Is the Recent Theft at Mt Gox a Major Impact on the bitcoin Prices?

The day after the Mt. Gox bankruptcy, it was interesting to see how Mt. Gox prices were behaving. In fact, it took a bit of patience from me to follow what was going on. At first, I thought that this was just an April Fools’ Day joke, but it turned out that this was the start of a very long and complicated process. First, we had the hackers releasing the information. Then, we had the media outlets getting their news from the hackers.

Now, the hackers are threatening another attack on the Mt. Gox website. This time, they are threatening to do (kill) any MT. Gox employee who does anything that goes against their plan to alter the Mt. Gox protocol. In other words, if they are not happy with the way things are running at Mt. Gox, they have every right to take down the website until they are satisfied. So, you can imagine the reaction from the market when this news broke.

Mt. Gox claims that the hackers are trying to manipulate the bitcoin protocol in some fashion, and that they are using software to alter the transaction log on the Mt. Gox site in order to trick people into making transactions that will transfer them money illegally. At this point, someone or some group of people might be trying to manipulate the price of Mt. Gox by using this type of activity to shake the confidence in the system. This is unfortunate indeed, especially given the large amounts of money being moved in and out of the marketplace each day.

It’s important to realize that this is only one problem that is being faced by the decentralized nature of the bitcoin transactions. While there are many problems that can be attributed to the current state of affairs concerning the transparency of the transaction log, the truth is that the bitcoin protocol is completely trustworthy as long as everyone is operating under the same rules. You can use almost any currency and the protocol will work just fine. There are no special restrictions or even requirements for how you trade the currency.

Mt. Gox is one of the first cases of a problematic flaw with the bitcoin protocol, but this is by no means the only instance. Even though this is a flaw, it doesn’t really apply to the broader problem, which is the ability for any user to manipulate the supply of the currency. The real issue revolves around the fundamental problem of trust in the marketplace. People have begun to lose confidence in the ability of the exchange to behave rationally and the consequences of this mistrust could have a significant negative impact on the value of the currency.

There was a very public argument between Mark Zuckerberg and Tim Cook over whether or not the exchange had been taking advantage of the potential of the platform for helping investors. After the heated debate, Cook released his own statements in defense of the bitcoin. In July of 2012, the CEO of Facebook admitted that he was an investor in the project and that he had bought a significant number of the bitcoins at that time. It was widely reported at the time that the valuation of the bitcoins at that point was in excess of $ 53 million. This has since increased to a value of over $75 million.

As the bitcoin reached new highs in price, many people began speculating about whether it would be a successful medium of exchange in the future. Some analysts were predicting that the value of the currency would grow in the future. When the value of the virtual currency reached about $ 720 per bit by the end of October 2012, many traders became jubilant. It was a tremendous gain for the virtual currency and it was immediately sold as a result. However, this gain did not last long as the value of the virtual currency has since decreased.

As the months passed and the hype around the bitcoin continued to build up, new phenomena began to take place. Many rumors started to surface with regards to the possibility that the bitcoin was going to completely overtake the traditional currency as we know it. One of these rumors states that the bitcoin would reach one billion dollars in value by the end of February 2013. This would make the total value of all the bitcoins in circulation almost double what they are today. The fact that this happened is very unlikely and the chances of this happening are said to be extremely slim.