It appears as if all hell has broken loose for Bitcoin, and other cryptocurrencies in general. Or maybe things aren’t as grim as they are being portrayed, because what DO we know exactly at this point?
There is a lot of speculation out there on what exactly happened behind the scenes of Mt Gox, the world’s biggest Bitcoin to/from fiat currencies.
First, let’s take a look at the few things that are FACTS right now :
FACT : The Mt Gox website has gone offline, and is showing ominous code in the blank page’s source code. To be more precisem something about a possible Mt Gox acquisition. Very odd for an exchange that has come to a complete stop. Not to mention that no one in their right mind would want to acquire anything related to Mt Gox right now.
FACT : All of Mt Gox’s previous tweets have been removed. The @mMtGox twitter account is still in existence though, which is also odd, because you would expect them to have the account closed, or at least temporarily deactivated.
FACT : The blog on the Bitcoin Foundation website states that Mt Gox has severed all ties with the Bitcoin Foundation , and that a new election will be held to fill the now vacant industry member seat. A clear message, yet still lacking a lot of evidence of what exactly happened. It’s not because something gets posted on the Bitcoin Foundation’s blog that we can’t be wary of such posts.
Those are the only facts we have at the moment, but speculation is running wild at the moment,and understandably so. However, let’s try and , at least partially, debunk some of the rumours.
RUMOUR : 775,000 Bitcoin are ALLEGEDLY missing. This number has not been confirmed however. And the biggest issue with this rumour is, that we don’t even know if this is about funds owned by Mt Gox themselves, or by it’s customers. At this point, it is not advised to make any unfounded assumptions.
RUMOUR : A document has been leaked on the internet, ALLEGEDLY coming from Mt Gox themselves. Anyone can throw together a pdf file with some images, and should in no way, shape or form be treated as legit at this point. Do you really believe that, if this actually came from Mt Gox themselves, they would be stupid enough to also leak the name of the document, which is very aptly called Crisis Strategy Draft? Use your head people, come on.
RUMOUR : The Joint Statement regarding Mt Gox. Although it seems very legit, you have to ask yourself what this is based on : the fact that Mt Gox has left the Bitcoin Foundation, or all of the speculation surrounding the website shutting down?
Whatever the real story is, Mt Gox is only partially to blame though. Everyone who stored any funds on that exchange for extended time, has always been at the risk of losing it. Exchanges should only be used to complete a trade, and any funds should be withdrawn immediately after that.
Cryptocurrency exchanges aren’t like banks : even though I really don’t trust any banker further than I can throw them, you can at least get your money back in case something happens, because they are bound by legislation in your country. Bitcoin exchanges, on the other hand, are not regulated, and can pretty much disappear with any funds without direct repercussions. I’m not saying this will be the case, but it could be worst case scenario.
Convenience leads to less concern about safety of funds, and a lot of people become careless unfortunately. I am not defending Mt Gox, don’t get me wrong. But the users are partially at fault too for losing any money, and that’s a hard truth to swallow.
Until we know the full story, we can only wait and see what happens. But there is definitely something wrong with the Bitcoin community in general, because one exchange’s issues have been defining Bitcoin prices for a long time now, whether you can actually trade there or not at this point.
This will not be the end of Bitcoin, do not panic sell now. Hold your Bitcoins and keep pushing the price back up slowly. We are bigger than just Mt Gox.