Hacked Bitcoin firm plans to spread losses across all users
cnbc.com
cnbc.com
Is it the exchange or is it a licensed bankruptcy trustee like www.pwc.com?
If things are above board then it almost by definition will be the later. If on the other hand its the exchange doing the haircut then you have to trust that they'll be honest about it....I mean with millions involved that's alot of trust.
I hope the exchanges assets are sold off first to help pay off the missing bitcoins because if the exchange is trying to force the loss onto its depositors and then keep running as a business then that's some really scummy behavior.
I'd assume the model would be Lehman brothers, force it into bankruptcy liquidate its assets, wipe out the owners so they don't benefit from their own mistakes and use the remaining funds to pay back creditors/depositors.
The current speculation is that they will continue operating, and issue coins that either represents equity or debt in the company to compensate customers.
More importantly, if I'm an unaffected customer and can swallow the "haircut", how do I know they won't be hacked again?
EDIT: As a customer getting a forced haircut, I would also expect the company itself to get an appropriate haircut.
This is theft, plain and simple. They lost some money now they are taxing their customers and making pay for their mistakes. It doesn't matter where the stolen money went, it's not up to the customers to bail them out.
It could be part of a liquidation. If Bitfinex owes more than it has, then it's going bust regardless. This is just a question of how its remaining funds are distributed amongst its creditors.
I don't see how they could intend to continue trading, since creditors could individually sue them for the funds that they are owed.
The FDIC only insures accounts to a certain amount. So, yeah, I suppose they kinda do this. But it's a known risk and the reason that you, as a consumer, don't keep values beyond the FDIC insured limits in any one bank.
That probably includes transferring to another BitCoin wallet.
> ... While we are halting all operations at this time ...
and:
> The first step is bringing the site online and allowing users to login and view the state of their accounts. Note that initially trading, deposits, withdrawals, and other core site functionality will be disabled.
At one point I was offered 25BTC for a weekend project. At the time, that was worth ~$20. I didn't take it.
I don't regret it either, it was a sound decision at the time, so I contend I only lost twenty bucks, not $25k.
But of course back then most people didn't know what the potential ceiling was going to be on them. $30 a coin was a ridiculously high price we might never see again at the time. I remember when it crashed after that and went down to ~$7 a coin and trying to get a few through some website, but having trouble getting the transaction to go through and giving up on it.
And I still remember when they were worth like 4 cents per coin, but it was almost impossible to get them since there wasn't a good way to buy them except from other people who had them, although it was possible to mine them from your computer back then.
Some people got very lucky -- which is great! But don't lament that you didn't do something that, at the time and without the benefit of hindsight, wasn't really rational.
You leave the computer on and you mined bitcoins (whole blocks, not just a fraction of a fraction of a reward from a mining group). I left the bitcoin software on for a single week back then. I could have left it on for a few months and mined like 1000+ bitcoins, but I only left it on for a week. I was excited about it too, and thought this could be the future of money, but even back then it didn't occur to me that the price of them would ever shoot up like that. So after a week I got bored and was like "I'll check it out again in a year or so once more people are into it."
You had to actively buy Beanie Babies (or request them as gifts), and sometimes wait in ridiculous lines for hours, etc. A closer analogy would be if someone sent you brand new Beanie Babies for free every week, as long as you said you wanted them.
Granted, you could have taken more active measures to acquire Bitcoin even back then (like that 10,000 bitcoin pizza, for example), but it doesn't require the amount of headspace that something like Beanie Babies would (hunting down the uniques, knowing how much each one is worth, etc). I never got into selling Magic:The Gathering cards even though I played the game for the same reason.
I'm not actually beating myself up about it, I'm just realizing the trajectory of my life would have gone a lot differently if only I let that software keep running several years ago.
On one hand, I wish I'd kept some (price was $30/BTC a few weeks later, then hit $1000/BTC briefly two years later). On the other, it more than paid for my new GPU, so can't complain too much!
That's correct.