Cryptocurrency storage and the Mt. Gox hack ghost - WIVACOIN

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An extensive guide for cashing out bitcoin and cryptocurrencies into private banks

Hey guys.
Merry Xmas !
I am coming back to you with a follow up post, as I have helped many people cash out this year and I have streamlined the process. After my original post, I received many requests to be more specific and provide more details. I thought that after the amazing rally we have been attending over the last few months, and the volatility of the last few days, it would be interesting to revisit more extensively.
The attitude of banks around crypto is changing slowly, but it is still a tough stance. For the first partial cash out I operated around a year ago for a client, it took me months to find a bank. They wouldn’t want to even consider the case and we had to knock at each and every door. Despite all my contacts it was very difficult back in the days. This has changed now, and banks have started to open their doors, but there is a process, a set of best practices and codes one has to follow.
I often get requests from crypto guys who are very privacy-oriented, and it takes me months to have them understand that I am bound by Swiss law on banking secrecy, and I am their ally in this onboarding process. It’s funny how I have to convince people that banks are legit, while on the other side, banks ask me to show that crypto millionaires are legit. I have a solid background in both banking and in crypto so I manage to make the bridge, but yeah sometimes it is tough to reconcile the two worlds. I am a crypto enthusiast myself and I can say that after years of work in the banking industry I have grown disillusioned towards banks as well, like many of you. Still an account in a Private bank is convenient and powerful. So let’s get started.
There are two different aspects to your onboarding in a Swiss Private bank, compliance-wise.
*The origin of your crypto wealth
*Your background (residence, citizenship and probity)
These two aspects must be documented in-depth.
How to document your crypto wealth. Each new crypto millionaire has a different story. I may detail a few fun stories later in this post, but at the end of the day, most of crypto rich I have met can be categorized within the following profiles: the miner, the early adopter, the trader, the corporate entity, the black market, the libertarian/OTC buyer. The real question is how you prove your wealth is legit.
1. Context around the original amount/investment Generally speaking, your first crypto purchase may not be documented. But the context around this acquisition can be. I have had many cases where the original amount was bought through Mtgox, and no proof of purchase could be provided, nor could be documented any Mtgox claim. That’s perfectly fine. At some point Mtgox amounted 70% of the bitcoin transactions globally, and people who bought there and managed to withdraw and keep hold of their bitcoins do not have any Mtgox claim. This is absolutely fine. However, if you can show me the record of a wire from your bank to Tisbane (Mtgox's parent company) it's a great way to start.
Otherwise, what I am trying to document here is the following: I need context. If you made your first purchase by saving from summer jobs, show me a payroll. Even if it was USD 2k. If you acquired your first bitcoins from mining, show me the bills of your mining equipment from 2012 or if it was through a pool mine, give me your slushpool account ref for instance. If you were given bitcoin against a service you charged, show me an invoice.
2. Tracking your wealth until today and making sense of it. What I have been doing over the last few months was basically educating compliance officers. Thanks God, the blockchain is a global digital ledger! I have been telling my auditors and compliance officers they have the best tool at their disposal to lead a proper investigation. Whether you like it or not, your wealth can be tracked, from address to address. You may have thought all along this was a bad feature, but I am telling you, if you want to cash out, in the context of Private Banking onboarding, tracking your wealth through the block explorer is a boon. We can see the inflows, outflows. We can see the age behind an address. An early adopter who bought 1000 BTC in 2010, and let his bitcoin behind one address and held thus far is legit, whether or not he has a proof of purchase to show. That’s just common sense. My job is to explain that to the banks in a language they understand.
Let’s have a look at a few examples and how to document the few profiles I mentioned earlier.
The trader. I love traders. These are easy cases. I have a ton of respect for them. Being a trader myself in investment banks for a decade earlier in my career has taught me that controlling one’s emotions and having the discipline to impose oneself some proper risk management system is really really hard. Further, being able to avoid the exchange bankruptcy and hacks throughout crypto history is outstanding. It shows real survival instinct, or just plain blissed ignorance. In any cases traders at exchange are easy cases to corroborate since their whole track record is potentially available. Some traders I have met have automated their trading and have shown me more than 500k trades done over the span of 4 years. Obviously in this kind of scenario I don’t show everything to the bank to avoid information overload, and prefer to do some snacking here and there. My strategy is to show the early trades, the most profitable ones, explain the trading strategy and (partially expose) the situation as of now with id pages of the exchanges and current balance. Many traders have become insensitive to the risk of parking their crypto at exchange as they want to be able to trade or to grasp an occasion any minute, so they generally do not secure a substantial portion on the blockchain which tends to make me very nervous.
The early adopter. Provided that he has not mixed his coin, the early adopter or “hodler” is not a difficult case either. Who cares how you bought your first 10k btc if you bought them below 3$ ? Even if you do not have a purchase proof, I would generally manage to find ways. We just have to corroborate the original 30’000 USD investment in this case. I mainly focus on three things here:
*proof of early adoption I have managed to educate some banks on a few evidences specifically related to crypto markets. For instance with me, an old bitcointalk account can serve as a proof of early adoption. Even an old reddit post from a few years ago where you say how much you despise this Ripple premined scam can prove to be a treasure readily available to show you were early.
*story telling Compliance officers like to know when, why and how. They are human being looking for simple answers to simple questions and they don’t want like to be played fool. Telling the truth, even without a proof can do wonders, and even though bluffing might still work because banks don’t fully understand bitcoin yet, it is a risky strategy that is less and less likely to pay off as they are getting more sophisticated by the day.
*micro transaction from an old address you control This is the killer feature. Send a $20 worth transaction from an old address to my company wallet and to one of my partner bank’s wallet and you are all set ! This is gold and considered a very solid piece of evidence. You can also do a microtransaction to your own wallet, but banks generally prefer transfer to their own wallet. Patience with them please. they are still learning.
*signature message Why do a micro transaction when you can sign a message and avoid potentially tainting your coins ?
*ICO millionaire Some clients made their wealth participating in ETH crowdsale or IOTA ICO. They were very easy to deal with obviously and the account opening was very smooth since we could evidence the GENESIS TxHash flow.
The miner Not so easy to proof the wealth is legit in that case. Most early miners never took screenshot of the blocks on bitcoin core, nor did they note down the block number of each block they mined. Until the the Slashdot article from August 2010 anyone could mine on his laptop, let his computer run overnight and wake up to a freshly minted block containing 50 bitcoins back in the days. Not many people were structured enough to store and secure these coins, avoid malwares while syncing the blockchain continuously, let alone document the mined blocks in the process. What was 50 BTC worth really for the early miners ? dust of dollars, games and magic cards… Even miners post 2010 are generally difficult to deal with in terms of compliance onboarding. Many pool mining are long dead. Deepbit is down for instance and the founders are MIA. So my strategy to proof mining activity is as follow:
*Focusing on IT background whenever possible. An IT background does help a lot to bring some substance to the fact you had the technical ability to operate a mining rig.
*Showing mining equipment receipts. If you mined on your own you must have bought the hardware to do so. For instance mining equipment receipts from butterfly lab from 2012-2013 could help document your case. Similarly, high electricity bill from your household on a consistent basis back in the day could help. I have already unlocked a tricky case in the past with such documents when the bank was doubtful.
*Wallet.dat files with block mining transactions from 2011 thereafter This obviously is a fantastic piece of evidence for both you and me if you have an old wallet and if you control an address that received original mined blocks, (even if the wallet is now empty). I will make sure compliance officers understand what it means, and as for the early adopter, you can prove your control over these wallet through a microtransaction. With these kind of addresses, I can show on the block explorer the mined block rewards hitting at regular time interval, and I can even spot when difficulty level increased or when halvening process happened.
*Poolmining account. Here again I have educated my partner bank to understand that a slush account opened in 2013 or an OnionTip presence was enough to corroborate mining activity. The block explorer then helps me to do the bridge with your current wallet.
*Describing your set up and putting it in context In the history of mining we had CPU, GPU, FPG and ASICs mining. I will describe your technical set up and explain why and how your set up was competitive at that time.
The corporate entity Remember 2012 when we were all convinced bitcoin would take over the world, and soon everyone would pay his coffee in bitcoin? How naïve we were to think transaction fees would remain low forever. I don’t blame bitcoin cash supporters; I once shared this dream as well. Remember when we thought global adoption was right around the corner and some brick and mortar would soon accept bitcoin transaction as a common mean of payment? Well, some shop actually did accept payment and held. I had a few cases as such of shops holders, who made it to the multi million mark holding and had invoices or receipts to proof the transactions. If you are organized enough to keep a record for these trades and are willing to cooperate for the documentation, you are making your life easy. The digital advertising business is also a big market for the bitcoin industry, and affiliates partner compensated in btc are common. It is good to show an invoice, it is better to show a contract. If you do not have a contract (which is common since all advertising deals are about ticking a check box on the website to accept terms and conditions), there are ways around that. If you are in that case, pm me.
The black market Sorry guys, I can’t do much for you officially. Not that I am judging you. I am a libertarian myself. It’s just already very difficult to onboard legit btc adopters, so the black market is a market I cannot afford to consider. My company is regulated so KYC and compliance are key for me if I want to stay in business. Behind each case I push forward I am risking the credibility and reputation I have built over the years. So I am sorry guys I am not risking it to make an extra buck. Your best hope is that crypto will eventually take over the world and you won’t need to cash out anyway. Or go find a Lithuanian bank that is light on compliance and cooperative.
The OTC buyer and the libertarian. Generally a very difficult case. If you bought your stack during your journey in Japan 5 years ago to a guy you never met again; or if you accumulated on https://localbitcoins.com/ and kept no record or lost your account, it is going to be difficult. Not impossible but difficult. We will try to build a case with everything else we have, and I may be able to onboard you. However I am risking a lot here so I need to be 100% confident you are legit, before I defend you. Come & see me in Geneva, and we will talk. I will run forensic services like elliptic, chainalysis, or scorechain on an extract of your wallet. If this scan does not raise too many red flags, then maybe we can work together ! If you mixed your coins all along your crypto history, and shredded your seeds because you were paranoid, or if you made your wealth mining professionally monero over the last 3 years but never opened an account at an exchange. ¯_(ツ)_/¯ I am not a magician and don’t get me wrong, I love monero, it’s not the point.
Cashing out ICOs Private companies or foundations who have ran an ICO generally have a very hard time opening a bank account. The few banks that accept such projects would generally look at 4 criteria:
*Seriousness of the project Extensive study of the whitepaper to limit the reputation risk
*AML of the onboarding process ICOs 1.0 have no chance basically if a background check of the investors has not been conducted
*Structure of the moral entity List of signatories, certificate of incumbency, work contract, premises...
*Fiscal conformity Did the company informed the authorities and seek a fiscal ruling.
For the record, I am not into the tax avoidance business, so people come to me with a set up and I see if I can make it work within the legal framework imposed to me.
First, stop thinking Switzerland is a “offshore heaven” Swiss banks have made deals with many governments for the exchange of fiscal information. If you are a French citizen, resident in France and want to open an account in a Private Bank in Switzerland to cash out your bitcoins, you will get slaughtered (>60%). There are ways around that, and I could refer you to good tax specialists for fiscal optimization, but I cannot organize it myself. It would be illegal for me. Swiss private banks makes it easy for you to keep a good your relation with your retail bank and continue paying your bills without headaches. They are integrated to SEPA, provide ebanking and credit cards.
For information, these are the kind of set up some of my clients came up with. It’s all legal; obviously I do not onboard clients that are not tax compliant. Further disclaimer: I did not contribute myself to these set up. Do not ask me to organize it for you. I won’t.
EU tricks
Swiss lump sum taxation Foreign nationals resident in Switzerland can be taxed on a lump-sum basis if they are not gainfully employed in our country. Under the lump-sum tax regime, foreign nationals taking residence in Switzerland may choose to pay an expense-based tax instead of ordinary income and wealth tax. Attractive cantons for the lump sum taxation are Zug, Vaud, Valais, Grisons, Lucerne and Berne. To make it short, you will be paying somewhere between 200 and 400k a year and all expenses will be deductible.
