Silk Road forums
Discussion => Security => Topic started by: Jack N Hoff on May 03, 2013, 02:28 am
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The two companies are in the business of Bitcoin exchange, which plays a central role in the Bitcoin economy. For all the hype surrounding Bitcoin's promise as the "future of currency," at present it's not really good for buying much. So all those Bitcoin millionaires must exchange Bitcoins for actual currency if they want to actually get any use out of it. The trades on the exchanges also set the closely-watched price of Bitcoin. (Currently hovering around $100.) Mt. Gox is the world's largest Bitcoin exchange. It handles about $6 million in trades a day, accounting for 76 percent of trades worldwide, according to The Verge. Coinlab is a relative newcomer to the Bitcoin game, but has received notice for attracting $500,000 in venture capital and partnering with Silicon Valley Bank.
This February, Mt. Gox and Coinlab announced they were forming a strategic partnership to expand Bitcoin services in North America. It seemed like a perfect match: Mt. Gox has years of experience handling hundreds of millions of dollars in transactions, and a massive customer base, but they're based in Japan and so have can't service American customers efficiently. Coinlab is a small but savvy upstart based in Seattle, looking to expand. The partnership would allow Mt. Gox to access the huge U.S. market through a capable partner, and Coinlab could latch onto Mt. Gox's reputation and existing customer base.
Coinlab alleges that Mt. Gox has breached a contract clause which was supposed to give Coinlab exclusive access to the North American market. "Defendants have breached the exclusivity provisions of the Agreement by directly servicing customers in the United States and Canada since the Agreement took effect," the lawsuit states.
Coinlab also says Mt. Gox hasn't allowed them to transition existing U.S. and Canadian customers from Mt. Gox to Coinlab, as agreed in the contract. "Despite repeated requests to do so, Mt. Gox has failed to deliver all passwords, Yubikeys, administrative logins and any other security information required so that CoinLab may assume operation of the Bitcoin exchange services for customers in the United States and Canada."
Coinlab is demanding $75 million in damages, and even that, it says, "likely underestimates the actual damages."
If it's true that Mt. Gox botched the deal, it's a big setback for the company, which has had a rocky past. An ongoing series of hacks, outages and other weirdness has led many in the Bitcoin community to question whether Mt. Gox is stable enough to be a major Bitcoin broker. Whenever Mt. Gox experiences downtime or a problem, the price of Bitcoin drops noticeably: Not a good look for what's supposed to be a radically decentralized currency
The Coinlab-Mt. Gox juggernaut was supposed to bring a new level of service, along with the legitimacy that came with the Silicon Valley Bank's backing, to Mt. Gox and the economy as a whole. The partnership was considered so important to the growth of Bitcoin that some observers credited it with sparking a massive 40% surge in Bitcoin prices past $250 when it was first announced, during which some big Bitcoin hold probably made millions. (At least until the price crashed back down again.) Now the biggest hope of Bitcoin has devolved into the biggest lawsuit.
Bitcoin might someday be utterly worthless, but it's clear there's big money to be made, and lost, right now.
CoinLab,
What tipped us into filing was our complete inability to get Mt. Gox to deliver on the few simple things left that were needed for customers to move over en-masse; we were often left just apologizing to our alpha customers while their own businesses suffered. I'm just not willing to put any of our customers in that position — if we can't do a good job for you, I won't promise that we can.
http://gawker.com/massive-bitcoin-business-partnership-devolves-into-75-487857656
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CoinLab will fail either way, unless they miraculously hold more coinage than Mt Gox... Do those people not know that Satoshi Nakamoto is the backer of Mt. Gox?
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It seems like Mtgox decided it would be more worthwhile and profitable to deal with a potential lawsuit from Coinlab and retain their US accounts, than it would be to give Coinlab all of their US accounts. I don't understand why else they would enter into contract with Coinlab and then not use them to process US transactions. The only other thing that makes sense to me would be if Coinlab somehow dropped the ball, or if they didn't follow through on their end of the deal.
Much cheaper to stop Coinlab. It sets the precedent that there is NO FUCKING WAY that Mt. Gox will lose American market shares. It would be impossible to compete with a digital, anonymous marketplace. Drugs in America? No way are you stealing away those dollars... that's like asking the La Costa Nostra to give up their culture and become Greek... Yeah right. La Costa Nostra now owns Cyprus. Mt. Gox now owns American Narcotics. Who better to manage drug habits and economy than the Japanese? Yakuza have successfully and peacefully operated Japan's underground since the day of the Samurai (1600s).
Mt. Gox is the only organization we want to manage BTC. Japanese have the most discipline and organization in the entire planet. Look at their island nation and how it has survived the greatest earthquake/tsunami in recorded human history.
ArigatogozaimasuSatoshiNakamoto
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i'm pretty sure it's more the case that gox has been swamped so bad by that big bubble last month and the ongoing attempts to game their exchange that they have been too busy to get the contract terms sorted out. also, a LOT of people with gox accounts in the USA do NOT want FinCEN having such free access to their data.
I dunno about this fawning love of gox, I personally have been fucked over by them and their service is terrible, because I used tor to access my account, and inadvertently started to open a second account forgetting I'd started the process before and stopped because I was unable to get proof of address, or something along those lines. I use bitstamp and their service is great, and apart from the occasional torwall, I have no problems using their service with tor, though I have stopped doing that anyway, just to get the irritating 'just one more step to access bitstamp' page that i get every other day when I use tor to access bitstamp.
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i'm pretty sure it's more the case that gox has been swamped so bad by that big bubble last month and the ongoing attempts to game their exchange that they have been too busy to get the contract terms sorted out. also, a LOT of people with gox accounts in the USA do NOT want FinCEN having such free access to their data.
