The Inside Story of Mt. Gox, Bitcoin’s $460M Disaster
wired.com
wired.com
> Mt. Gox, he says, didn’t use any type of version control software — a standard tool in any professional software development environment. This meant that any coder could accidentally overwrite a colleague’s code if they happened to be working on the same file. According to this developer, the world’s largest bitcoin exchange had only recently introduced a test environment, meaning that, previously, untested software changes were pushed out to the exchanges customers — not the kind of thing you’d see on a professionally run financial services website. And, he says, there was only one person who could approve changes to the site’s source code: Mark Karpeles. That meant that some bug fixes — even security fixes — could languish for weeks, waiting for Karpeles to get to the code. “The source code was a complete mess,” says one insider.
Will you analyze all their processes? And for how long? At which point will you decide it's "satisfactory"? Will you account the cost of the analysis in your process?
If the source code is in a language you don't understand, what will you do?
If you go down the rabbit hole, it's endless.
I am sure this story is going to get much weirder before it sees any semblance of sunlight or truth. And it might take many years for that to happen.
"seated, inexplicably, on top of a blue pilates ball" really irked me, because its not inexplicable. The guy probably has back or circulation problems, give him a break instead of giving him crap for every last detail of his life. There's more than enough to critique about the fact that he ran the largest bitcoin exchange into the ground.
http://www.youtube.com/watch?v=LLjlOw3TVc8#t=1m10s
If you are trying to project that you are the CEO of a stable financial institution, having a lot of people say, "What the hell is he sitting on?" is not the best PR strategy.
http://www.corechair.ca/wp-content/uploads/2013/03/google-ex...
Early on, Google did a great job of creating a young, hip, fun image. They wanted people to like them. Miracles and wonders, all from these slightly goofy Californian eggheads!
But that's not the kind of image you want to create for a financial trading platform on which you want people to deposit lots of money and feel safe. You could go brilliant and edgy or respectable and serious. But goofy? Nope. I can't imagine he had a PR person there for the interview. Just another sign that he wasn't qualified to run a billion-dollar business.
A lot of bitcointalk users make mention of their wealth in general conversation, believing that their pseudonym protects them physically. It's not unreasonable to think that somebody who has lost a large amount of funds might act irrationally and decide that stealing from or threatening a prominent Bitcoin community member is a solution.
I'm speculating of course, but I would be very scared if my more of my information than my email address had been in that leak.
As a theoretical parallel, imagine if a small island nation decided to reimagine themselves as a hub for international banking. They loosened regulations, provided incentives for banks to open up there, and generally tried to disrupt the world of money movement.
A bunch of banks open up there, of varying levels of quality. One takes the lead, becomes the most visible brand among the worldwide public, and then gets robbed of all of their depositor's money. Not only does it get robbed, it turns out that their security was stupidly lax.
Yes, that lead bank is the one that actually screwed up, but in what world isn't that going to reflect poorly on the entire island banking system? Or at least, how is it not going to inject an element of fear into the entire model?
You are right in saying it’s not a BitCoin disaster: it will trigger massive changes in the currency, just like Silk Road’s closing has triggered a legitimation of the tool.
As for rhetoric: all publicity, even bad, is legitimation this is a worthy interest to look into; business magazines like blood, but their prefer victory in adversity. I promisse that you’ll have enough “How we step out of MtGox rumble and built a competitor to Visa” soon enough. Remember ‘Web 2.0’? that actually was the shortest version of that story, told by O’Reilly. You’ll have a similar catchy name for what BitCoin will become soon enough; my money is on an international payment system with lower fees. The tax-avoidance angle was as lame as only ultra-liberalitarian can be; the drug angle seemed to have missed both the decriminalisation trend, and the whole ‘Every transaction is recorded forever, publicly’ part of the protocol; the funky price chart is a sin of youth. It could become a (long-term) reserve for value, that has been the secondary angle through-out, but I don’t see it: I believe that should remained reserved for ventures, talent and fine wine.
It is wholly Mt. Gox's disaster, in the sense that they alone caused it and are responsible for the consequences.
It is Bitcoin's disaster in the sense that these events impact the Bitcoin ecosystem, and are (could be) a disaster for Bitcoin adoption as a whole.
But a lack of regulation still doesn't make this Bitcoin's disaster. You're doing a great injustice to those of us that did lose money to assign blame to any party other than Mt. Gox.
Those who forget history are doomed to repeat it. Do some reading on what financial life is like for most people in a pre-regulation world. Presumably the post-regulation one wouldn't be terribly different.
One could imagine a world where the government doesn't regulate, it only provides guidelines that all people can use as a framework or template for the self-contracting they do with potential risk.
So what do people have to do to "be more cautious"? If both the biggest and smallest Bitcoin exchanges are getting ransacked, then what does cautious even mean?
This phase in bitcoin history would be less painful if there wasn't so much hype driving the price up. There's going to be a lot of bugs, hacks, and developers learning how exchanges actually work in the real world, so it'd be better for bitcoin if that maturity phase happened under calmer circumstances where less money was at stake.
He seems better suited for a role as CTO, though even that may be a stretch...
Knowing it would have a great deal of American users and that it would have to abide to rules, Mt.Gox overlooked this. Everything that followed only validated my decision to stay away.
US law is pretty clear on the fact that Mt. Gox is a money transmitter because Gox did, in fact, transmit money (that is, it had USD denominated accounts for users and distributed funds to other people from those accounts to other people at the direction of the account holder.)
> (you don't have to actually transmit money to be one, just things equivalent to money).
That might be true, but its irrelevant, as Gox (and any other exchange that exchanges a commodity for money, whether or not the commodity itself is also money) actually transmitted money, not merely "things equivalent to money".
If you're worried about what the courts have to say about the subject, it isn't debatable in the slightest. They're the ones who get to decide what the rules are, period.
If you don't care what a jurisdiction's courts have to say about the rules governing financial services, you really have absolutely no business offering financial services in that jurisdiction.
Long answer: http://www.pcworld.com/article/2095060/apple-removes-blockch...