Mt. Gox Claims to Have 'Found' $116 Million

Mt. Gox Claims to Have 'Found' $116 Million

posted Sunday Mar 23, 2014 by Scott Ertz

Mt. Gox Claims to Have 'Found' $116 Million

Bitcoin is the story that won't die lately. Between the disaster that is Mt. Gox and Newsweek's editorial blunder, the tech industry seems to be unable to avoid Bitcoin this year. This week has not changed this fact, as Mt. Gox is back in the news following an incredibly weird revelation.

After their bankruptcy filing and subsequent class-action lawsuit, Mt. Gox claimed on Thursday evening that they had "found" 200,000 Bitcoin which had been stored in "old-format wallets." Based on the exchange rate at the time of the announcement, that equated to $116 million. That is a tremendous amount of money to have just totally lost track of, rather than having been heisted from inside or outside. Gil Luria of Wedbush Securities, a company with a precarious grip on gaming, but a pretty rational understanding of Bitcoin, said,

I think that it's yet another illustration of how incompetently managed that hobbyist operation was. That you can lose that much Bitcoin and then find it tells you that we're not talking about robust levels of security and control.

Where we are now is in this period of quiet transition before we see the emergence of actual exchanges. The hobbyist operations are behind us and the robust, enterprise-grade operations are ahead of us.

While I don't entirely agree that we are on the verge of professional exchanges, I do see the end of the hobbyist organizations coming quickly. The problem with enterprise operations coming into the Bitcoin world is the fact that the underlying technology behind Bitcoin is so unsound. This has never been better illustrated than the fact that there is such a thing as an old-format wallet, and that money can be lost within one, despite still controlling said wallet.

For as long as stories of Bitcoin exploits, heists and insecurities continue to be published, the currency will never have the perception of any sort of security. At least with standard currencies there is a perception of security, despite the fact that physical dollars can be stolen from a physical bank just like Mt. Gox seems to have experienced.

For as long as Bitcoin is perceived to be an insecure currency that is used mainly for illegal or illicit activity, I don't see any major financial institution attaching their name to it. Banks like Bank of America have enough trouble controlling their brand image through actions that they control, let alone having their brand affected by outside activities of an outside organization.

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