Here's an interesting quote on the Mt. Gox failure that seems a lot like this current one:
Quote:
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We’ve seen this before in cryptocurrencies many, many times. Take Mt. Gox. Karpelès bought an exchange which was insolvent the day he bought it, due to a prior hack. To paper over the insolvency, he bought bitcoin with imaginary money while paying out very real money to sellers. This buying pressure increased the price of bitcoin, which deepened the dollar-denominated hole the fraud was in. The increased price of bitcoin both brought new dollars to the market and necessitated that he buy bitcoin faster to stay in place. This distracted him from key other responsibilities of running a fraudulent Bitcoin exchange, like counting your bitcoin periodically to ensure they aren’t going to the hackers who already hacked you insolvent. (Again, see the Wizsec presentation.)
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It's kind of interesting. I'm a computer guy. I started programming when I was 12 and had published video games when I was 15. My portfolio of software is what got me into MIT. From there I started Pelican and wrote all the code that ran our systems and turned it into a very successful company (sold it three years ago to Private Equity). I'm in the 99.99% of qualified people to learn and understand these cryptocurrencies. People often ask me my opinions because I'm the "computer whiz" they know. My point? This stuff is so confusing and convoluted that I think one in ten thousand people actually know what's going on. Maybe less. And that would probably include at least 99% of people who are "investors" (gamblers) in this stuff.
Dunno - it's difficult to get a clear read on the hyperbole versus the real nuts and bolts.
-Wayne