Tuesday, February 25, 2014

Popeye Explains Bitcoin

From the New York Times:
Apparent Theft at Mt. Gox Shakes Bitcoin World

The most prominent Bitcoin exchange appeared to be on the verge of collapse late Monday, raising questions about the future of a volatile marketplace.

On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin’s existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft. A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation.

While Mt. Gox did not respond to numerous requests for comments, and the companies issuing the statement scrambled to determine the exact situation at Mt. Gox, which is based in Japan, the news helped push the price of a single Bitcoin below $500 for the first time since November, when it began a spike that took it above $1,200.

But at the same time that the news about Mt. Gox was emerging, a New York firm announced plans to create an exchange that could draw the world’s largest banks into the virtual currency market for the first time.

The new exchange is being put together by SecondMarket, which rose to fame a few years ago after creating a platform for buying and selling shares of companies like Twitter and Facebook before they went public.

Without the trouble at Mt. Gox, the SecondMarket plans would have been seen as a major boon for virtual currencies, providing a potential entry point into the Bitcoin market for large banks, which have so far avoided virtual currencies as their price has skyrocketed.

Barry Silbert, SecondMarket’s chief executive, said that he had already talked with several banks and financial companies about joining the new exchange, along with financial regulators, and that he hoped to have it in operation this summer.

But plans for any new venture will be tested by the collapse of Mt. Gox, which could shake the faith of early Bitcoin adopters. Ryan Galt, a blogger who writes frequently about Bitcoin and was one of the first to circulate the news about Mt. Gox, wrote on Monday: “I do believe that this is one of the existential threats to Bitcoin that many have feared and have personally sold all of my Bitcoin holdings.”

On Monday, Mt. Gox took down all of its previous posts on Twitter, one day after its chief executive, Mark Karpeles, resigned from the board of the Bitcoin Foundation, a nonprofit that advocates for virtual currencies.


Compound F said...

Greenwald hasn't seemed to notice you much, and yet he is kicking your ass. See his latest? I told you a while ago, you were fukking a dead dog. Tell us when you stop fukking that dog.



Kathleen said...

And this comment has what to do with the subject of the post?

Anonymous said...


Just more of the same old crap. "Blah blah blah, O-bot, blah blah blah, Droneglass, blah blah blah." After a while, idiots like CF tend to blend together into so much white noise.

Anonymous said...

Good to see progress is being made toward the next giant asset relocation system.
The one where the banks create a side market with bit coins, inflate the value, cash out several times (artificial value into real value).
Deposit that wealth into their own personnel accounts, and then crash the market: claiming huge "institutional" losses and tell the government that their institutions must be bailed out or the "actual" economy will collapse.
See: mortgage backed derivatives, junk bonds, ect...all the way back to the original side-betting Wall street parlors and the crash of 29 (and a few before that).
Buy up the corporations, rape the pension funds, sercuritize the mortgages, rape the 401 k's, and personal credit reserves.
The cycle of shoveling wealth to the top in massive ponzi schemes used to have decades in the middle, now it only has a few years....
Progress will indeed be made.

Oh and fuck you compound F...

CM said...

Guess the invisible hand stole the bitcoins.

Also sincerely hope all the libertarians had significant investments in bitcoins.

Anonymous said...

One day, far in the future, a silent majority will be silent no more.

Watch your throats, 1%, you walk the tightrope but we shall overcome. Your days of plundering our lives are numbered and you're all going to die.

Roger Ailes has right to fear, and remained well guarded. He knows what evil lurks in the hearts of men.

One day the chickens come home to roost, and the coop will never be the same again.

Remember what Marie Antoinette said: "ouch, that really hurts my neck".

Ric -from the land of Kurt Cobain

Anonymous said...

Jeez, who woulda thought that a make-believe currency would turn out to be a mirage?

Or as Popeye famously never said: "Olive, what are you doing in that martini?"

Anonymous said...

Once again Compound F demonstrates that the one thing that matters most to him is if Greenwald is getting enough respect.

Outside of the pathology of his followers, how does this topic involve Glenn Greenwald at all?

--Nonny Mouse

Anonymous said...

Bitcoin is hilarious. That said I've made a fair amount of cash off it selling them to morons. I just leave all my home servers and gaming machines mining the crap out of cryptocurrency (aka the tulip craze 2.0) when I'm at work.

Then I take the cash and use it to buy stocks and other items. My main investment is companies that are sucking up water rights now.

CM said...

**That said I've made a fair amount of cash off it selling them to morons. I just leave all my home servers and gaming machines mining the crap out of cryptocurrency (aka the tulip craze 2.0) when I'm at work.**

I assume you are joking here. But in case you are serious how does the economics work out here? I mean electricity and HVAC systems to run the servers are not free. Do you break even when you take these costs into effect? Or does it currently make sense because the libertarians still attach unreasonably high value to these bitcoins?

gratuitous said...

A business venture involving the Winkelvii that doesn't pan out? Hoocuddanode???

I just have trouble figuring out how some of these fools and their money got together in the first place.

JerryB said...

So things that don't actually exist in the real world has been stolen and real banks may get involved with things that don't exist in the real world?

Got it.

Anonymous said...

I more than break even. I don't pay my electrical bill, that's all covered under condo fees so fuck it. I never turn off my lights, arcade machines, computers, sound system, it all runs 24/7. It's not as crazy as it sounds because rent is crazy here (studios are in the 1400-3000 a month range and not big) so I'm not dealing with a house.

The only profit is because libertarians are stupid. So I run everything 24/7, ditch the crypto coins, and throw the cash into an IRA and various other investments.

Bitcoin (and the others there are more than one) are bubbles. You ditch at the right time and hope other morons are jumping into it.

As for the "how much money per watt of energy used" that varies. When the craze started it was easy to get a lot of them... now not so much. So unless you have the cash to buy rather expensive ASICs (they start around 3grand for the good ones and go up into the tens of thousands) odds are you won't get much.

Or, if you're a gamer like me, you have multiple 500-1000 buck GPUs you can mine other coins, convert those to bitcoin, then convert that to cash and invest in something useful.

I wouldn't advise trying to retire on it. But if you've got a few decent graphics cards sitting around why the fuck not?

Keep in mind bitcoins often trade for hundreds of dollars, and some of the most aggressive people work in groups. I've got 4 gaming computers with octacore xeons and triple GPUs (AMD 7870s and NVidia GTX Titans) so they can churn through a lot of shit fast.

Before I mined crypto currency to sell to idiots I let them run stuff like folding at home to do cancer research. Most techies do similar stuff and keep everything running full bore all the time.

n1ck said...

Shorter Compound Fuckwit: I'm an idiot.

Thanks for stopping by!

Sean William said...

The Mt. Gox issue made the bitcoin industry gone crazy. Thankfully, the market is going back to normal again after Mt. Gox filed a bankruptcy protection.

reymark perry said...

The Mt. Gox demise may have shaken the faith of early bitcoin adopters, but it did not totally affect the bitcoin system to collapse. Bitcoin already has a strong foundation in the economy and it won’t be knocking off just because a company that accept bitcoin died.