MtGox had to code custom software to interact with the bitcoin network because of their size. They coded it wrong and allowed a bug that could (and did) wipe them of their money.
How is it the bitcoin network's fault?
How is it the bitcoin network's fault?
Because the protocol is broken with regards to tracking transactions and that has been acknowledged. Even the official implementation got it wrong. It needs to be fixed because the workaround just does not scale.
before they are included in the blockchain, malleability aside, they aren't even necessarily valid (they could be double spend attempts, etc)
That is nonsense.
My understanding of the problem is that some people went to withdraw money and due to transaction malleability MtGox thought the transaction failed and resent repeatedly. But the first transaction didn't actually fail and they received their money multiple times.
Whether this happened to a lot of people a little or a few people a lot, and whether they were accidental beneficiaries or intentional instigators will probably never be known. But some number of people received a share of that missing 750k BTC, and I don't recall a one of them posting a "Hey, MtGox just sent me more BTC than it should have" blogpost that ended up here, so that's pretty interesting.
So the BTC aren't missing so much as illicitly redistributed.
In a lot of software engineering, Good Enough really is good enough. But a 5 cent discrepancy between what you actually have and what you thought you had need to be treated as seriously as a $5 million discrepancy.
Not functioning technically but functioning pragmatically.
(honest question, I am an economic newbie)