Totally off topic,
But I figured some of you into cryptocoins or watching on the sidelines
would find this comment I made on reddit interesting:
http://www.reddit.com/r/BitcoinMarkets/comments/1ygxq7/mtgox_megathread_3_thursday_february_20_2014/cfkflvt
Note that this isn't financial advice and what I'm describing is risky.
Full text of posted comment below
Mark
--------------------
If there are other people like myself, the price on MtGox does have an
effect on other markets.
I decided the discount offered on https://bitcoinbuilder.com/ for MtGox
coins was too steep relative to the chance of insolvency. So, I traded
some of my real bitcoins for goxcoins AND wanting to keep my on-paper
position in bitcoin more or less the same, I sold off some of my
theoretical bitcoin profits for fiat on a normal exchange. (used reserve
real coins)
Nice, a chance to do arbitrage using only crypto coins.
(Or, I just got Mt. Goxed! http://www.youtube.com/watch?v=y8vCj4DOsHc )
As a long bitcoin term holder, I can live with having gox coins for
awhile. Thought that perhaps my biggest delay might actually be AML/KYC
processing delays for verification on my Gox account, but turns out, if
you trust bitcoinbuilder.com, you can actually leave the Gox coins with
them -- if and when BTC withdrawls ever work again they'll give you the
chance to trade them back for real coins.
Why I think MtGox is likely solvent:
* Revenue from trading fees over the years
minus
* Fiat loss from Dwolla related seizures in US
* Limited losses from double-paying fraudsters who used transaction
malleability due to cold wallet withdrawls being a good opportunity to
catch the issue
* Operating costs that have probably not been high, labour can be the
worst, but it doesn't look like they have a good enough management team
to handle massive scale up for large amount of customer service and IT
hiring, so they've probably not hired heavy vs hiring heavy for
resources that would be poorly used
* Probably have not been cashing out dividends over the years, start up
companies like this hoard their positive cash flow for expansion
Also
* Roger Ver and Andreas Antonopoulos opinions
* Major personal liability for directors/officers knowingly operating
insolvent without consulting creditors, Japan isn't a jurisdiction where
they can get away with it
* I believe them when they say that they can't find a bank in Japan that
will do more then 10 international wire transfers a day, all exchanges
have a history of difficulty securing relationships. Banks are paranoid
about Bitcoin, and I can imagine they're especially paranoid about
dealing with an exchange that had funds seized in the US.
And worst case, if they're insolvent or become insolvent, it should only
mean I take a haircut, not perhaps as big as the one the person who sold
me gox coins took.
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