Bitcoin Builder: Trade “MtGox” BTC and “Real” BTC (and back) | Hacker News Reader

Bitcoin Builder: Trade “MtGox” BTC and “Real” BTC (and back)

bitcoinbuilder.com

48 pointsshayanbahal57 comments

Wow, there's no doubt there's a desire for this sort of service but what they're asking to get an account rolling is nuts:

- Full Legal Name - Full Home Address - Social Security Number - Date of Birth - Picture of Govt ID (driver license, etc)

How desperate do you have to be to give up this information to an unverified site?

Bitcoinbuilder.com is founded by Josh Jones, the co-founder of DreamHost. You can trust he is legitimate.

:) sure. let me just build a site right quick and link to some random person's LinkedIn profile. I bet I could get a good 12 hours of yokels using it before it was remedied.

If it's truly Josh Jones of DH, he is not instilling too much confidence. He's even piggy-backing on CloudFlare's SSL... at the very least, he could have opted for an EV SSL that showed that some certifying body truly checked out the individual running the site.

This smells scammy... real badly.

"some random person's LinkedIn profile" which has 218 connections and explicitly states "Dreamhost" under "Previous" and "Bitcoin Builder" under "Current"?

Meanwhile, I'd trust CloudFlare to shut down a scam more than I'd trust any CA to do so. EV certificates are the scam.

Uh, you know that CloudFlare has been used in the past to issue fraudulent unverified SSL certificates, right? That's what happened to Bitcointalk.org, CloudFlare signed a certificate for the domain after it was hijacked so that the attacker could MITM the site.

The point is that linking to a LinkedIn profile proves nothing, there needs to be cross-referencing.

http://www.linkedin.com/in/tlytle

See? I'm Larry Page.

http://www.linkedin.com/pub/josh-jones/3/91a/44a

It does have cross-referencing. See:

> Founder at Bitcoin Builder

As I already said in the very comment you're replying to, and as vertex-four pointed out again, it is cross-referenced.

And several CAs are known to have signed fraudulent SSL certificates. I suspect all of them actually have, but not all have been publicized. If you think this makes CloudFlare less trustworthy than them, I really don't know what to say other than you're crazy.

It was meant to be in agreement but incredibly badly written.

Jesus, you guys are paranoid and don't do any research. This site is way legit.

I've personally talked with Josh about bitcoinbuilder. See that link at the top for Political Donations? This is the same site that Josh built for Jeremy Hansen's bitcoin-fueled political campaign, which is linked all over the web:

http://bitcoinmagazine.com/2517/bitcoin-usage-for-political-... http://watchdog.org/119342/the-bitcoin-politician-who-wants-...

Josh has been talking about this on Bitcoin forums, he started running a similar GoxBTC-RealBTC exchange MVP-style with emails and manual processing earlier.

And about looking legitimate: Very few cryptocurrency sites look professional. It's fascinating to note how much polish a typical iPhone app needs to succeed, compared how the total lack of polish of cryptocurrency sites doesn't seem to be an issue for users.

> This smells scammy... real badly.

It's his site - here he is on CNN talking about it: http://money.cnn.com/2014/02/20/technology/innovation/bitcoi...

Thanks for the link. I don't know that I would have considered using the site without the vouching of HN users.

Oh well, call me paranoid.

The site has been around for a while. I already had an account on it from last year, because it has a nice tax calculator.

It does seem weird, but it also makes sense.

On first glance, this appears to be a type of meta-exchange specific to the circumstance of speculation on Mt. Gox's solvency and actual legitimacy.

If this is a serious service, there is reason to require this information to offer legitimacy.

Collection of this information is typical of exchanges to follow presumed KYC (know your customer) guidelines for exchange of Bitcoin for fiat. [1]

I think this is a very interesting move to claim "Gox" Bitcoin is separate the rest of the Bitcoin market.

