I have heard multiple explanations for the delays, and I think there are multiple issues at play.
Firstly it has been claimed that they have freshly mined coins stored undistinguished from others. If someone withdraws an amount that draws from an address with new coins, that withdrawal will be delayed.
I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours.
There are transactions not going though for longer periods, The transaction hash is being provided. I have seen claims suggesting that transactions are failing because of a subtle protocol incompatibility, which would explain the fairly random nature of the failed transactions.
Lots of people are saying MtGox is out of funds and the sky is falling. The biggest problem with those claims is that people have been predicting the imminent demise of MtGox for quite some time. MtGox may be failing, but everything that happens cannot be a sign of imminent collapse if it keeps on going.
I'm not sure if the claims of MtGox running a fractional reserve on the sly are very valid. I think it's more likely that they have technical issues, but the very nature of Bitcoin means that they could potentially lose all their bitcoin through technical issues alone. If you lose a private key or transfer bitcoin to an address with a lost key, those coins are effectively gone. If your software isn't behaving it's quite possible to make an automated money shredder.
It's fairly obvious that at this point they need to do some fairly significant steps to demonstrate that they are in control of enough bitcoin. If they want to restore confidence in their ability to pay out, they should use Bitcoin's ability to demonstrate ownership to do just that. Restoring confidence in their ability to operate is going to be a longer road.
> I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours.
Both p2pool and eligius.st allow coinbase payouts to any address, and for arbitrary amounts. It's entirely possible for a person to set their mining address to their deposit one, and suddenly Mt Gox has unspendable coinbase transactions in their wallet pool. People frequently assume as you did that no spends would occur of coinbase transactions, and suddenly end up with broken systems because of it.
Here's one from p2pool, paying to 402 outputs (truncated for brevity).
I think since they refuse to show evidence they have enough funds, it should be assumed it's a scam until proven otherwise. Really, they're making tons of money off fees, they are the most expensive exchange. Screwing customers like that is below acceptable. They're not just some paid app that can go down and customer won't be affected too much. It's money. Lot's of them. You can't refuse to pay and keep silence, otherwise you're a scammer.
It's a good rule of thumb to assume incompetence instead of malice. In the instance of MtGox it just doesn't make sense for it to be a scam.
They ran a business for a few years in obscurity then when they become a central figure in potentially a massive change in financial infrastructure they decide to run off with the silver? MtGox had the potential to be worth many billions if they were a significant service provider in a successful BitCoin scenario. They possibly still do to some extent if they can get their act together.
The assumption isn't that they ran off with the btc. It's that someone else did, now they are insolvent, and to prevent the fallout they are trying to live off the float and hide their insolvency until they have made themselves whole again.
I personally would never give them my business ever. Many people won't either. I'm sorry, they already screwed me once last year holding withdrawal for 2 days, now again. They are going down in history. The only question, again, if they will return the coins. I doubt they will. Even if we assume incompetence, it doesn't mean they suddenly can't SPEAK, right? Go and tell your customers what's going on. When people are not open about things, it most likely means they want to screw you and you are safe to assume this to be the default version.
Even in the absence of overt theft on their part, if the real explanation is not what they are offering, then it is still very likely a scam. That is, they are not disclosing information to customers that would be relevant to the customer's decision to use their service.
So, for instance, with the fiat withdrawal problem, if the actual issue is that they are not solvent, but are hiding this fact in order to become so through trading fees (a popular theory), then they are shifting an extraordinary amount of risk on to the customer without his/her consent. That would represent willful misleading for their own gain.
They laid off most of their staff, are being sued for $75million and have millions seized by the feds for running an unlicensed exchange, and coinlab still has $5million from the failed partnership. Scam is incoming, Gox should've sold itself to somebody competent over 2yrs ago
I had faith in MtGox before - their problems sounded like typical technical and banking system issues. After all, they use to have massive trading engine lag issues that they eventually resolved for the most part.
But it feels like they've been having withdrawl issues for like a year now, and since they haven't made any public statements about what's actually happening and what steps they are taking to rectify it, I've completely lost faith.
If MtGox needs frehsly mined coins to keep their exchange alive, they are probably dead. When and at which price did they spend their client's bitcoins so that now they have to rely on mining new ones?
A client sets his mining address directly to their MtGox deposit address. Different client tries to withdraw the funds. MtGox grabs a couple output it owns without regard to its age and tries to send it to the withdrawing client. The transaction is delayed because some of these outputs are fresh.
A freshly mined coin is not valid for 120 generations. That's to avoid transactions being voided if the very end of the blockchain switches (if the chain is A->B->C, and you spend coins mined in B in C, but then the chain is overtaken by A->D->E->F, your transaction is invalid (coins genrated in B won't appear in the new chain))
Firstly it has been claimed that they have freshly mined coins stored undistinguished from others. If someone withdraws an amount that draws from an address with new coins, that withdrawal will be delayed.
I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours.
There are transactions not going though for longer periods, The transaction hash is being provided. I have seen claims suggesting that transactions are failing because of a subtle protocol incompatibility, which would explain the fairly random nature of the failed transactions.
Lots of people are saying MtGox is out of funds and the sky is falling. The biggest problem with those claims is that people have been predicting the imminent demise of MtGox for quite some time. MtGox may be failing, but everything that happens cannot be a sign of imminent collapse if it keeps on going.
I'm not sure if the claims of MtGox running a fractional reserve on the sly are very valid. I think it's more likely that they have technical issues, but the very nature of Bitcoin means that they could potentially lose all their bitcoin through technical issues alone. If you lose a private key or transfer bitcoin to an address with a lost key, those coins are effectively gone. If your software isn't behaving it's quite possible to make an automated money shredder.
It's fairly obvious that at this point they need to do some fairly significant steps to demonstrate that they are in control of enough bitcoin. If they want to restore confidence in their ability to pay out, they should use Bitcoin's ability to demonstrate ownership to do just that. Restoring confidence in their ability to operate is going to be a longer road.