[celticninja]

>...and eventually gave me my money back. How many Mt. Gox users got their money back?

these are not the same situation and I think it is disingenous to act like it is.

A comparable situation is that when you had your card skimmed and locked up you had to go say 3 days without access to your funds until a new card turned up, and again lets be charitable and say your bank refunded you within 2 weeks. so you were inconvenienced for 3 days and out of pocket for 14 days. if you paid with bitcoin you would not be locked out of your wallet or at risk of further loss, or need to call your bank. now when you scale that up to something like the recent hack at target that resulted in 1000's of stolen CC details along with personal info resulting in a lot of potential for identity theft and CC fraud. If those buyer had all paid in BTC there would be no theft or fraud possible, no need to try and attack the organisation as list of BTC addresses and customer names and addresses are of no use. they may seek to steal the companies bitcoins but securing properly one small area of your network is much easier than securing a huge sprawling network that covers a whole host of functions, where sensitive data is liberally spread around, making for a lot of vectors of attack.

Now Mt Gox is comparable to the Bernie Madoff Ponzi scheme, do you know how many of those investors got their money back?

[bduerst]

Both involve theft, except one is insured. You don't insure money that you give to an investor (Madoff), which is why it's disingenuous to compare Mt. Gox to an investment scam.

[celticninja]

why is it disingenous to compare mtgox to madoff? both were run as ponzi schemes in the end which led to losses for investors,whether that was investing in bitcoin or madoffs funds.mtgox money was not insured either.

[bduerst]

Mt. Gox was not a ponzi scheme. It was a legitimate exchange business that became insolvent, and it was the users (not just investors) who got screwed.

Also, the term ponzi scheme get's used a lot in discussion about bitcoin, but many people do not know that it is a very specific type of scam. There have even been actual ponzi schemes involving bitcoins (not Mt. Gox). The people scammed in those were not insured because it was an investment, just as the people involved in the Maddoff scam were not insured. That is why it's disingenuous.

[venaoy_]

It was not a ponzi, but MtGox became insolvent through fraud: Mark Karpeles simulated fake transactions with fake coins and fake dollars using his willy bot.

[bduerst]

Just how many HN accounts do you have? And why?

Insolvency wasn't the question.

[venaoy_]

Just one, plus this temporary account. I am not at home and I don't have access to my password safe containing my HN password.

[nickodell]

If we're talking about MtGox's decision to keep operating after they'd become insolvent, then it's not disingenuous to compare it to Madoff.

However, comparing them as a whole is disingenuous. MtGox had a legitimate business plan, but screwed up by letting their Bitcoins get stolen. Madoff planned to defraud his investors from the start.

[lmm]

A ponzi scheme actually pays out some interest, at least initially. The only reason that kind of fraud is possible is that investments generally make money. An exchange like mtgox never does that. If you're doing the thing you did at mtgox - just storing your money, not trying to make money through investing - then you put your money in an FDIC-protected account and you're immune to madoff-like frauds.