Switzerland has adopted a very friendly attitude towards crypto currency in general. There is a whole crypto valley in Zug now. 30% of ICOs are operated in Switzerland. The reason is that Switzerland has thrived for centuries on banking secrecy, and today with FATCA and exchange of fiscal info with EU, banking secrecy is dead. Regulators in Switzerland have understood that digital ledger technologies were a way to roll over this competitive advantage for the generations to come. Switzerland does not tax capital gains on crypto profits. The Finma has a very pragmatic approach. They have issued guidance- updated guidelines here. They let the business get organized and operate their analysis on a case per case basis. Only after getting a deep understanding of the market will they issue a global fintech license in 2019. This approach is much more realistic than legislations which try to regulate everything beforehand.
Italy new tax exemption. It’s a brand new fiscal exemption. Go to Aoste, get residency and you could be taxed a 100k/year for 10years. Yes, really.
Portugal What’s crazy in Europe is the lack of fiscal harmonization. Even if no one in Brussels dares admit it, every other country is doing fiscal dumping. Portugal is such a country and has proved very friendly fiscally speaking. I personally have a hard time trusting Europe. I have witnessed what happened in Greece over the last few years. Some of our ultra high net worth clients got stuck with capital controls. I mean no way you got out of crypto to have your funds confiscated at the next financial crisis! Anyway. FYI
Malta Generally speaking, if you get a residence somewhere you have to live there for a certain period of time. Being stuck in Italy is no big deal with Schengen Agreement, but in Malta it is a different story. In Malta, the ordinary residence scheme is more attractive than the HNWI residence scheme. Being an individual, you can hold a residence permit under this scheme and pay zero income tax in Malta in a completely legal way.
Monaco Not suitable for French citizens, but for other Ultra High Net worth individual, Monaco is worth considering. You need an account at a local bank as a proof of fortune, and this account generally has to be seeded with at least EUR500k. You also need a proof of residence. I do mean UHNI because if you don’t cash out minimum 30m it’s not interesting. Everything is expensive in Monaco. Real Estate is EUR 50k per square meter. A breakfast at Monte Carlo Bay hotel is 70 EUR. Monaco is sunny but sometimes it feels like a golden jail. Do you really want that for your kids?
Dubaï
  1. Set up a company in Dubaï, get your resident card.
  2. Spend one day every 6 month there
  3. ???
  4. Be tax free
US tricks Some Private banks in Geneva do have the license to manage the assets of US persons and U.S citizens. However, do not think it is a way to avoid paying taxes in the US. Opening an account at an authorized Swiss Private banks is literally the same tax-wise as opening an account at Fidelity or at Bank of America in the US. The only difference is that you will avoid all the horror stories. Horror stories are all real by the way. In Switzerland, if you build a decent case and answer all the questions and corroborate your case in depth, you will manage to convince compliance officers beforehand. When the money eventually hits your account, it is actually available and not frozen.
The IRS and FATCA require to file FBAR if an offshore account is open. However FBAR is a reporting requirement and does not have taxes related to holding an account outside the US. The taxes would be the same if the account was in the US. However penalties for non compliance with FBAR are very large. The tax liability management is actually performed through the management of the assets ( for exemple by maximizing long term capital gains and minimizing short term gains).
The case for Porto Rico. Full disclaimer here. I am not encouraging this. Have not collaborated on such tax avoidance schemes. if you are interested I strongly encourage you to seek a tax advisor and get a legal opinion. I am not responsible for anything written below. I am not going to say much because I am so afraid of uncle Sam that I prefer to humbly pass the hot potato to pwc From here all it takes is a good advisor and some creativity to be tax free on your crypto wealth if you are a US person apparently. Please, please please don’t ask me more. And read the disclaimer again.
Trust tricks Generally speaking I do not accept fringe fiscal situation because it puts me in a difficult situation to the banks I work with, and it is already difficult enough to defend a legit crypto case. Trust might be a way to optimize your fiscal situation. Belize. Bahamas. Seychelles. Panama, You name it. At the end of the day, what matters for Swiss Banks are the beneficial owner and the settlor. Get a legal opinion, get it done, and when you eventually knock at a private bank’s door, don’t say it was for fiscal avoidance you stupid ! You will get the door smashed upon you. Be smarter. It will work. My advice is just to have it done by a great tax specialist lawyer, even if it costs you some money, as the entity itself needs to be structured in a professional way. Remember that with trust you are dispossessing yourself off your wealth. Not something to be taken lightly.
“Anonymous” cash out. Right. I think I am not going into this topic, neither expose the ways to get it done. Pm me for details. I already feel a bit uncomfortable with all the info I have provided. I am just going to mention many people fear that crypto exchange might become reporting entities soon, and rightly so. This might happen anyday. You have been warned. FYI, this only works for non-US and large cash out.
The difference between traders an investors. Danmark, Holland and Germany all make a huge difference if you are a passive investor or if you are a trader. ICO is considered investing for instance and is not taxed, while trading might be considered as income and charged aggressively. I would try my best to protect you and put a focus on your investor profile whenever possible, so you don't have to pay 52% tax if you do not have to :D
Full cash out or partial cash out? People who have been sitting on crypto for long have grown an emotional and irrational link with their coins. They come to me and say, look, I have 50m in crypto but I would like to cash out 500k only. So first let me tell you that as a wealth manager my advice to you is to take some off the table. Doing a partial cash out is absolutely fine. The market is bullish. We are witnessing a redistribution of wealth at a global scale. Bitcoin is the real #occupywallstreet, and every one will discuss crypto at Xmas eve which will make the market even more supportive beginning 2018, especially with all hedge funds entering the scene. If you want to stay exposed to bitcoin and altcoins, and believe these techs will change the world, it’s just natural you want to keep some coins. In the meantime, if you have lived off pizzas over the last years, and have the means to now buy yourself an nice house and have an account at a private bank, then f***ing do it mate ! Buy physical gold with this account, buy real estate, have some cash at hands. Even though US dollar is worthless to your eyes, it’s good and convenient to have some. Also remember your wife deserves it ! And if you have no wife yet and you are socially awkward like the rest of us, then maybe cashing out partially will help your situation ;)
What the Private Banks expect. Joke aside, it is important you understand something. If you come around in Zurich to open a bank account and partially cash out, just don’t expect Private Banks will make an exception for you if you are small. You can’t ask them to facilitate your cash out, buy a 1m apartment with the proceeds of the sale, and not leave anything on your current account. It won’t work. Sadly, under 5m you are considered small in private banking. The bank is ok to let you open an account, provided that your kyc and compliance file are validated, but they will also want you to become a client and leave some money there to invest. This might me despicable, but I am just explaining you their rules. If you want to cash out, you should sell enough to be comfortable and have some left. Also expect the account opening to last at least 3-4 week if everything goes well. You can't just open an account overnight.
The cash out logistics. Cashing out 1m USD a day in bitcoin or more is not so hard.
Let me just tell you this: Even if you get a Tier 4 account with Kraken and ask Alejandro there to raise your limit over $100k per day, Even if you have a bitfinex account and you are willing to expose your wealth there, Even if you have managed to pass all the crazy due diligence at Bitstamp,
The amount should be fractioned to avoid risking your full wealth on exchange and getting slaughtered on the price by trading big quantities. Cashing out involves significant risks at all time. There is a security risk of compromising your keys, a counterparty risk, a fat finger risk. Let it be done by professionals. It is worth every single penny.
Most importantly, there is a major difference between trading on an exchange and trading OTC. Even though it’s not publicly disclosed some exchange like Kraken do have OTC desks. Trading on an exchange for a large amount will weight on the prices. Bitcoin is a thin market. In my opinion over 30% of the coins are lost in translation forever. Selling $10m on an exchange in a day can weight on the prices more than you’d think. And if you trade on a exchange, everything is shown on record, and you might wipe out the prices because on exchanges like bitstamp or kraken ultimately your counterparties are retail investors and the market depth is not huge. It is a bit better on Bitfinex. It is way better to trade OTC. Accessing the institutional OTC market is not easy, and that is also the reason why you should ask a regulated financial intermediary if we are talking about huge amounts.
Last point, always chose EUR as opposed to USD. EU correspondent banks won’t generally block institutional amounts. However we had the cases of USD funds frozen or delayed by weeks.
Most well-known OTC desks are Cumberlandmining (ask for Lucas), Genesis (ask for Martin), Bitcoin Suisse AG (ask for Niklas), circletrade, B2C2, or Altcoinomy (ask for Olivier)
Very very large whales can also set up escrow accounts for massive block trades. This world, where blocks over 30k BTC are exchanged between 2 parties would deserve a reddit thread of its own. Crazyness all around.
Your options: DIY or going through a regulated financial intermediary.
Execution trading is a job in itself. You have to be patient, be careful not to wipe out the order book and place limit orders, monitor the market intraday for spikes or opportunities. At big levels, for a large cash out that may take weeks, these kind of details will save you hundred thousands of dollars. I understand crypto holders are suspicious and may prefer to do it by themselves, but there are regulated entities who now offer the services. Besides, being a crypto millionaire is not a guarantee you will get institutional daily withdrawal limits at exchange. You might, but it will take you another round of KYC with them, and surprisingly this round might be even more aggressive that the ones at Private banks since exchange have gone under intense scrutiny by regulators lately.
The fees for cashing out through a regulated financial intermediary to help you with your cash out should be around 1-2% flat on the nominal, not more. And for this price you should get the full package: execution/monitoring of the trades AND onboarding in a private bank. If you are asked more, you are being abused.
Of course, you also have the option to do it yourself. It is a way more tedious and risky process. Compliance with the exchange, compliance with the private bank, trading BTC/fiat, monitoring the transfers…You will save some money but it will take you some time and stress. Further, if you approach a private bank directly, it will trigger a series of red flag to the banks. As I said in my previous post, they call a direct approach a “walk-in”. They will be more suspicious than if you were introduced by someone and won’t hesitate to show you high fees and load your portfolio with in-house products that earn more money to the banks than to you. Remember also most banks still do not understand crypto so you will have a lot of explanations to provide and you will have to start form scratch with them!
The paradox of crypto millionaires Most of my clients who made their wealth through crypto all took massive amount of risks to end up where they are. However, most of them want their bank account to be managed with a low volatility fixed income capital preservation risk profile. This is a paradox I have a hard time to explain and I think it is mainly due to the fact that most are distrustful towards banks and financial markets in general. Many clients who have sold their crypto also have a cash-out blues in the first few months. This is a classic situation. The emotions involved in hodling for so long, the relief that everything has eventually gone well, the life-changing dynamics, the difficulties to find a new motivation in life…All these elements may trigger a post cash-out depression. It is another paradox of the crypto rich who has every card in his hand to be happy, but often feel a bit sad and lonely. Sometimes, even though it’s not my job, I had to do some psychological support. A lot of clients have also become my friends, because we have the same age and went through the same “ordeal”. First world problem I know… Remember, cashing out is not the end. It’s actually the beginning. Don’t look back, don’t regret. Cash out partially, because it does not make sense to cash out in full, regret it and want back in. relax.
The race to cash out crypto billionaire and the concept of late exiter. The Winklevoss brothers are obviously the first of a series. There will be crypto billionaires. Many of them. At a certain level you can have a whole family office working for you to manage your assets and take care of your needs . However, let me tell you it’s is not because you made it so big that you should think you are a genius and know everything better than anyone. You should hire professionals to help you. Managing assets require some education around the investment vehicles and risk management strategies. Sorry guys but with all the respect I have for wallstreebet, AMD and YOLO stock picking, some discipline is necessary. The investors who have made money through crypto are generally early adopters. However I have started to see another profile popping up. They are not early adopters. They are late exiters. It is another way but just as efficient. Last week I met the first crypto millionaire I know who first bough bitcoin over 1000$. 55k invested at the beginning of this year. Late adopter & late exiter is a route that can lead to the million.
Last remarks. I know banks, bankers, and FIAT currencies are so last century. I know some of you despise them and would like to have them burn to the ground. With compliance officers taking over the business, I would like to start the fire myself sometimes. I hope this extensive guide has helped some of you. I am around if you need more details. I love my job despite all my frustration towards the banking industry because it makes me meet interesting people on a daily basis. I am a crypto enthusiast myself, and I do think this tech is here to stay and will change the world. Banks will have to adapt big time. Things have started to change already; they understand the threat is real. I can feel the generational gap in Geneva, with all these old bankers who don’t get what’s going on. They glaze at the bitcoin chart on CNBC in disbelief and they start to get it. This bitcoin thing is not a joke. Deep inside, as an early adopter who also intends to be a late exiter, as a libertarian myself, it makes me smile with satisfaction.
Cheers. @swisspb on telegram
submitted by Swissprivatebanker to Bitcoin [link] [comments]

