2014 2:09:44 PM , Rating: 2
Surprisingly accurate, a good example would be how cocaine is used as currency in Columbia.

Commodities have value because people want to buy them. Currencies have value because companies and businesses accept them.

Gold, being a commodity is only worth what people want to pay. If for example, we find out that exactly 10,000 miles under the earth's crust is a huge layer of gold world gold prices would crash. Same thing for if people decide gold jewelry is tacky and then it only has value as a raw ingredient for manufactured goods.

That's why gold or silver or magic beans are not the magical cure-all sure thing investment that some people claim they are. You never know what's going to happen, even in the near future. They're already talking about asteroid mining. What happens if we do that to the prices of elements that are rare on earth but plentiful in asteroids?


By mioko on 3/5/2014 8:16:00 AM , Rating: 2
Well 10,000 miles under Earth's crust would be in orbit, right?


RE: Laughing all the way to the "real money" bank.
By g35fan on 3/1/2014 2:15:59 PM , Rating: 5
No one has gotten scammed by "Bitcoin". People were scammed by a company, a faulty exchange, and we don't have all the facts yet. Madoff stole billions, was the USD faulted for this? No.

What a bunch of trolls on this site bashing what they don't understand. I just want to say that time will tell. The Bitcoin protocol and tech is here to stay, even if Bitcoin itself doesn't last. Do your own research and don't listen to these people.


By chrnochime on 3/2/2014 1:06:41 AM , Rating: 2
Yeah indeed time will tell, since there are now a crapload of other crypto currencies that's vying for attention. Bitcoin is but one, and you want to bet it'll win out against all of them, including the one that's part of VC investment by Google? You really want to underestimate Google? LOL


By Reclaimer77 on 3/2/2014 3:05:02 AM , Rating: 2
quote:
Madoff stole billions, was the USD faulted for this? No.


Why do you Bitcoin supporters insist on straw men and hyperbole such as this?

We're not saying Bitcoin is a scam because Gox blew up. Bitcoin is a scam because it's, well, a scam. It's a pyramid scheme.

The only people who can possibly benefit from a deflationary commodity (Bitcoin is NOT a currency) are those who acquired a bunch when the value was low. Who have now made a substantial gain. Everyone else certainly can't say the same.

quote:
Do your own research and don't listen to these people.


Research is the last thing you want people doing. How are you going to couch the fact that your dream-currency is going to cost them thousands of dollars in specialized PC hardware to obtain at this point, with NO guarantee they'll break even, much less make a profit?


By extide on 3/3/2014 3:34:56 PM , Rating: 2
Why do so many people call bitcoin a pyramid scheme? I mean are people really THAT un-educated? Are they really so dense to think that bitcoins have ANYTHING to do with a pyramid scheme?

Bitcoin is NOT going to go away, it is here to stay. It's use will only ever get more prevalent over time. It is unfortunate that so many people (choose to?) misunderstand what bitcoins are and how they work. You guys who think it is a pyramid scheme should do some research and learn about what it is, and what it is NOT.


By inperfectdarkness on 3/3/2014 9:39:14 AM , Rating: 3
Agreed. And yet, cryptocurrency still has no oversight, no means for financial review, no avenues of audit. So yes, technically not "Bitcoin's" fault--just a failure of the entire idea as a whole.


By pandemonium on 3/4/2014 4:51:28 AM , Rating: 2
Wrong, auditing functions are being utilized by several exchanges and money transmitters. This is the first thing you do when you look at the validity of such a business. See my comment below.


By pandemonium on 3/4/2014 4:49:31 AM , Rating: 2
Absolutely fact.

The problem is MtGox didn't report any of their financial transactions to any governing agency to diagnose fraudulent activity (e.g. FinCEN and OFAC in the U.S.A.). That's not a problem of Bitcoin, that's a problem of the exchange and the people that "blindly trusted" that businesses ethics (or lack thereof).

As you can see from current BTC prices, it's already behind us and I doubt it'll be as easy now to expect people to just trust their "fake funds" will be safe with businesses that aren't providing regulatory, financial administrations to look into each and every transaction.


By Lerianis on 3/1/2014 5:45:58 PM , Rating: 2
Hate to tell you this, but the USD is not backed by anything except "The full faith and credit of the United States" which as the downrating on our credit as a nation showed... other countries are skeptical of us right now.

So, the USD is a 'fake' money just as much as Bitcoin is in the real world and JUST as susceptible to Ponzi Schemes.


By Reclaimer77 on 3/1/2014 7:39:52 PM , Rating: 2
Throw the baby out with the bathwater, eh?

So your logic is, let's trade backing that's becoming less credible at a slow rate, for ZERO backing whatsoever.

https://quantiger.wordpress.com/2012/06/29/why-bit...


Sad
By TheDoc9 on 2/28/2014 5:39:28 PM , Rating: 2
So he:
-Lied to users for months
-Destroyed the companies documents
-Then there's this tv interview

This reminds me of White Collar for some reason.