If you don't follow the Mt. Gox saga closely, you might also be interested to know that one week ago Roger Ver (prominent Bitcoin advocate) offered to purchase Mt. Gox BTC from folks trying to exit that marketplace. [2]

From my perspective, some reasonable amount of KYC is necessary to offering a service that does this.

I commend Josh for building this. The situation Bitcoin is facing with Mt Gox right now is totally new territory. Bitcoin Builder seems like a creative hack around a real problem in the Bitcoin ecosystem.

[1] For example, Bitbox required this information for normal buy / sell orders on their website prior to pause.

[2] http://www.reddit.com/r/Bitcoin/comments/1xrmb1/roger_ver_a_...

Most Bitcoin exchanges do this now. It's pretty standard anti-money-laundering KYC stuff.

It's apparently required by US financial services regulations, and Bitcoin services in the US that trade US currency must collect this information.

Why, I'm not sure. You'll have to ask FinCen (http://www.fincen.gov/)

This is an example of responsive design gone horribly wrong. Try it at various different resolutions. I first experienced it at about 860px wide, and it is badly broken at that width. There's a range of widths of about 150px which are very difficult to use. (Then there's the contents of the BTC Builder's bubble, absolutely positioned in pixels although the image may shrink, but that's just ugly and not debilitating.)

Please, people: just because you're using a framework that does some responsive things doesn't mean it absolves you from the task of ensuring that it works properly at different resolutions. Responsive frameworks are deceptive.

Having done a number of projects with responsive or adaptive design, most people really pick a series of widths to optimize to because that's the natural resolution of those devices.

For instance, you'd optimize from around 900px to 1050px to capture all modern smartphones. Then say optimize up to 1440px to capture mid-resolution desktops.

I'm not saying that's what they did here, but when you do this kind of optimization there's small windows where a desktop user can resize their browser to make the site appear broken. A little larger and it fits perfectly in the large screen model, a little smaller and it fits perfectly in the small screen model.

True, but you have to check each of those break points to make sure things are a-ok.

It's not a good idea to allow it to be broken at any size. In any design that I implement, I deem unacceptable a solution that appears broken at 400px wide, and similarly unacceptable a solution that is unusable at 300px wide (minor layout breakage is permitted and a fair amount of horizontal overflow is acceptable). Yes, really. It is possible, and typically not difficult. As an example, my own website is moderately ugly at 250px wide but is still entirely sound and usable. (I could still improve it by reducing the side margins at such a small size.)

Seriously, use a tool like Firefox's Responsive Design View (Ctrl+Shift+M on Windows/Linux) to conveniently verify that the design really works at all different sizes. It's a great tool and helps you to experience all the different sizes easily.

(Note also that I'm one of these 16px-is-a-good-default people who shuns 12px or 14px body text; I have seen some people shrink their text size well below that on mobile to fit in more stuff, and this is my advice on that matter is a resounding don't do it! Start with legible text and then fit your layout around it. Doing it the other way is a Very Bad Plan and will severely hinder the usability of your website/product.)

Can't wait till people start selling bitcoin-backed CDOs.

Haven't you learned anything from the last crash?

Doing that basically caused our economy to collapse for several years. Instead, you should do it in a safe way, like with cubed CDOs that contain slices of Bitcoin, LiteCoin and Dogecoin, there is no way that can ever go wrong.

"there is no way that can ever go wrong"

I just love this assertion :)

If history were to repeat itself, this could be an excellent reverse pump-and-dump.

1. Create an exchange for trading Magic The Something. Use Bitcoin.

2. ???

3. MtSox has become the largest Bitcoin exchange ever. USD exchange for the moon.

4. Create an internal account, as all using the exchange have coins held with the exchange, including internal accounts.

5. As rumours of insolvency arise, offer progressively declining ratios of 'MtSox' held Bitcoins vs 'Real' Bitcoins. Exchange privately held 'Real' bitcoins for larger amounts of 'MtSox' Bitcoins: 'Real' Bitcoins hit the transaction chain, and a MtSox internal transfer is made to the internal account.