Anyone know/have any any ideas about why Bitcoin lost 25% of its value over the last 24 hours?

submitted by Paneos to Bitcoin [link] [comments]

I *MIGHT* watch the market too much...my bandwidth report for December

I *MIGHT* watch the market too much...my bandwidth report for December submitted by danodemano to Bitcoin [link] [comments]

How does OceanONE define Exchange 3.0? How to do 1 second transfer, 0 transaction fee trading experience?

If mines and centralized exchanges used to be the protagonists of blockchain era, then decentralized exchanges are likely to bring value interconnections to various fields, and decentralized transactions are highly transparent and extremely strong.
The anti-risk ability, and most of today’s decentralized exchanges are only in the initial stage of development, the product experience can not meet the core needs of users for the transaction: security + simple + fast .
OceanONE combines the advantages of a centralized and decentralized exchange and will be the pioneer of the Exchange 3.0 era.

Exchange Evolution: How will OceanONE define Exchange 3.0?

Looking back at the 1.0 stage of the exchange, the centralized exchange is widely welcomed by users because of its efficient transaction, convenient operation and high liquidity, but there are also hidden security risks behind it. In the face of hacker attacks, many exchanges have caused significant losses. For example, the famous MtGox incident not only caused users to suffer huge financial losses, but also indirectly caused the price of the currency to fall. The overall market loss far exceeded the loss of book capital. Even today, whenever the bitcoin of the account is sold off, it causes the market a certain range of turmoil.
At the current stage of the Exchange 2.0, decentralized exchanges have gradually been reached by more people, and its emergence is mainly to solve the risk of the current centralized exchange. However, to be completely decentralized, efficiency is relatively low compared to current centralized exchanges.
First of all, in terms of security, more than 99% of transactions are currently realized through centralized exchanges. Therefore, the centralized exchanges hold so many digital currencies, which means that they will become the scams of hackers. There is a high risk of funds.
Secondly, in terms of technology, the scalability of decentralized exchanges has not been resolved, so the transaction speed is relatively slow, and the Ethereum network often encounters congestion.

What are the advantages of OceanONE compared to centralized exchanges and decentralized exchanges?

The comparison between OceanONE and the Centralized Exchange is as follows:

1) The user recharges from the imToken or other digital asset wallet to the OceanONE account for trading. If there is a certain risk, the user loses most of the assets of the pending order and protects the security of the assets in the user’s wallet.
2) “0” transfer cost , the user transfers to OceanONE through the Mixin Messenger wallet for pending order transaction, the transfer process is 0 fee.
3) “1” seconds to the account experience, the user transfers the money to the OceanONE through the Mixin Messenger wallet for the pending order transaction, the transfer process is completed in 1 second.

The comparison between OceanONE and the decentralized exchange is:

1) High transaction depth, able to handle high concurrent orders, and real-time transactions.
2) High usability : The user’s mobile phone number is the account number, and the registration process is very simple. The user only needs the mobile phone number, verification code and six-digit PIN code to use.
3) Full currency support : Support BTC / ETH / EOS / XRP / ETC / SC / BCH / LTC / DASH / DOGE / ZEC A total of 11 public chains, more than 40,000 + currency.

How can OceanONE balance efficiency and fairness, be safe and convenient?

OceanONE is a decentralized exchange based on the Mixin Network, providing users with a transparent and secure trading experience.

The Mixin Network has the following features:

  1. Verifiable security : The Mixin Network code is open source, decentralized distributed ledger, multi-signature address and fragment key sharing, and TEE hardware executable environment can verify network security.
  2. Completely free : ordinary users use Mixin Network for free, the entire network transfer 0 handling fee, compared to BTC / ETH, etc. have an absolute advantage.
3, unlimited network throughput can achieve large-scale commercial applications : Mixin’s accounting method uses DAG mode, which can effectively solve the delay problem of blockchain packaging. The network transfer confirmation speed reaches the second level, supporting the billion-level TPS to meet the business-level needs.

web - https://mixin.one/
submitted by mithungee to ico [link] [comments]

