Did Mt. Gox Go Bankrupt Or Do They Still Have The Bitcoins?
MATTERS at the Bitcoin exchange in Japan, Mt. Gox, are getting ever murkier: ever more fascinatingly interesting in fact. For hackers have now broken into the exchange and gobbled up a lot of the internal documents. And, of course, printed them out on the internet. You can see part of it here.
To give you the background to the story. Bitcoin is the new supper must have shiny technology. It’s essentially a new form of money or, if you prefer, a new way of making payments. You really only need on piece of technical information to grasp the point of it all.
Imagine that we all used electronic money. Great, that’s easy enough: now, given how easy it is to copy something that is digital, a music track, a cat picture, how the hell do you make sure that people don’t just keep duplicating their money? How do you make sure that one Bitcoin only gets spent once? That’s what the whole system is set up to do, make sure that you cannot just copy your money and thus, like photocopying your paycheque, end up having twice the fun.
Great, so everyone started to buy and sell things with Bitcoin and people obviously started to buy and sell Bitcoin itself. Which is where exchanges like Mt. Gox come in. And they’re now bankrupt,m taking $500 million of other peoples’ Bitcoins with them. Now, the argument they gave everyone was that actually, for technical reasons we won’t go into, they hadn’t managed to stop people speing their Bitcoin twice. In fact, all of that $500 millions’ worth that they thought they had? It’s gone, Poof!, people were withdrawing their money twice and no it’s just all gone.
Which is where we might leave it. Except that this hack over the weekend is claiming that this simply isn’t true. Those Bitcoins are all still in there and Mt. Gox still has them. The bankruptcy is, err, well, no one’s really quite sure actually.
Clearly, there’s more still to come on this story.
My best guess: the hack has shown what Mt. Gox did believe to be true. That they had all that Bitcoin. But what’s it’s not showing is what Mt. Gox realised last week which is that they had fucked up right royally and it was all gone.