I dunno about this fawning love of gox, I personally have been fucked over by them and their service is terrible, because I used tor to access my account, and inadvertently started to open a second account forgetting I'd started the process before and stopped because I was unable to get proof of address, or something along those lines. I use bitstamp and their service is great, and apart from the occasional torwall, I have no problems using their service with tor, though I have stopped doing that anyway, just to get the irritating 'just one more step to access bitstamp' page that i get every other day when I use tor to access bitstamp.
There are many, many people that want BTC to be traded by US-based companies... for dangerously obvious reasons.
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i'm pretty sure it's more the case that gox has been swamped so bad by that big bubble last month and the ongoing attempts to game their exchange that they have been too busy to get the contract terms sorted out. also, a LOT of people with gox accounts in the USA do NOT want FinCEN having such free access to their data.
I dunno about this fawning love of gox, I personally have been fucked over by them and their service is terrible, because I used tor to access my account, and inadvertently started to open a second account forgetting I'd started the process before and stopped because I was unable to get proof of address, or something along those lines. I use bitstamp and their service is great, and apart from the occasional torwall, I have no problems using their service with tor, though I have stopped doing that anyway, just to get the irritating 'just one more step to access bitstamp' page that i get every other day when I use tor to access bitstamp.
There are many, many people that want BTC to be traded by US-based companies... for dangerously obvious reasons.
Don't agree with '..many many people that want..' '..for dangerously obvious reasons..' because if this is a US based company then it would be subjected to US based laws. Which we all know allows the Gov to change and then take over, but not in this order. First they seize then they make the necessary changes to the Laws that will make this 'public travesty' in the fore front of the media to gain enough public support so they can, in their eyes, justly take the enterprise without much public out cry. Hence, the late 70's and through the middle 80's of South Fl cocaine money laundry banks. Surely someone could articulate this far better than me.. ;)
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Don't agree with '..many many people that want..' '..for dangerously obvious reasons..' because if this is a US based company then it would be subjected to US based laws. Which we all know allows the Gov to change and then take over, but not in this order. First they seize then they make the necessary changes to the Laws that will make this 'public travesty' in the fore front of the media to gain enough public support so they can, in their eyes, justly take the enterprise without much public out cry. Hence, the late 70's and through the middle 80's of South Fl cocaine money laundry banks. Surely someone could articulate this far better than me..
Inadvertantly, you agreed with Perpetual in your "don't agree" post above. The US DOES want to get control of Bitcoin for it's nefarious money control issues and I think it is inevitable. I have not tried to hide my identity in the various verification processes. Who cares? But then again, I'm not dealing in pounds of dope. So, when they get control, this little ride may be over for SR and any other Black Market dependent on Bitcoin. That's a fact.
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Don't agree with '..many many people that want..' '..for dangerously obvious reasons..' because if this is a US based company then it would be subjected to US based laws. Which we all know allows the Gov to change and then take over, but not in this order. First they seize then they make the necessary changes to the Laws that will make this 'public travesty' in the fore front of the media to gain enough public support so they can, in their eyes, justly take the enterprise without much public out cry. Hence, the late 70's and through the middle 80's of South Fl cocaine money laundry banks. Surely someone could articulate this far better than me..
Inadvertantly, you agreed with Perpetual in your "don't agree" post above. The US DOES want to get control of Bitcoin for it's nefarious money control issues and I think it is inevitable. I have not tried to hide my identity in the various verification processes. Who cares? But then again, I'm not dealing in pounds of dope. So, when they get control, this little ride may be over for SR and any other Black Market dependent on Bitcoin. That's a fact.
One of us is not reading the entire or catching the jest of the others post. Though I have re-read all of them it could very well be ME. I have never and will never claim to understand this damn language. But, I was merely stating that it is hard for me to believe that there are 'many many people' that can not see how bad it would be for the bitcoin, and the US accounts for there to be a US based company that handles the bulk of US based accounts. Never did I say that the US Gov does not want is is not trying to gain control of the trade. Have you looked up who really owns the Silicone Valley Banks?? You should, may very well surprise you..Nope not the US Gov...
There are far MORE people that are much smarter than myself, so for me to be able to see so clearly that this is a bad idea certainly allows the others too.
Hope this makes it clear as mud!? lol :)
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It seems like Mtgox decided it would be more worthwhile and profitable to deal with a potential lawsuit from Coinlab and retain their US accounts, than it would be to give Coinlab all of their US accounts. I don't understand why else they would enter into contract with Coinlab and then not use them to process US transactions. The only other thing that makes sense to me would be if Coinlab somehow dropped the ball, or if they didn't follow through on their end of the deal.
Much cheaper to stop Coinlab. It sets the precedent that there is NO FUCKING WAY that Mt. Gox will lose American market shares. It would be impossible to compete with a digital, anonymous marketplace. Drugs in America? No way are you stealing away those dollars... that's like asking the La Costa Nostra to give up their culture and become Greek... Yeah right. La Costa Nostra now owns Cyprus. Mt. Gox now owns American Narcotics. Who better to manage drug habits and economy than the Japanese? Yakuza have successfully and peacefully operated Japan's underground since the day of the Samurai (1600s).
Mt. Gox is the only organization we want to manage BTC. Japanese have the most discipline and organization in the entire planet. Look at their island nation and how it has survived the greatest earthquake/tsunami in recorded human history.
ArigatogozaimasuSatoshiNakamoto
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and while i agree that it's the yakuza who invented BTC., But the cosa nostra running cyprus that is shite in my opinion. Trust me the cypriots have their own criminal organizations i know trust me. Not the turkish cypriots either, The greeks. And they will hang onto cyprus for as long as they can. The cosa nostra are still very prominent in the south of italy, but they are not the mafia you used to see on the Tv and in the movies anymore.trust me.