Bitstamp's streaming API, and exploitation possibilities it might reveal

TL;DR: Bitstamp's undocumented streaming API seems to reveal out-of-order trade execution that can be exploited to steal margins from large buys/sells.
Bitstamp has an undocumented streaming API. You should know what it seems to reveal about Bitstamp's order matching.
It's not surprising that I see trades on the stream about 10s before I see them on BitcoinWisdom etc. (I haven't compared that to the latency of direct API polling; my lag to BW and processing lag at BW's end might be included there.) That's already not fair. Bitstamp should document the stream, or delay it.
Before I tell you what is surprising, a quick detour: Bitstamp only provides limit orders. "Instant" (aka Market) orders are simulated by placing a limit order with the limit set to whatever was the top of the opposite side of the book at the time, and as anyone who has tried to trade at Bitstamp during a rally/drop will know, the top often moves before your "instant" order hits the books and therefore doesn't execute. People work around this by manually or automatically placing limit orders with limits that go beyond the top of the opposite side of the book, ensuring that they'll match something.
Suppose someone places such a limit order. Rather than lock the book until the order is matched and produces a trade, the order is placed on the book and the book is allowed to cross. People have reported here on Reddit seeing this before. That's kind of surprising, but perhaps you're thinking they ensure things still execute in order. Well, the stream I'm watching includes both order and trade events, and I typically see orders on the stream anywhere between ~2.5s and ~8s ("the window") before they match and produce a trade; if you're only trading by watching BitcoinWisdom and others, I see things happen as much as 18s ahead of you.
What properly surprises me is that within the window, if another limit order gets placed with a limit even higher than the first before the first has matched, that second order can execute before the first. An example from real stream data follows. The best ask (order_type=1) is 202.10, set by the first order creation I've included. received is added by me on receipt; the rest comes from the live stream. Some non-participating orders away from the book top have been removed for clarity.
{"received": "1383077092.151", "type": "order_created", "price": "202.10", "amount": "3.00700000", "datetime": "1383077091", "id": 8595046, "order_type": 1} {"received": "1383077095.876", "type": "order_created", "price": "221.13", "amount": "0.19825903", "datetime": "1383077095", "id": 8595048, "order_type": 0} {"received": "1383077098.420", "type": "order_created", "price": "222.65", "amount": "0.63000000", "datetime": "1383077098", "id": 8595051, "order_type": 0} {"received": "1383077100.908", "type": "order_deleted", "price": "222.65", "amount": "0.00000000", "datetime": "1383077099", "id": 8595051, "order_type": 0} {"received": "1383077100.918", "type": "order_changed", "price": "202.10", "amount": "2.37700000", "datetime": "1383077096", "id": 8595046, "order_type": 1} {"received": "1383077100.964", "type": "trade", "price": 202.09999999999999, "amount": 0.63, "id": 1698465} {"received": "1383077101.016", "type": "order_deleted", "price": "221.13", "amount": "0.00000000", "datetime": "1383077099", "id": 8595048, "order_type": 0} {"received": "1383077101.051", "type": "order_changed", "price": "202.10", "amount": "2.17874097", "datetime": "1383077096", "id": 8595046, "order_type": 1} {"received": "1383077101.063", "type": "trade", "price": 202.09999999999999, "amount": 0.19825903, "id": 1698466} 
Bid 8595048 for 0.19825903 @ 221.13 would cross the book, and should match immediately, but orders continue to be accepted and no trade appears.
Bid 8595051 for 0.63 @ 222.65 would also cross the book, but since it arrived ~2.544 seconds later — and assuming FIFO matching — it shouldn't execute until after 8595048. But it executes first. In this case, fortunately there's enough depth to the ask that both fill at the price they should, but this out-of-order execution occurs even when there isn't enough depth; I can give real examples from the stream but they make less clear examples because they tend to involve multiple fills.
Imagine that you're watching this stream and you see the FBI dump the SR coins, and that the window is wide enough for you to react. You could place a limit order that beats theirs, being sure to sell your coins before theirs crash the exchange rate.
Alternatively you could always maintain a buy order in the book, far enough away that you can maintain a constant distance from the best bid but close enough that a whale might fill it. When you see a whale's sell, you snipe a high sell by beating their limit. The whale's order then goes through and fills some other bids, and your low buy. You effectively just made a high sale and made a low buy with no risk at all. You could do this on both sides of the book at once.
Why document this instead of just taking advantage of it? I hate the idea that some traders are playing with loaded dice. If the engine has to behave in this funky way, it should be documented; ideally it should simply behave as everyone expects it to anyway. Why post under a throwaway? While I've made no attempt to exploit this, I wouldn't put it past Bitstamp to confiscate my balances and close my account; that's simpler for them than checking whether I did exploit it. (In case I choose to link this to my real account later or you need me to prove I'm me, I can provide a pre-image for e591ed9a365ad73d29dc22f10b170fff and d4bd7f9db698c81ba31ce544d2025834.) Why not report it to Bitstamp first? Bitstamp has a poor track record for addressing bugs reported in their engine, probably needs to be embarrassed into doing something, and they can easily just disable the stream. I've left stream access details undocumented, for now. EDIT: described on bitcointalk (via Pusher) as well as below (direct WebSocket access).
I'd ask Bitstamp to confirm whether they believe this is a problem, say what they plan to do about it (if anything) and I invite them to PM me here in the unlikely event that they need more info.
I'd also really like them to make their stream useable, along with a single orderbook snapshot, to maintain an accurate of the orderbook without having to make unreliable inferences — i.e. include prev_amount (or amount_delta) in order_deleted and order_changed, and also include in each trade event the order IDs that matched. Having these things would bring it towards or beyond MtGox's stream, which provides at least the remaining volume at the affected pricepoint. It'd also be lovely if the ungrouped orderbook snapshot included order IDs and could be explicitly pinned between two stream order_foo events for easier syncing (the timestamp doesn't seem to accurately match the stream's datetimes, and requires guesswork). And a pony and a winnebago and the moon on a stick.
submitted by serves-two to Bitcoin [link] [comments]

A great request: history of market depth.

Is there somewhere over the internet a site that offer an history of the orderbook, so that is possible to see how the walls of ask and bid move and what shape take?
The best will be for all usd exchange but also one big exchange (mt.gox or bitstamp will be very good)
UPDATE: I find this discussion here
This is the most advaced analysis of the history of market depth (on mt.gox) until now
Useful links:
1 - https://en.bitcoin.it/wiki/MtGox/API/HTTP/v1#Full_Depth
2 - https://bitcointalk.org/index.php?topic=218980.0
3 - https://bigquery.cloud.google.com/dataset/931531665892:mtgox
submitted by pietrod21 to BitcoinMarkets [link] [comments]

Are Advanced Trading Tools Causing the Bitcoin Price Drop?

Arthur Hayes (CEO, BitMEX):
“No I don't think so, what is negatively affecting the price is the supply of mined Bitcoin and merchant adoption.”
Joseph Lee (CEO, BTC.sx):
“Trading tools by nature do not drive the price down. Their value to Bitcoin's economy is that more liquidity is given to the market. In other words, they may appear to control the market price, however in a free floating currency market (such as Bitcoin), supply and demand simply dictate the price.
One threat to Bitcoin is if business owners start running in a fractional reserve manner, whereby bitcoins held do not account for 100% of what should exist on their customer accounts. MtGox's demise was ultimately caused by a hack which caused a balance mismatch of this type. Regardless of the trading tool or business, whether it is a synthetic derivative or an exchange, the threat of immoral business practices will far outweigh affects of individual traders.
Bitcoin as an asset type is not shielded from the basics of economics 101, that is, that supply and demand dictates price movements. The market cap of Bitcoin is currently ~$5.5 bn. As an asset type this is tiny and large Bitcoin holders and high net worth individuals will have a far greater effect in controlling the (still small) market. In comparison the daily FX turnover in the wider world of finance averages $4 trillion USD.
My bottom line? Trading tools may appear to be a convenient scapegoat, however wider adoption as well as macro economic factors will dictate price movements far more then anything else. The most recent announcement from BitPay and Paypal highlights this fact very clearly.”
Changpeng Zhao (CTO, OKcoin):
"The recent price decline has led to people grasping at straws for the causes. The conclusion that it is due to the futures trading is absurd.
The basis of this conclusion is that by providing an avenue for traders to short Bitcoin on leverage is harmful as it adds downward pressure to the price. However, they are neglecting that these leverage tools are also present when the price is moving upwards, which happens very frequently; daily, hourly, and even every minute.
Furthermore, futures have been available for 166 years since it was introduced in Chicago in 1848. This is a very mature tool in established financial markets. There is never a saying that having futures will drive the stock market price down.
I believe that the highest risk of these tools isn't pushing the price of Bitcoin down, but rather ordinary users getting burned trying to trade with tools they don't have sufficient knowledge of. With this in mind, OKCoin will be releasing guides and video tutorials explaining just how these tools work and how everyone can use them to their benefit."
Thomas Xie (CEO, LakeBTC):
“There are a number of reasons but the most popular ones are leverage, price manipulation, and trader mistakes. Often these factors stack on each other to further worsen the situation, very quickly.
[..] It might not be the right time to introduce leverage trading, be it margin/short trading or P2P lending, to the Bitcoin world. Don't get me wrong - leverages, futures, options, plain vanilla or exotic, and all varieties of other derivatives and structured products are useful financial instruments, and LakeBTC will introduce them sooner or later. The thing is, market needs to be ready, and more importantly, the exchange itself needs to be ready.
Leverage is a weapon of massive destruction, just like CDO (collateralized debt obligation) and CDS (credit default swap) in the '08 financial tsunami. If not used properly, it's a disaster to everybody onboard. There are enough bad examples in the traditional capital markets that are supposed to be mature, liquid, and robust. Even the fixed-income and foreign exchange markets, which are well known for their unlimited liquidity and endless depth, are not immune to crashes.
Arming Bitcoin exchanges run by a bunch of geeks and technologists with financial WMDs? Not a good idea. It is always easy to copy something from the traditional markets. Running it right with appropriate risk management is what really matters here.”
Greg Wolfson (Senior BD Manager, BTC China):
“I see new products like futures, short selling and margin trading as healthy developments in the maturation of our industry, and I am not very concerned if they negatively impact the Bitcoin price in the near term. Rather, in the long run, these products increase liquidity, expedite price discovery, reduce volatility and lay the groundwork for yet more products and a more robust Bitcoin marketplace. While perpetual price increase is the dream of those holding long positions, these new products are important for price stability and broader adoption of Bitcoin among businesses and consumers.”
...
http://cointelegraph.com/news/112629/are-advanced-trading-tools-causing-the-price-drop-exchanges-experts-weigh-in
submitted by jadenlj to BitcoinMarkets [link] [comments]

MAD Doge - Market Analysis 2/8/2014 (Such Snow Edition) Diversify! PONZI-COINS! Much More!

Good evening, I hope you're surviving the weather, wherever you are!

Let's begin warming up with a bit of news:

Over the past few days, the BitCoin exchange MtGox has fallen hard, due to a variety of reasons. One of the reasons being a possible hodge-podge system for tracking payments, another being the implementation of regulations for different countries. As far as we're concerned, stay away. Mt Gox was the only USD/BTC exchange we recommended since they were verified against money laundering, for the near future, we're looking to alternatives.
In case you were asleep for the past few days, DogeParty happened in NY, there was a lot of shibery, some T-shirts, and a large amount of expenses. Let's go in depth with this a bit.
I'm not trying to say that DogeCoin should be all about the serious business stuff, let's just be prepared when people on wall street (where the party happened) ask serious questions. If you want to get new "Happy-go-lucky" people to join, go to somewhere there are already happy-go-lucky people, don't ask a bunch of suit-and-tie people to throw on a Shiba Inu mask and dance like a fool.
That being said, I noticed a lot of money went to pay for the party, but could not see where the expenses went, a few things were auctioned off, but of little actual retail value other than art, if we want to be taken seriously (by businesses) we need to demonstrate that we can be serious enough to have normal transactions.

Topic Change! - DIVERSIFY!

ALL OUT WARNING!

So stay away from these coins, they might sound great in some ways, but any coin that is that centralized (SoOOOo Snap...Shibe went there) has flags going up everywhere.

Much More!

Explanation of Current MAD Doge Status

Until Next time, here's a link to an awesome DogeCoin Video LINK
SHIBE ON!
submitted by DRKMSTR to MADDOGE [link] [comments]

MtGox's demise provides an opportunity to establish an interbank-like mechanism for Bitcoin exchanges.