6. Sometime in the future it emerges that MtSox was never insolvent, but by transactions in the actual Bitchain, the internal MtSox account has now accumulated a large number of Bitcoins for a fraction of their 'Real' value.

Profit! (With only a little ???)

Bitcoin builder only pays out BTC once per 24 hours (apparently it's manual), it also doesn't have a lot of liquidity (e.g. selling 1000 GOX there would drop the price to half what it currently is).

People looking to make a profitable goxusd->goxbtc->btc->bitstamp usd chain of trades should probably do an OTC trade on IRC on freenode #mtgox-otc: http://webchat.freenode.net/?randomnick=1&channels=mtgox-otc

For those of you interested in a similar trade with bitcoins but without assets in Gox, you can list or buy a contract on the BTC price ratio between Gox and BitStamp. Takes 5 minutes, no login needed and secured by multisig https://www.cointures.com

Can someone explain to me what "MtGox BTC" is ?

Exactly what it sounds like - BTC trapped in Mt Gox.

It's a Bitcoin stored in your MtGox Account, as opposed to your own wallet or another exchange. MtGox make be experiencing solvency issues right now, and you are unable to freely transfer Bitcoins in and out of your account there. Some people believe that they might not actually exist, and the exchange will default, which is why those bitcoins are now worth less. About 2/3rds less.

Previous to MtGox freezing transfers of Bitcoins in and out of your account, they had restrictions on the transfers of $USD in and out of your account - that resulted in the opposite situation, in which people who wanted to get their $USD out of the system, had to do so with bitcoins (which were, at that time, transferable) - they were therefore willing to pay MORE for bitcoins on MtGox, than other exchanges, just so they could somehow liquidate. This is why, historically, MtGox had a higher value for bitcoins - it was an artifact of customers betting that there was a solvency issue on the $USD in the system.

Everything about MtGox is a train wreck right now. Useful (if expensive of some) lesson in the importance of how far you can trust a centralized exchange for this type of activity.

BTC on MtGox are at a very low price right now because people are dumping them for (say) USD because they believe MtGox will go under and they have a better chance at getting USD from MtGox than BTC if that happens. Speculators are betting MtGox survives and buying up these discounted BTC (that perhaps could be worthless...) in the hope that MtGox eventually fixes their problems and allows withdraws so they sell them for a higher price.

These BTC might or might not exist since a bug caused some double spending on MtGox.

That's how I understand it.

http://www.pfhub.com/speculators-purchasing-rights-to-mtgox-...

has gox admitted any losses yet?

Nope, just speculation.

Which is a pretty stupid move really as getting USD out of Gox has been vastly more difficult than getting BTC out of them. I don't think Gox could have lost too many BTC to the recent 'transaction malleability' attacks (and even if they did I'm sure they have a ton of USD in the bank and would gladly buy back enough BTC to cover the losses at the ridiculously depressed current going price).

There are no bitcoin withdrawals on MtGox right now. It's a closed-system.

It's not unlike what a "Full Tilt dollar" was back when Full Tilt Poker and PokerStars (and others) where raided by the FBI/DoJ and had their .com seized and sited unavailable for some time.

Full Tilt didn't come back up for weeks... Them months. People on big poker forums would sell / buy "Full Tilt dollars" at a lower price than the real dollar price. People try to determine what's the probability that accounts will be able to unlock their funds: if you're thinking there's a p = 0.3 that Full Tilt will pay back their users (or that there's a 100% probability that they would pay back at $0.30 per Full Tilt dollar), then it makes lots of sense to buy other people's Full Tilt dollar / accounts at, say, $0.20 per "Full Tilt Dollar".

A MtGox BTC is just that: it's a BTC that may or may not be real, that may or not be paid back or that may be paid back, but not in full.