RE: Sad
By superstition on 2/28/2014 6:15:34 PM , Rating: 2
Who doesn't love the smirks and grins?


RE: Sad
By Cypherdude1 on 2/28/2014 10:57:19 PM , Rating: 2
Why would anyone want to buy Bitcoins anyway? If you want to have an alternative to US Dollars, then buy US gold coins. The American Gold Eagle $50 gold coin is what you should be buying. Graded coins by PCGS or NGC might be even better. MS64 and higher are very collectable and appreciate in value.

This California couple is quite happy with their newly found US gold coin stash:
Saddle Ridge Hoard: Buried gold coin stash 'worth $10m'
http://www.bbc.com/news/world-us-canada-26349136
http://tinyurl.com/cnw-SaddleRidgeHoard


RE: Sad
By Reclaimer77 on 3/1/2014 9:48:05 AM , Rating: 2
I think the quotes at the bottom of the article, from "investors" who were flat out robbed, is proof you can have money and still be a complete idiot.

I mean just..wow.


RE: Sad
By FaaR on 3/1/2014 3:28:42 PM , Rating: 2
Most people inherit their wealth these days; while they may add to it over the course of their lives (largely by means of being born with a silver spoon stuck in one of their bodily orifices), they didn't actually create it in the first place. Their ancestors did that, and likely several generations or more at that.

So yeah, you can definitely be both wealthy AND an idiot...for a while at least, because you know of course what they say about a fool and his money.


RE: Sad
By chripuck on 3/3/2014 10:59:10 AM , Rating: 2
Stop spreading that crap. 86% of millionaires in this country are self made...

http://www.fidelity.com/inside-fidelity/individual...

We're not a country of rich = blue bloods, not even close.


RE: Sad
By chripuck on 3/3/2014 10:59:31 AM , Rating: 2
And yes, bitcoins are sketchy.


RE: Sad
By Keeir on 3/3/2014 9:04:05 PM , Rating: 2
Well, a few points

#1. The US is not the "world"

#2. They rely on self-identification. This is a problem. My parents who would meet this criteria would also not define themselves as "growning up wealthy". Yet they had thier education up to thier Masters paid for by thier parents... hmmm.

#3. 1 million is not very much. On the surface, it might still seem like alot, but getting an above average, but still obtainable job and making a few good real estate/investment choices will end up in meeting the criteria of this study. In world post 2000, where many places still have average home prices into the 500,000s+, I think "wealthy" term should start at more like 5 or 10 million, not a 1 million.

#4. Your reading a study advocating the "common" man to invest in stocks etc or a stocks etc business site.


RE: Sad
By Fritzr on 3/3/2014 9:00:55 AM , Rating: 2
They are happy because it is "free" money. No investment required, just cash out and pay the IRS a portion of the proceeds.

Real investors in gold first spend time & money to gather gold or just money to buy gold, then hope they can resell it when the price is higher. Of course those who buy at the top of each price rise are being unwise, but it is the "winners" who they are buying from that the reporters will interview and declare successful.

Gold is a speculative imvestment unless you are buying it for use in some form of manufacturing. Even then unless it is a commodity part that forms a very low percentage of the final product, you are speculating on future value.

Krugerrands are the major gold investment coin :)
Always look for the minimal difference between the spot price and markup+shipping+cost of resale. That difference is an expense you will never recover.


RE: Sad
By TSS on 2/28/2014 9:01:01 PM , Rating: 2
Yknow, this brings to light a big flaw in bitcoin's idea (not practicallity, i've said it before and i'll say again that it's a ponzi scheme, no need to go deeper into that). It is still a centralized system.

Bitcoin still relies on exchanges as the centralized distribution of the currency. Sure, unlike the "normal" fiat systems where the exchanges can print more of the currency (banks), bitcoin exchanges can't. But that doesn't reduce the power of control over the money the exchange has. What happened here could happen(and when you think about it, is happening) with any normal bank. It could spend or slush away all money in it's accounts, destroy the files, declare bankrupcy and the depositors are screwed.

It's really going to be interesting what cryptocurrency will be invented in response to this whole ideal. As much as i rant on bitcoin, i'm not against the underlying idea - a currency nobody controls therefor cannot be used as leverage against any specific group of people. One could see this situation as a parralel with the old napster situation, where napster was the central distribution of the "mp3" currency. Now it's time for Kazaa to arrive, followed by the bittorrent of currencies.

Meanwhile, while the future might still be bright, lets take a moment of silence for all of the coal burned to power this horrible idea of man. Wether the bitcoins stolen are recovered or not, we'll never get that coal back no matter how much we litigate.


RE: Sad
By The Von Matrices on 3/1/2014 3:04:54 AM , Rating: 2
Your argument about bitcoin (or any currency) being inherently centralized because of exchanges is not logical. Exchanges are only prominent because bitcoin is in its infancy and is not widely known or accepted by the general public. As more and more parties accept bitcoin directly, then exchanges will be less and less needed and will become a smaller and smaller part of the currency supply. Although exchanges will never completely fade out due to nations wanting to hold their own sovereign currencies, if you see the situation to its logical end point, the only time an exchange should be needed is to pay for government functions.