** The Bitcoin Exchange Landscape is a Sorry Sight**
Whether you believe MtGox' stories, or you think they're flat out lying to prevent a panic just long enough to reimburse as many of their members as possible with whatever they have left in the order of their choosing, it's clear that the world of bitcoin exchanges has been shaken up. This creates an opportunity for change.
If we let things stand, in a few months time, we'll be right back to one exchange dominating everything. Maybe it'll be TradeHill, maybe MtGox, maybe something else. Regardless, we'll end up with another centralized chokepoint waiting to be taken down to send the entire economy in disarray, be it by hackers, insiders, or governments.
Unless something changes, new users to bitcoins will continue to flock to the bigger exchange, because it will have the most liquidity. This makes it difficult to foster an healthy exchange ecosystem.
A Bitcoin Inter-Exchange Mechanism
To prevent a repeat of the current situation, we need a mechanism to link bitcoin exchanges together. With that mechanism, relatively small exchanges would be able to offer similar, albeit not identical, price action, making them more attractive to prospective users, and allowing exchanges to compete on features rather than on their sheer size alone.
Such a link would require some amount of trust between exchanges, which could be mitigated by having participating exchanges place currency reserves with a trusted third party (ClearCoin?), with the amount placed correlating to the amount of inter-exchange trading allowed between settlements.
An exchange should be able to deny inter-exchange transactions from another exchange if the balance owed by that exchange exceeds the amount in reserve for that particular inter-exchange link.
An exchange seeing their inter-exchange transactions getting denied could re-balance the link by sending transactions in the other direction.
Additionally, there should be regularly scheduled settlements, where any balance left would be transferred to bring the link balances back to 0 (Dwolla, BTC, whatever. The faster the better.)
Once that's in place, it would become possible to have a mechanism to let an exchange show its users a market depth based on multiple exchanges.
** Global Self-Enforced Trading Rules **
One interesting feature, as hinted above, is that it would provide a natural cut-off mechanism to trading frenzies, limiting the damage of one exchange imploding to that exchange alone. It could however be desirable to extend that mechanism further and have exchanges agree on global cut-off rules that would give the market a few hours of respite when things get a little bit too wild.
Finally, it would be useful to have an over-seeing entity to define those kind of rules. They would not be an exchange themselves, and in fact should not be touching any money themselves. All their rules should be public and scrutinized, and it should be made very clear which exchanges do and do not follow them. An exchange that does not would of course not be allowed to link with an exchange that does. An exchange that pretends to follow those rules but is caught violating them would risk getting thrown out of the inter-exchange.
Anyway, that's the rough idea. It seems technically feasible, levels the playing field for smaller exchanges, and decentralizes the exchange market.
What do you think, /bitcoin?
submitted by itsnotlupus to Bitcoin [link] [comments]

The bitcoin price would crash to about $115 if the FBI sold the seized bitcoins right now. Is this correct?

At the time of writing, the market depth on MtGox indicates that executing a sell order for the equivalent of the seized amount of coins (~$3.3 million, or 24'000 BTC) would make the price plummet to $115. Is this correct? This will eventually happen, so until those bitcoins are not sold, we have to factor this into the bitcoin price, correct? We know that with a high probability they will be liquidated, as stated by the FBI.
submitted by soloFeelings to Bitcoin [link] [comments]

Exchange report: bitfinex - 4.5 star

Heard user byronbb talk and Cylta from irc speak about bitfinex and decided to try it out. I believe part of the reason the prices have wildly shot up lately is due to the lack of a good options or margin trading market. Bitfinex aims to solve the latter at least.
Features:
"Regular" exchange - buy and sell bitcoins for USD. The entire exchange works off of MtGox, so there is always liquidity. There is an internal exchange that offers extremely low fees (0.1%) if traded internally. Even if you end up trading on MtGox, you'll only pay 0.4%, which beats the low volume price of 0.6% from MtGox. Funding options are limited, but I like the idea. I only tried using the MtGox codes funding options, which is actually superior. It is instant and you get to keep your money at MtGox for security.
Margin Trading - Up to 5x leverage. Since prices have been going up non-stop, I decided a correction was in order at $47. It kept going up to z$49 after I shorted a large amount, but I decided to short more at $49. The low interest rates provided by other users made that easy. I ended up making a healthy chunk of coins when it dropped to around $43-44.
Lending - All lending is peer-to-peer. When I first got in, the rates were very reasonable (as low as 5.5% APR) and there was nearly 1k coins offered to be loaned. It is a great way for someone to me safely making interest on their bitcoins, and gives opportunity to others like myself, to take risks and make big bets. (If you look now, the rates are much higher, probably because of me, but that's an opportunity for you to offer lower rates and make a great return on your bitcoins).
Basically, in terms of features, I'd say Bitfinex only lacks an options market. Otherwise, it is doing exactly the things I'd imagine an up and coming exchange would do to challange MtGox. Although Bitfinex is basically leeching off of MtGox right now, it has the potential to be a solid second place soon, especially since the fee's would attract many professional traders.
The only bad things about it now is the UI/UX, which is extremely confusing for a first time user. I recommend playing with small amounts of money first, and seeing how everything works.
Final Thoughts:
Volume for the last 24 hours is 11632.23 BTC, officially making it the 2nd largest USD market, only 1 month afte its release. The site is definitely well thought out, and well executed. We will soon live in a world not dominated by 1 exchange. There's also the additional benefit of located off-shore, in Hong-Kong, for those who might be concerned about the Coinlab move.
I'm not sure how Bitfinex execute orders on MtGox fairly quickly and discretely. When I submit the order, I never see it show up on the MtGox depth chart, but even with all the lag today, orders didn't seem like they took longer than they would have at MtGox. If anyone knows how they do this, please elaborate.
I highly encourage you to give Bitfinex a try. It's going to be worth it. And if this review was helpful to you, or made you money, than consider making a donation to: 1wUAhcgT2CgGhsG2zeYeqi2TYx1Efuqb7
Cheers.
submitted by sirkent to Bitcoin [link] [comments]

Just released an open source Java library for interacting with Bitcoin exchange APIs and want to get the word out.

The project is called XChange and the code can be found on Github. So far it provides support for:
We plan on adding MtGox streaming public market data and private account data next, followed by Intersango, and InteractiveBrokers, a traditional financial broker of stocks, forex, etc. See Milestones for more details. Someone left a feature request today, asking for hooks into the Bitcoin Charts Ticker API, which we'll probably add soon.
XChange has already been integrated into Multibit, showing near-real-time ticker data from MtGox directly in the client.
Any criticisms/thoughts?
submitted by herrtim to Bitcoin [link] [comments]

Only 28K BTC left for sale on MtGox

Have a look at http://bitcoinity.org/markets?currency=USD&exchange=mtgox
There you see a + / - to zoom (Top right corner of the market depth chart) I have never seen such low supply of BTC. I guess there's a lot of sellers hidden because they haven't put in any orders yet. But this is kinda unprecedented afaik. I started looking when there was a nearly vertical price spike from 220 to 240.
If markets were crazy when they passed $100 or batshit insane when passing $200 I have no clue what to call this.
As a small reminder. This was not so long ago And I guess if I would search a bit longer I would find bigger ones.
submitted by obeleh to Bitcoin [link] [comments]

