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Comment by sillysaurus2 | Hacker News Reader

Sorry... I should have used the original title.

I'm still sort of in shock. I allowed myself to believe it was a good idea to store all of my bitcoin in mtgox, due to their One Time Password protection features.

Once I realized something was up, and realized that only small withdraws of <0.05 BTC were being processed, I spent the last 24 hours salvaging as much as I could. I was able to withdraw 3.4 BTC of my 9.2 total. There are still 0.65 in my MtGox account. The remaining 5.15 are stuck in "withdraw limbo" due to the technical problems. MtGox has set up a system to automatically refund all stuck withdraws exactly 7 days after they get stuck. So, hopefully 7 days from now I'll be able to withdraw the rest, if MtGox allows it.

I hope their Monday update will bring good news...

Once again, sorry about the original title.

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How does anyone thing doing ANYTHING on MtGox is a good idea? They've had enough issues that they've been verbed: Goxed.

I had to read your comment three times. 'Think' is the word your looking for.

This is kinda unrelated, but I seriously wouldn't feel comfortable leaving any sort of coin I didn't mind loosing on MtGox for any extended period of time. Armory (https://bitcoinarmory.com) is great for offline storage and is pretty straightforward to use.

Before you get too worried, it's likely more a technical problem with their wallet software than them not having the funds to spend. It seems to be that they are losing track of which inputs they have spent and which ones haven't, and everything is getting backed up behind a mound of transactions with unmet dependancies. No doubt they'll sort it out and be back to processing withdrawals again in no time.

Not sure how you can be so confident there's no other issue. I certainly hope you are right, though...

Historically, collapsing banks simply collapse all at once. There is no incentive to slowly unveil a fraud. The depositors might kill you.

Well if it were a ponzi scheme and they didn't have the assets they were supposed to, it would be in their best interest to convince people as long as possible that everything is okay.

That's exactly what could be happening here.

Not necessarily suggesting that Mt. Gox is a Ponzi scheme, but I can't help being reminded of certain events during the collapse of Bitcoin Savings and Loan:

https://bitcointalk.org/index.php?topic=50822.0

So many investors held out much longer that many might have expected, clinging to the belief that pirateat40 was true to his word, and that the Ponzi stench existed only in the minds of cynical observers.

In the end though, the last groups of investors lost almost everything.

Collapsing banks have very little choice. You can physically go to their branch and withdraw money (and historically everyone doing this at once has been one of the more common _causes_ of collapse), and if they stop withdrawals for no reason the regulators will be on them like a shot.

The regulators will also keep track of their reserves, particularly if there seems to be a problem.

None of this applies to MtGox; it's an unregulated company running in a country with very different law to that of the countries most of its customers live in.

Why is that scenario "more likely" exactly? Do you know something we don't? It's all a bit fishy. If my bank did this I would be livid (and yes, I realize that some banks have asked for a reason to withdraw large amounts of cash. Likewise, I would be livid.)

In July 2011, after the MtGox hack and price "crash", iirc MagicalTux sent a 424,424.42 (an amount suggested in IRC) transaction to prove control of the BTC funds. This time, we know they control the 60k+ BTC stuck in withdrawal because mtgox published the list of transaction hashes (and a lot if it is change going back to MtGox).

But he did also accidentally push a bad tx one time (6k BTC iirc), to an unspendable output.

Back then 6k was not all that much money. Now that's $4,200,000 lost..

There's also speculation that the spike in "Bitcoin Days Destroyed" (essentially sum of (transaction size * days since last spent)) today was MtGox bringing cold wallet online: https://blockchain.info/charts/bitcoin-days-destroyed-min-ye...

Forget the title, thanks for posting, it is the first I've heard of this. I moved off Gox in December and transferred my BTC to cold storage (paper wallets). I really recommend looking into doing something like that, it makes it easier to sleep at night. Hope you get the rest of your money out :)

No worries, and thanks for updating the post title.

I know plenty of people who have BTC and fiat stuck in MtGox. Congrats on getting at least a third of your holdings out. A bunch of people are looking forward to the MtGox update on Monday.

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