Walking Dead Man
By Lord 666 on 2/28/2014 7:29:22 PM , Rating: 3
Watch this guy have an "accident" or commit "suicide." Only a matter of time before he is knocked off.




RE: Walking Dead Man
By chizow on 2/28/2014 7:57:32 PM , Rating: 3
Sure, maybe if he helped rob Lufthansa. But this is just some internet nerd who robbed a bunch of other internet nerds of their e-piggy banks.

What are they going to do to him? Look disheveled holding signs in front of his office? Oh wait.....


RE: Walking Dead Man
By Cypherdude1 on 2/28/2014 11:40:18 PM , Rating: 4
quote:
Watch this guy have an "accident" or commit "suicide." Only a matter of time before he is knocked off.
There was never any attempt on Madoff's life. I was actually surprised no one attacked Madoff. People lost their homes, their families, some lost everything because of Madoff. The worst that ever happened to Madoff was some reporter shoved Madoff back because Madoff shoved the reporter. If Madoff stole $20 Billion, then I doubt there will ever be any attempt on Karpelès's life.


RE: Walking Dead Man
By michael67 on 3/1/2014 2:24:35 AM , Rating: 2
There is one big difference do!

Madoff stole from honest working people.
Mark Karpelès stole lost the money from, among other the Russian mob, terrorist, drug dealers/traffickers and other people that dont want there money traced.

Wonder how is more likely to retaliate?


RE: Walking Dead Man
By superstition on 3/2/2014 6:22:12 PM , Rating: 2
Michael Connell
Deborah Jeane Palfrey


RE: Walking Dead Man
By Flunk on 2/28/2014 9:57:52 PM , Rating: 2
Seppuku would be a socially-acceptable way to deal with the generations of shame he has brought upon his family. Who knows... maybe the Yakuza will do this one pro bono.


Could Cryptocurrency be NSA backed?
By Lord 666 on 3/1/2014 11:32:42 AM , Rating: 2
Have always wondered if crypto currency mining was actually a crowd sourced method of brute force cracking. Similar to SETI@Home or Folding, snippets of encrypted information is assigned per team, processed, and returned. It wouldn't cost the NSA much to fund this and even start different crypto currencies per foreign nation; say bitcoin is China code and Litecoin is Russia code or even Wikileaks.

By dispersing the processing to users globally, it increases the scale and invokes plausible deniability so the NSA isn't fingered.




RE: Could Cryptocurrency be NSA backed?
By FaaR on 3/1/2014 3:34:14 PM , Rating: 2
Only a truly ignorant, paranoid fool would ever believe something like that. Bitcoin mining is a well understood and described process. While I'm not sure about the status of the bitcoin source code, other scamcoins are open source or forked off of open source.

You could also just disassemble the bitcoin miner executable to find out what it does.

IE, it does not crack cryptos for the NSA. If it did, it'd be all over the interwebs in basically no time at all. Don't be a tard.


By kwrzesien on 3/3/2014 10:28:52 AM , Rating: 2
Maybe not, but it sure sounds like a good idea. Just take some funds recovered through crime and start a new crypto currency cracking codes. Hey at least the electricity would be spent on something productive...


no sweat off his back
By OS on 2/28/2014 8:32:17 PM , Rating: 2
I was looking at other articles/photos about this, that guy is obviously not stressing over losing half a billion dollars of his customers' money or whatever.




RE: no sweat off his back
By Camikazi on 3/1/2014 3:34:22 PM , Rating: 2
Because he didn't lose he, he appropriated it.


Incorrect perception
By Gondor on 3/1/2014 3:06:21 PM , Rating: 2
quote:
Bitcoins most die-hard users won't give up on the cryptocurrency until they lose their last Bitcoin.


Bitcoin suckers^H^H^H^H^H^H^Hinvestors aren't going to cling oto it until they lose their last Bitcoin; they will only do that until it plummets to its actual value ($0.00 per Bitcoin).

If you want a chuckle from this get-rich scheme you should read Douglas Adams' Hitchiker's Guide to the Galaxy, specifically the section where Arthur ends up on Earth along with all those phone sanitizers who just adopted tree leaves as the legal tender :-)




Mt. Gox == Bankrupt
By half_duplex on 3/2/2014 10:04:17 AM , Rating: 2
quote:
Mt. Gox == Bankrupt


Out.




not mount
By MamiyaOtaru on 3/3/2014 1:01:12 AM , Rating: 2
All these stories calling it Mt. Gox (as though it were short for Mount Gox) are giving it way too much credit. It's Magic the Gathering Online Exchange. Think about that for a moment. That's the organization people put in charge of enormous sums of money




He would laughs last
By euler007 on 3/4/2014 8:21:37 AM , Rating: 2
Given the links of bitcoin with criminal organisations (see: silk road), I would be smiling a bit less after stealing/losing 750M dollars worth of bitcoins from random people all across the globe.




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