[Table] IAmA: I'm the CEO of an online underground black market, AMA

Verified? (This bot cannot verify AMAs just yet)
Date: 2013-06-08
Link to submission (Has self-text)
Questions Answers
Aren't you worried about bringing more attention to your site by doing something like an AMA rather then just relying on word of mouth? By doing something like this don't you run the risk of law enforcement agencies paying more attention to the fact that you exist? We want to bring attention to the site and bring our vendors more buyers. Law enforcement is going to be aware of us (and probably already is) regardless of the way we choose to put our product out there.
What made you decide to go into the business of running such a site? Just the money? Or other reasons? It was the appeal of providing a service that we believe in and a business decision. Prohibition is a backwards process.
We have taken technical measures to prevent and offset these risks if they arise. As for our identities being revealed, if a competitor is able to do it then law enforcement would be able to do it. That would be of a larger concern to us. We take many measures to protect our identity.
There are many legal items for sale as well, but the bulk of our items are drug related. We have no preference over what gets sold (assuming it does not break our restricted items rules).
We are indeed. We're looking for a web marketeSEO willing to be paid in Bitcoin.
Im curious as somewhat of amateur SEO marketer, how does one market a Tor Site? Surely it can't be done in regular ways such as adwords, keyword optimization, etc, etc. It is true that we can't use regular methods however we are after a person who can make YouTube how-to videos, create forum posts in various communities to increase the exposure to our site.
I've done some marketing and SEO, so just drop me a PM if you still need somebody. Thanks for your interest plerer, please PM us with your experience.
So how many inboxes have you gotten from people asking for jobs? If you aren't sick of them already, I'm interested in at least more information. I'll send a message should you reply to this. We've received about 20, but we're still looking.
Are you looking for resumes, cv's? how are you choosing a candidate? Based off previous work, and whatever data the applicant is comfortable providing.
What are your restricted items? And why don't you allow people to sell them? Restricted items include anything related to paedophilia, poisons, loans, investment opportunities, assassination services or anything which can inflict harm on another person. If you infringe on these rules we will terminate your account instantly.
Trading any digital currencies (for example Bitcoins, Litecoins, Ukash, Moneypak, Western Union, Moneygram, etc) is forbidden and will result in the items being removed and a warning or ban being issued to the vendor. This is to prevent scams.
The trading of counterfeit money is forbidden, and will result in a warning or ban being issued.
We also do not allow listings for 0.01 in the money section. Your items must have a full cost associated to them to prevent people processing transactions outside of the escrow system.
We allow the purchase of physical fiat for Bitcoins and/or Litecoins (has to be legitimate currency; not counterfeit). This is the only exception to the currency rule. We do not, however, allow the reverse of these transactions i.e. customers mailing vendors real currency as this is outside the escrow system.
As an example, if you were a vendor and you wanted to buy $1000 worth of Bitcoins/Litecoins you could do so by making a listing for $1000 labelled "Buying $1000 worth of Bitcoins/Litecoins", and then mail the real currency to the purchaser of your listing in exchange for their Bitcoins/Litecoins that are currently travelling through the escrow system.
Why are investment opportunities banned? Because they're commonly used as scam tactics.
What about fake Ids? Can you guys make/sell those? Our vendors sell a lot of those.
Why is counterfeit money banned? Part of the "harm to others" rule? It's frequently used in scams. When we allowed it, 100% of the counterfeit money sales were scams. It's also hurting local businesses etc.
Would you mind posting a link to the be-all, end-all, one stop tutorial installation page to safely and securely start using TOR, Bitcoin and Atlantis? 1) Download and install the Tor browser bundle - Link to www.torproject.org 2) Download and install the Bitcoin client - Link to bitcoin.org 3) You'll need to obtain some Bitcoins. The most popular exchange is MtGox (www.mtgox.com). They offer a few ways in which you can convert your local currency to Bitcoins. 4) Using the Tor browser, visit Atlantis (URL can be found at /Atlantis) 6) Click on the deposit BTC link under account settings and transfer your Bitcoins to that address. You'll need to wait for 1-2 hours before the transfer propagates across the network. 7) You can then shop for any items you would like whilst being confident on security and privacy.
Someone help me with step 3? Its just telling me I cant open the program. That step is optional, you don't HAVE to use PGP. Especially if you just plan on having a browse.
Just commenting to find this later. )
Can you send me some drugs? Edit: Not a cop. Our vendors can.
How do you rate yourself compared to the road? We've had no downtime.
Our site is much more responsive.
We have cheaper commission rates allowing sellers to make more profit on their sales and buyers to buy them for cheaper.
We have automated PGP encryption of messages for the members who refuse to send their messages using PGP. We have an advancement fan management system, allowing sellers to reach out to all of their customers.
We have a more 'modern' user interface.
We have buyer feedback (none of the other marketplaces have this functionality).
We have an anonymous feedback system that allows you to determine is feedback is fake, but at the same time does not reveal anything about your buying patterns.
We support Litecoin as well as Bitcoin (the first market to support multiple currencies).
We listen to our user feedback, we have a rapid development cycle and new features are constantly being improved upon and added.
I'd like to personally thank you guys for everything you do to make online drug purchasing a safer and better experience. +altcointip 1 ltc. That's very kind of you, thank you! :-)
We've had no downtime. What do you say to all of the rumors that you were funding the DDoS aimed at the Road when your site first came online to pull traffic? We released an official statement regarding those accusations, it can be found on our forum. In short: We had nothing to do with it. It was speculative rumor.
What are you doing to cut down on scams and discrimination against new buyers? If your rules are that vendors are not supposed to deal outside of escrow, what are you doing about those vendors who require it in their policies? > "Yes we have caught scammers, but we've banned them swiftly. We pushed out new changes earlier that helps reduce the number of scams, all feedback contains the amount of the purchase, preventing users from leaving fake feedback on $0.01 listings. It also contains an 'anonymous' user ID so sellers/buyers can confirm whether the user leaving feedback has left feedback before. This helps catch scammers leaving fake feedback. The ID is unique to the sellebuyer combination, so it cannot be traced across transactions to determine a buyers buying patterns."
Further to the above we've made it easy to report suspicious vendors, there's a button directly on their profile that will notify support.
In regard to the vendors that require it in their policies, they will be warned or banned if they request FE without meeting our FE requirements (a minimum of 30 5/5 transactions). This system has already saved countless people from scammers.
New buyers are encouraged to purchase small orders first to build their reputation and feedback and find vendors who are pleasant to deal with. I haven't seen a problem of buyer discrimination yet (apart from on scammer profiles saying 'you must FE because you have no feedback').
If I am not mistaken, the Black Market Reloaded also has buyer feedback. Not that I would know, as I never go to such sites... I'm not sure, but I've heard its a haven for scammers, and they have no escrow process.
How about weighting reviews based on the amount of funds transferred? E.g., a $10 transaction review is worth 10x the review of a $1 transaction. This is a good idea, however this would impact the freshness of the feedback if we sort it by the value.
Aren't you worried the authorities are tracking this ama? They probably are. We aren't worried.
Why did you decided to accept Litecoin first? Also do you think Litecoin price will go up because of your site? Also how long did it take to prepare and set everything up? We wanted to promote Litecoin because it has a few awesome improvements over Bitcoin, so we started with Litecoin. I think a lot of the value has come from Atlantis already, and more will come from Atlantis with our growth. It's taken a year to get the site where it is at the moment with a few developers working on it mostly full time.
I've checked out atlantis, purely out of curiosity. I don't do drugs at all, but it seems that the prices are higher than street prices. Why do people prefer to buy on Atlantis? Is it due to knowing they're getting good quality? It seems riskier than buying drugs on the street. Greater quality, ease of access, safer than dealing with unknowns on the streets. A lot of people don't have access to a friendly in-person dealer.
The prices vary, some are actually cheaper then what you can find on the street.
Some of the main reasons why people choose to purchase off Atlantis include;
1) Quality of the merchandise. Because of the sites feedback and reputation system, you can be certain that you will be receiving an unadulterated item.
2) Order in the comfort of your own home and have the parcel delivered to you (with tracking).
3) Thousands of items to choose from. Sometimes a local dealer will not have a product you are after.
4) Deal with currencies which can be used to purchase items without the reliance of fiat.
5) Encrypted correspondence, more secure then messaging/calling your local dealer.
So how is it possible to get delivery anonymously? i mean, at some point don't you have to give your name and address to the seller? And if they are ever busted and you are in their database as a customer; aren't you kinda...you know...fucked? Thanks for the AMA by the way. Some purchasers use fake names to hide their identity, others don't. We have a strict rule where vendors must remove all information about their clients once the parcel has been shipped (e.g from their computer). Also, once the order has been shipped, the address is automatically purged from our database.
How do you enforce a rule like that? what's to stop a vendor from simply writing an address down on a sticky note? Unfortunately we can't enforce it, we can only advise them to do it. Our system also permanently deletes this information after first viewing.
So...you're an online drug dealer? How is this legal or how are you skirting laws to keep yourself from prosecution? I don't know of any countries/territories where selling Heroin would be legal. We're not a dealer, we provide the platform for dealers to sell their products in a secure environment. The Tor network hides our service from government officials. You can have a look into "Tor hidden services" if you're interested.
How do you usually guarantee the safety of your "company' and the buyer? We use a Tor hidden service to hide our service from the prying eyes of government officials: Link to www.torproject.org
Do you ever deliver in bulk? This allows our servers IP address and location to remain hidden.
Are there any suppliers that you deal where they are a legal company on the surface? Users must access our site using the Tor hidden browser, protecting their identity: Link to www.torproject.org
What are your personal political views? What about certain topics like child pornography, necrophilia or any other cultural taboos that are usually at the expense of another unwilling person? We don't deliver anything, but our sellers commonly deliver in bulk. We facilitate the platform, the sellers are from the general public.
What are your top non-drug related products? See above.
Is your company white collarish or do you have people who work with you that use violence and intimidation? We do not allow listings such as child pornography and necrophilia. We do take a moral stance, there's a large difference between child pornography and drugs.
Is government bribery common with your company? Probably porn.
We don't use violence or intimidation, nor do we have any need to. We're an online platform. The idea is to move away from the violent streets.
No, that doesn't happen (or hasn't happened yet).
Oh I see so basically your site is like the middle man am I correct? Alright that does make a lot of my questions moot. That's correct.
Have you had any scares before? None.
How illegal is Atlantis? I mean, not for the vendors/buyers, but how illegal is it as the CEO of the website? (Basically, how much trouble would YOU get into, if shit hit the fan?) Google "farmers market bust" for an example.
What did those men do wrong, and do you think you've solved to that issue? A lot of silly mistakes and using very traceable means of trade.
A screenshot of a website doesn't really prove anything. Do you have any proof that you are the CEO of this company? I've added a link to the AMA on the footer of the website.
Without going into any personal details (obviously) what brought you to this biz? I.e. formal versus informal education... comp sci vs. Mba-type edu... or whatever ur able to say. Can't go into education specifics sorry.
Also, as someone who is intrigued and has made half-assed attempts to get a bit/litecoin account setup and given up after hitting various obstacles, am I right to assess your biggest barrier to growth are the hurdles customers need to jump through to make transactions? Or am I just a stupid brain? If you'd like any assistance getting set up let us know, we can point you in the right direction. The seeming complexity of cryptocurrency is definitely a barrier to growth. It's all relatively simple once you get your head around it though. Bitcoins/Litecoins are far easier to obtain in certain countries than others.
Do you keep lawyers on retainer? We have a few lawyers using our platform to offer legal advice for a fee.
Hi. I have never posted/commented on reddit before, after about 5 years of being a lurker. This is too cool an opportunity not to. It's progressed to a full time job for us at this point. There isn't a day we aren't working on Atlantis.
How many hours a week on average do you work? What do you do outside of work for fun? What kind of music do you listen to? I'd love to answer those questions but they're a bit revealing sorry.
What is the biggest security threat you have had? We did a lot of planning in relation to this and haven't had any security issues so far. Our biggest concern would be if a security flaw was discovered in the technology we rely on (e.g flaw in the onion routing protocol or the Bitcoin protocol).
I've heard these sites are much more common than people realize. How much traffic do you guys get? We're one of the largest markets, and the most refined. We get thousands of visitors and hundreds of orders are processed through Atlantis a day.
How come you can post this here and not be instantly arrested? Link to www.torproject.org
Link to en.wikipedia.org
What does one sell on a black market that falls under the "Home & Garden" section...? Ikea lamps...
And nutrient dense soil, growing equipment, CFL's, HPS lamps, etc.
Why do buy / sell these types of items on the black market rather than any major online retailer? Since we use cryptocurrencies its a good way for people to use them to buy other items. Think of it like eBay but with a twist.
Are you worried that your usage of Tor contributes to undermining its image as a legitimate utility for online anonymity, in the same way that Bittorrent is often immediately associated with piracy? We hope that our usage does not tarnish its perception of being a legitimate tool. The core of our operation is to give people access to a 'true free market' whilst still protecting our users and ourselves. However just like a knife - it can be used for good and for bad.
We can only hope that the media and government doesn't portray Tor as a tool used by 'terrorists and criminals'.
Have you caught any scammers yet? Yes we have caught scammers, but we've banned them swiftly. We pushed out new changes earlier that helps reduce the number of scams, all feedback contains the amount of the purchase, preventing users from leaving fake feedback on $0.01 listings. It also contains an 'anonymous' user ID so sellers/buyers can confirm whether the user leaving feedback has left feedback before. This helps catch scammers leaving fake feedback. The ID is unique to the sellebuyer combination, so it cannot be traced across transactions to determine a buyers buying patterns.
Whilst you have swiftly banned sellers, can't they just make a new account? With the nature of TOR you couldn't ban their IP could you? That is correct, we cannot ban them by IP (there is no distinction on the Tor network). They would need to pay a new vendor account fee every time they create a new vendor account.
What are you doing to cut down on scams and discrimination against new buyers? We have implemented a few metrics in the feedback system, these include;
1) Buyer and seller feedback, rated in quality (out of 5).
2) Total purchases made.
3) Account age.
4) Item price in feedback history.
5) User hash which allows people to identify if the buyer is unique or the same person leaving fake feedback whilst still keeping their username anonymous.
We are currently working on two new metrics, these include;
1) Was the parcel received.
2) The users historic purchase total.
Unfortunately new buyers will always be a risk for vendors however with parcel tracking and the escrow system, these risks can be mitigated.
What's the best selling item? The most popular item is Cannabis.
What non-legal things other than drugs are done through your site specifically what's the most common things non-drug? Popular non-legal items other then typical illicit drugs include money handling services, identity services (generating passports) and cybercrime (malware).
The most common popular legal items include books, digital goods, legal money services and erotica.
So the site says I can get a FREE half gram of hash... do they actually send you that? Yes, vendors commonly offer free incentives to gather good reputation at the beginning of their seller career.
How did you get your first customers ? How did you advertise the site like this in the first place and create the initial market base? We posted an announcement in two cryptocurrency community forums and the news spread quite quickly.
We also offered incentives for vendors at other market places to sign up and take advantage of trading with no commission fees.
Where does your revenue come from, if you have no commission fees? Is it purely from cost associated with becoming a vendor? When we were running the 3 month commission free special, our income solely came from the vendor registration fee.
Our current commission structure can be seen below;
Value less than or equal to $50 6% Value less than or equal to $150 5.5% Value less than or equal to $300 5% Value less than or equal to $500 2% Value less than or equal to $1000 1.5% Value greater than $1000 1%
Do you have a retirement plan? Like quit and let someone else take over in a year? Everyone does gets busted in the end. Hell even anonymous. Usually via neverending greed or pride. We don't plan on retiring anytime soon, we've only just begun :)
How much do you make ?(give us a range ?) Is the money vs risk worth it ? Unfortunately we can't give you specifics on how much we earn however all of our profits have been used to enhance our platform. We take more pride in forming a true free market place rather than the dollars earned.
That's actually pretty cool, thanks. Oh also what made you want to get into this buisness? We love cryptocurrency, libertarianism, technology and saw an opportunity to make a free market place when SR was experiencing frequent down time.
Are you a regular customer at Atlantis yourself and what do/did you buy? We do everything on Atlantis except for buying products on it ;)
What is the craziest item you have ever sold? The top two items would be used sex toys/underwear (female vendor) and fig tree cuttings.
Fig tree cuttings? Can't someone just buy that on Ebay? O.o The ones from Atlantis are prettier.
How pure is the coke? It depends on the vendor. They advertise the purity on their product, the majority of it seems to be in the 85% range.
Why would the purity matter, and wouldn't someone prefer 100% pure over something that was cut with other items? Purity matters because you require less of the drug to get the same effect. Other than that it's mostly irrelevant. Yes, you would prefer 100% purity. 85% purity is very high compared to most street cocaine. On average, street cocaine is around 50% purity.
What exactly is usually put in cocaine other than coke to dilute the purity? Benzocaine, Caffeine, Phenacetin and sugars are the most common impurities.
Doesn't "CEO" relate to corporate organizational stucture? Why is a black market operating as a legal company would? We're still an organization and an organization requires leadership.
What's up with al the cats??? Incognito mode.
How much does your physical location matter to run a business like yours? Would it be any easieharder if you were in say, Somalia or on a ship in the ocean in International waters? We have team members in various different countries. I would say physical location is relatively irrelevant. We can access our systems from anywhere, and our location and the server location is protected by the Tor hidden service network.
Is there anything that you will not sell on your website? Restricted items.
Restricted items include anything related to paedophilia, poisons, loans, investment opportunities, assassination services or anything which can inflict harm on another person. If you infringe on these rules we will terminate your account instantly.
Trading any digital currencies (for example Bitcoins, Litecoins, Ukash, Moneypak, Western Union, Moneygram, etc) is forbidden and will result in the items being removed and a warning or ban being issued to the vendor. This is to prevent scams. (See exceptions below for exceptions to this rule).
The trading of counterfeit money is forbidden, and will result in a warning or ban being issued.
We also do not allow listings for 0.01 in the money section. Your items must have a full cost associated to them to prevent people processing transactions outside of the escrow system.
We allow the purchase of physical fiat for Bitcoins and/or Litecoins (has to be legitimate currency; not counterfeit). This is the only exception to the currency rule. We do not, however, allow the reverse of these transactions i.e. customers mailing vendors real currency as this is outside the escrow system.
As an example, if you were a vendor and you wanted to buy $1000 worth of Bitcoins/Litecoins you could do so by making a listing for $1000 labelled "Buying $1000 worth of Bitcoins/Litecoins", and then mail the real currency to the purchaser of your listing in exchange for their Bitcoins/Litecoins that are currently travelling through the escrow system.
Regarding the IT infrastructure, Do you own the servers that host the website? How are the servers connected to the internet? Is it a corporate leased line or just some dodgy hacked cable modem :) Without going to depth, we use dedicated servers provided by a hosting company. All servers are equipped with a 100Mbit WAN link.
I'm probably misunderstanding Tor a bit here then, but how come the hosting company doesn't get into hot water and told to stop hosting Atlantis? Tor traffic looks similar to SSL and our hosting provider doesn't snoop on our servers :-)
Do you pay for that in bitcoins? Is the server encrypted such that someone with physical access couldn't discover its contents, should they choose to? We pay for the servers via anonymous methods and the disks are encrypted. However when running certain applications, the vulnerable point would be RAM.
I'm not sure if the second is possible whilst also offering an internet service, you must have unencrypted stuff in RAM? We also monitor the data center for unauthorized access.
. To me hosting seems to be the weakest link in your personal security (I'm sure users are fine with your encrypted messages). Have you considered distributed hosting on other darknets like freenet? For all the services we offer, we have redundant servers ready to fail over to.
I hope i'm not late to the party, but do you have any thoughts/reactions towards the current chatter regarding PRISM and the NSA? Maybe you can talk about some precautions you took or are taking as a result? Never too late. It's quite scary actually. Tor, SSL, PGP, OTR, all of these technologies are your friends.
Although I will say this is nothing new, the NSA has been doing this for years now. I guess it's finally caught up to them.
We haven't started taking any new precautions as a result, we were already using them.
Would you say that those tools are your friends even if you're not interested in anything too illegal? Props for your efforts though, must be interesting to run that kind of company :) Definitely, with PRISM making headlines this week its always good to protect your privacy.
What is the airspeed velocity of an unladen swallow? I believe it's 11 meters per second.
Had anyone ever been caught in sting operation? We haven't had any incidents reported to us yet (most vendors are very careful and security conscious) however we have read a case in the past where a vendor was caught on a different market place. The market place wasn't to blame, it was just that the vendor wasn't careful with his operation and thus got discovered.
Whats a "virtual credit card"? Prepaid virtual credit cards aren't issued by a bank, have no contract, usually have a set amount and can be used online.
Can't access your site (yet) but do you have vendors in Australia? We have a few Australian vendors, yes.
You're probably not still around, but is it even possible to order items on your site from Japan? I have not even looked at Atlantis or SR because I don't think it's even possible. To my knowledge yes. But don't quote me on that. I think I remember seeing a few Japanese located vendors.
How does a typical black market starts up? For us, we love cryptocurrency, libertarianism, technology and saw an opportunity to make a free market place when SR was experiencing frequent down time.
When deciding for your brand or website name. What other names did you consider besides Atlantis? I like the name it has now just curious to know of the brainstorming behind the site. Also I love your website! Thank you! I can't actually remember any of the other names we considered, probably because they were all bad. Atlantis stuck from the beginning!
And you're welcome, thanks for using it.
Last updated: 2013-06-12 05:44 UTC
This post was generated by a robot! Send all complaints to epsy.
submitted by tabledresser to tabled [link] [comments]