You even now have people buying MtGox BTC from other users at a lower price than the "real" BTC price (of course there's a issue of trust involved between users buying/selling MtGox BTC but that is another topic).

Regarding Full Tilt: all the players ended up getting paid in full. So people who bought Full Tilt dollar for way less than $1 per dollar made a very good deal.

For the little story (if I'm not mistaken) Full Tilt has now been bought by PokerStars and is operating again (but not in the U.S.).

MtGox has both "MtGox BTC" and "MtGox $". We'll see in a while if they turn out to be equivalent to 100% BTC / $ or 0% BTC / 0$ or something anywhere in between.

its a fake fake digital money, as opposed to real fake digital money

It's a tossup ("50/50"?) that Mtgox recovers, and then there's the risk that it'll crash as soon as it does. Is there any point in buying Mtgox bitcoin at this point, or would it just be throwing away money?

That's where the potential for speculation comes in. If you can buy Mtgox BTC and manage to extract it from Mtgox systems at some point in the future, you can make a lot of money by buying for Satoshis on the BTC.

On the other hand, if you buy these, MtGox never re-enables the ability to transfer the BTC they hold on your behalf into your own wallet, and then can't get someone else to take them, you're completely out of your original purchase capital.

I don't think anyone expects MtGox to survive as a major player after this, but if you can get it out of their systems and into your own wallet, 1 BTC that's currently in MtGox is as good as 1 BTC anywhere else. What's being speculated on here is the confidence that MtGox will at some point restore the ability for people to transfer BTC out of their system, and the confidence that people will be able to extract (at current exchange rates) at least 20% of their BTC held there.

Mtgox Bitcoin price is 5:1. If you really think the chances are 50/50 that Mtgox recovers, it's a good buy.

If mtgox recovers there will not be a crash, the price of bitcoin will skyrocket as people scramble to withdraw BTC by selling USD, since USD withdrawals are still pretty much impossible.

I think the chances of getting your money back are _significantly_ worse than 50/50 if you don't have money trapped in Gox count yourself lucky and move along. Betting on a Gox recovery at this point is like walking into a casino and putting a bet down on the the number 10. It is a gamble with odds stacked significantly against you.

This reminds me of the trade in Full Tilt Poker money while everyones money was locked for a year. I seen some sizeable accounts get sold around the table at 10 cents on the dollar.

So now we have meta-exchanges?

I wonder if buying up MtGox BTC would work as a strategy to claim damages in a lawsuit. Kind of like buying up low-value debt and then collecting on it.

If Mt. Gox actually does recover, it's going to be very bad for everybody else as people try to dump their Mt. Gox BTC as quickly as they can...

Why? People would just withdraw their BTC from MtGox-held accounts into personal wallets that they control.

Transfer your "trapped" Mt. Gox BTC to us... it actually works

Um how? Since mtgox isn't allowing btc transfers?

Read the FAQ. Transfers between MtGox accounts have never stopped working. https://www.bitcoinbuilder.com/faq.html

MtGox has internal transfers between accounts on their trading/accounting system. These are not actual transactions on the Bitcoin blockchain.

MtGox allows internal transfers.

GoxCoin Seller->Bitcoin Builder MtGox Account->GoxCoin Buyer

Bitcoin Buyer<-Bitcoin Builder Wallet<-Bitcoin Seller

Interesting way to capitalize on the Gox issues. Wonder how much volume this can do...

It can do the amount people are currently listing. So right now you can buy about 65 MtGox-bitcoins for 0.4 real bitcoins each (or less).

there has been 7177.7139292 BTC traded so far according to the trade history data (https://www.bitcoinbuilder.com/trades.php)

7578.94335978

So that's a profit of around 64.000 EUR

and counting.... 11640.4576238 BTC total of transactions so far

Well, if nothing else that's the end of Mt Gox.

Seems like a good use case for Ripple.

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