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Mt.Gox needs to calm everyone down by signing a message from an address (or multiple addresses) that contain enough bitcoins to prove that they can handle the withdrawals.

If they do not do this, we must assume that they are insolvent and have lost their customers' coins.




I've heard MtGox apologists claim that it's impossible because MtGox is incompetent. Which is not a good apology.


How would we know that they haven't just paid someone (with a lot of bitcoins) $20k to sign that message?


We don't, we just have to guess at the likelihood of that kind of thing actually happening for $40+ million in bitcoins.

Also, it's less likely to be a lie if they do it sooner rather than later.


Why would that anyone holding a lot of coins need some incomparably small sum from MtGox while he can clearly make more selling it before the meltdown on other exchanges?


By propping up MtGox he'd be keeping the value of his Bitcoins up. If MtGox fails, there'll be a huge dip in the price of BTC across all the exchanges.


He can also be the first to sell on another exchange and buy at the bottom. More profit, less risk.


You don't. But it's better then nothing at least as a PR. On the other hand, I know of no bank that could get it's head straight around a bank-run.


I would agree with you, in the context of the fractional reserve system.

But in the case of a cryptocurrency exchange the credits and debits should be more or less equal, minus the trading fees. At least, that's how places like Mt. Gox promote themselves.

It may take longer to get your funds, if there is a "run" on the exchange, because of the flood of transactions into the system and the need to reconcile everything, but that would likely be measured in a few hours extra, not days/weeks.




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