Tax implications of loss/theft/insolvency of Bitcoin investments

I was reading through the instructions for IRS Form 4684 for 2014 and it seems like there are a couple scenarios where Bitcoin losses might be tax deductible. Full disclosure I'm not a tax professional or expert and you should consult your own tax adviser before filing anything or making decisions.
CAPITAL LOSS Selling trading, or purchasing goods with Bitcoin can be reported as a capital loss on Schedule D, if the fair market value on the date of sale was less than the adjusted basis. This is the standard way that most US Bitcoiners will have to report Bitcoin losses or gains to the IRS. This is also covered in depth by others who know more than me so I won't go into more detail.
THEFT Bitcoins that were stolen from you qualify for Form 4684, providing you can prove, in accordance with IRS Pub 547, that the coins were yours and that they were stolen. For example the Coinapult theft earlier this month would seem to meet the IRS requirements for this type of loss of an individual's Bitcoins. Proving the stolen coins were yours if the IRS questions your return is a tough but solvable issue, but I'm not really sure how anyone could prove the coins were stolen in the first place. This seems like a huge trust/credibility gap that any exchange or service has to overcome when reporting that funds were stolen. How does the IRS, or a customer for that matter, know that the wallets where the funds now reside are not also controlled by the party claiming loss? This complication makes claiming a loss due to theft a bit risky in my mind, but others may disagree.
Pub 547 also provides special rules which apply specifically to Ponzi scheme losses; however, the guidance specifically excludes mislaid or lost property from meeting the definition of a theft. This would indicate if you simply lost/erased your private keys or accidentally sent your Bitcoin to a wrong address that wouldn't count as theft, but it could qualify as a casualty.
CASUALTY A casualty is defined as the loss of property by an identifiable event that is sudden, unexpected, or unusual. In addition to meeting the sudden, unexpected, and unusual tests, Pub 547 also addresses what factors must be proven to support the deduction of a casualty loss.
The guidance lists a bunch of deductible losses and some exceptions which are non-deductible, but few of them seem to be relevant to the kinds of situations most Bitcoiners are likely to face. If access to your private keys is cut off because a computer was destroyed due to fire, flood, earthquake, etc, that would seem to qualify as a casualty loss, as would the computer storing the keys. Also of note is that progressive deterioration and your own negligence would probably disallow you from claiming a casualty loss, so make sure to make backups, especially if the computephone running your wallet software is getting old or prone to data loss. This probably also means simply misplacing your private keys, or writing down a brain wallet incorrectly wouldn't qualify for a casualty loss, though I'm not very confident of this interpretation and would love if someone with more expertise would clarify this point.
LOSS ON DEPOSITS Finally, according to the guidance, a loss on deposits occurs when a bank, credit union, or other financial institution becomes insolvent or bankrupt. One question is what would officially constitute a 'financial institution'. I'm not sure about non-financial services or apps like ChangeTip or Purse.IO, but it would make sense that Bitcoin exchanges would qualify.
If you lose deposited funds, you can elect to treat the loss in one of three ways: as an ordinary loss, a casualty loss, or a nonbusiness bad debt. The rules get a bit complicated here, but my reading is that a nonbusiness bad debt may only be claimed if and when the amount lost is actually known and officially determined; whereas, a casualty or ordinary loss may be elected based on estimates and before an official determination is made. Because of this distinction I think a nonbusiness bad debt cannot be claimed until a customer knows what, if any, amount of a bankrupt institution's funds will be liquidated to cover the customer's deposit losses. Sorry Mt. Gox creditors, you may have to wait a while if you want to elect this option.
The guidance also specifies where to report the loss of deposit based on what type of loss is elected. Ordinary losses go on Schedule A, line 23 and are subject to floor and ceiling limits. Also of note is an ordinary loss cannot be elected if the deposit is federally insured (e.g. FDIC). Casualty losses, also subject to limitations, are reported on Form 4684 and Schedule A, and nonbusiness bad debts go on Form 8949 and Schedule D.
So that's basically my reading of IRS guidance as it relates to the deductibility of Bitcoin losses. Again, I'm not an expert or a tax professional, but I'm interested to hear your comments, corrections, and input. Feel free to check me out on Twitter, and I'll probably end up posting this on Wordpress. Thanks!
submitted by BlakeChain to Bitcoin [link] [comments]

Calculating price of BTC via MtGox? Questions from a newcomer!

So I've been really interested in Bitcoin for the past few days. I'm really new to finance/economics in general so terms like market depth are pretty new to me.
What I was wondering, was how does MtGox calculate the price that it shows on its front page? Is it possible to use the MtGox API and calculate a 'theoretical' price at which a Bitcoin could be bought/sold for by using past trade information?
Also, if anybody could explain market/currency depth to me in terms of Bitcoin, that'd be awesome. If you have links to other resources that could help, great! Thanks.
submitted by mansalo to Bitcoin [link] [comments]

THE CRASH THAT WASN'T: Now that we are right back at last weeks historic high of $125 can we even call less than 48hr trading outage related spike correction a "crash".

just wanted friends here to realize that bitcoin did not in fact crash.
It is right back at it's record breaking level of $125 from last week.
Sure some caught a spike at $220 but that trading was light compared to overall.
The MSM illusion created to scare you from bitcoin is false.
http://bitcoincharts.com/markets/mtgoxUSD_depth.html
submitted by georedd to conspiracy [link] [comments]

Who will buy mtgox?

From the standardcrypto blog:
I worry about MtGox. This week I worry less than last week, because the chatter about insufficient liquidity is dimmed, and the Gox/Bitstamp difference has recently been as low as $4, and is now under $10. Maybe everything will be fine. I speculated a couple of weeks ago that even with a serious bitcoin net short position MtGox could engineer its own bailout by supporting litecoin.
Still, like my scoutmaster used to say before a backpacking trip: "Hope for the best, prepare for the worst."
A meltdown at MtGox would panic the bitcoin markets, antagonize US regulators, and slow down adoption. The bitcoin community should seriously think about how to avert, or at least cushion, worst case scenarios.
So, I worry.
I think, too, about just not hitting the publish button. After all, who wants to start a bank run on what is morally the bitcoin central bank? But I think there are enough people talking about potential problems at MtGox, and the situation has dragged on long enough, that I won't be adding too much fuel to the fire with my speculative maunderings. To my serious readers, especially those with money at Gox: please don't take this in the spirit of shouting fire in a crowded theater. Instead, understand a plea to treat a dangerous situation with the gravity it deserves, and ideally to stock up on fire extinguishers while there is still time.
To summarize the current situation, there is a problem withdrawing USD from MtGox, and here and there we see evidence of problems withdrawing EUR and even BTC.
http://www.google.com/#q=site:bitcointalk.org+mtgox+withdrawals
BTC therefore trades at a 8-15% premium on MtGox compared to the other major exchanges, and traders talk of "MtGox price" for bitcoin versus the price elsewhere.
http://bitcoincharts.com/
Big traders keep patronizing MtGox for several reasons. Habit/Inertia. The higher prices are great, if you believe MtGox will eventually solve it's problems, or that failing that you can beat the stampede to get out in time. MtGox has high volume, good for buying a large amount of bitcoin without moving the price too much. MtGox is bot friedly, and bot trading is profitable, so the bot traders stay. But every day, they're a little more antsy. The last Gox trader I talked said he watches Gox ask volume, and as long as it's over 30k he feels secure. It's well over 30k now. But change happens fast.
To understand the USD withdrawal problems, try to think like an AML/KYC (anti money-laundering/know-your customers rules) enforcer. A regulator's job, day to day, consists of attempting to open accounts under fake names or using fake documents, and then freezing accounts where that money resides, levying fines, and generally raining down bureaucratic hell on the offender.
MtGox doesn't hold customer fiat funds. Banks do.
MtGox doesn't have one bank account from customer. They pool funds from hundreds or thousands of accounts.
It's unknown how may total US bank accounts are held but MtGox, but my guess is not that many. Maybe tens. So every account freeze really hurts.
Unfreezing isn't easy, because it requires justifying all the cash inflows since the beginning of time, including when MtGox was being run with High School level IT as a trading card site for Magic nerds.
It doesn't take much to screw up accounting, and lose track of what funds came from where. When business is booming and you are on a roll, screw ups can be papered up by just sacrificing some profits. But that doesn't wash with hostile regulators, whose primary concern isn't how much funds are present but how and for whom the funds are accounted for. As little inconsistencies leak up, unfrozen accounts may be refrozen if the banking cops aren't satisfied.
My read on the situation is that USD withdrawal may never be a smooth and easy on MtGox, due to MtGox having fumbled the AML/KYC identity verification conditions in the early days. MtGox just don't have good relationship with any US bank, and while investigations proceed, they are unlikely to achieve one. And the investigations could continue forever for all intents and purposes, due to accounting irregularities early on.
So, the key question is does MtGox have enough bitcoin to support an orderly wind down with customers taking funds out in BTC, going forward.
Slow as molasses USD withdrawal isn't really a problem, as long as users can withdraw promptly via bitcoin, even if it is expensive bitcoin.
But how secure is the MtGox bitcoin position?
Absent audits from a creditable accounting company, there's no way to know for sure. There's a good write-up at
https://pay.reddit.com/Bitcoin/comments/1lc3is/pulled_article_from_tgb_5m_seizures_provide/
that covers the basics of what is known. The good news is that MtGox made huge bitcoin profits over its lifetime, which are more than enough to cover the holes in operating capital due to seized accounts and the lawsuit filed by Coinlab. The bad news is that no one knows if MtGox kept the bitcoin, or traded it for fiat. A worst case scenario has the MtGox operations team panicking when the bitcoin price was low (like 60-80) and cashing out to USD to cover the lawsuit+seizure shortfalls. Now the price is high again, but how much bitcoin do they actually have? As long as miners keep sending bitcoin to MtGox, and the bot traders are waving their magic wands, bitcoin withdrawals are probably safe for the time being, even if the bitcoin position is net short. But bank runs can come out of nowhere, or even be engineered by hostile players who want to drive the bitcoin price up and then down, by provoking a panic. We saw it in April, and we could see it again.
Who will buy MtGox?
Someone, I hope.
I think, for the right price, a deal could be made, and this would be very positive news for the bitcoin economy, .
Whoever buys MtGox would be buying a headache. They would have to deal with the mess of unknown and unverified account holders from back in the day. They might never get some USD accounts unfrozen, or at least have to wait a long time. There would be fines. And of course there is the matter of the Coinlab lawsuit.
But, it's a potentially very profitable headache. MtGox has enormous brand recognition and revenues to go with it, both bitcoin and fiat. And I think the right kind of buyer would inherit enormous goodwill for fixing what a lot of players known in their gut to be a serious problem. I think the ideal buyer would be an American credit union with a strong balance sheet, good IT, good relationship with regulators, and obviously bullish on bitcoin. I could also see a russian or chinese buyer. For the right kind of money, regulators can be made to see reason, and lawsuits go away.
If no one buys MtGox, the next best thing would be to bring back credit default swaps, like we had for PirateAt40 debt in 2012. A CDS mediated bankruptcy would still be painful for bitcoin, but it would be a lot more orderly.
As a parting thought, I'd like to take a second to recall everything good MtGox has done for bitcoin. MtGox took a lot of risks, and tGox put bitcoin on the map.
Maybe the MtGox operations team is just out of their depth, though well intentioned. Maybe they just want a nice payout, and for the stress to be over.
I know I would.
submitted by standardcrypto to BitcoinMarkets [link] [comments]

January Cryptocurrency Market Crash - The Investigation Craig Wright HACKED MT GOX! Bitcoin LAST CHANCE! Stock Market TUMBLE! Crypto News Bitcoin Mt. Gox FLASH CRASH! Bitcoins at $0.01 Each Kraken’s CEO Jesse Powell on Boosting Bitcoin by Improving Exchanges (Ep. 0082) Craig Wright Claims To Own Stolen Mt Gox Bitcoin

The market depth is available in their API though and if you want something a bit more user friendly it is also available on Bitcoin Charts. share | improve this answer | follow | answered Aug 17 '12 at 10:03 Bitcoincharts provides real-time USD price data of the Mt. Gox exchange including charts, orderbook and more. Did the Mt. Gox hack teach us anything about cryptocurrency storage and safety? Some crypto investors who came to the bitcoin party in its early days will for a long time, be haunted by the ghost of the infamous Mt. Gox hack in which 850,000 bitcoins (just over 4 percent of the total BTC supply) in customer and company funds were stolen from the exchange. In spite of the June 2011 hack, by 2013 Mt. Gox had established itself as the largest bitcoin exchange in the world, in part as a result of increased interest in bitcoin as the price of the coins increased rapidly (jumping from $13 dollars in January 2013 to a peak of more than $1,200).. However, behind the scenes all was not well. In my experience requesting the full market depth from MtGox, often results in flat out incorrect information. To deal with this I've resorted to constructing my own, in a similar manner as you described above. What I do is, using the websocket api, I look at all incoming depth events. I then keep two ordered arrays of bids and asks.

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January Cryptocurrency Market Crash - The Investigation

craig wright now claims to own an address containing 79,000 stolen bitcoin from the mt gox hack event and asks blockstream to recover it for him. amazing. Social Media: Follow me on Dlive: https ... CRAIG WRIGHT CLAIMS HE HACKED MT GOX AND STOLE 80,000 BITCOIN! Bitcoin LAST CHANCE BULLRUN! The Stock MArket TUMBLES!! Crypto News! Time to buy Altcoins Like XRP and ETHereum! Crypto and Financial ... Remove all; Disconnect; The next video is starting Jesse started Kraken after the 2011 Mt. Gox hack. He felt that for Bitcoin to go mainstream, exchanges would have to professionalize. The conversation is split into 3 chapters: Cryptocurrency News - Mt. Gox Bitcoin Hack! Craig Wright has been in legal battles for a very long time now. Craig Wright also claims to be Satoshi and the creator of Bitcoin.