The bitcointalk forums and /r/bitcoin are full of paranoia like this. After months of stress trying to divine market patterns, people see market manipulation and conspiracies everywhere.

The simple truth is that there was an agressive bubble. The doubling period for the price was halving with each iteration[1]. If you looked at the log plot[2], it still looked exponential! A crash was inevitable.

> On another note, mtgox.com the main exchange is shockingly unfit for purpose.

They have a big update scheduled for April 17th[3].

[1] https://bitcointalk.org/index.php?topic=171312.0;all

[2] http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g...

[3] https://mtgox.com/press_release_20130409.html

MtGox has said they were subject to DDoS attacks: https://twitter.com/MagicalTux/status/317423311174909954

> If you looked at the log plot[2], it still looked exponential!

Trying to divine future price movement from looking at a graph has been proven definitively, repeatedly to be foolish.

Keynes may have been mistaken on a lot of things but he got one thing right: "The market can stay irrational longer than you can stay solvent."

My specific prediction less than a day before this crash was "At this rate, the crash is a single-digit number of days away".

The market can NOT stay irrational for long when an asset's price doubles every few days.

https://news.ycombinator.com/item?id=5517460

The efficient-market hypothesis does not have an asterisk excluding cryptocurrencies.

Truly, the capacity for people to employ cognitive bias is staggering.

I think you'll find that I'm empirically right.

This is what people mean when they say "efficient market" in this context:

> In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient". In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.

http://en.wikipedia.org/wiki/Efficient-market_hypothesis

There are variations of this hypothesis, so saying "it's dead" is meaningless unless you specify which one is "dead" and how it has failed.

Also: Empirical analyses have consistently found problems with the efficient-market hypothesis, the most consistent being that stocks with low price to earnings (and similarly, low price to cash-flow or book value) outperform other stocks. Which is presumably due to cognitive bias. http://en.wikipedia.org/wiki/Efficient-market_hypothesis

PS: It's a reasonable simplification that's useful for the average investor, but not policy makers for example.

Are they running on 1 server?

Of course this is bad design, but you have to remember that this website started out as Magic the Gathering Online eXchange. It was built to trade playing cards, not to serve as a multi-million dollar currency exchange. The trading engine was retrofitted for bitcoin, and was stuck with several bad design decisions as a result. While I agree this should have been fixed long ago, MtGox has had its hands full recently. The massive growth in its userbase, the ever-growing verification queue, and the fact that it is expected to be online 24/7 have made things difficult.

However, I suspect the main cause of today's massive has to do with this: https://mtgox.com/press_release_20130409.html

It will interesting to see what effect this policy change will have.

[1] https://www.facebook.com/MtGox/posts/455962117821534

[2] https://www.facebook.com/MtGox/posts/453409538076792

[3] https://twitter.com/MagicalTux/status/320043013420249088

http://www.facebook.com/MtGox/posts/453409538076792

"There are a few things that we can implement to help fight the attacks, such as disconnecting the trade engine backend from the Internet. By separating the data center from the Mt.Gox website, we will continue to be able to trade"

I agree there are plenty of people in bitcoin ready to be 'the greater fool' [1] but that's only if it fails... they will be self assured visionaries otherwise...

[1] http://www.amazon.co.uk/Devil-Take-Hindmost-Financial-Specul...

'The HN forums is full of smug dismissiveness like this'

It's a blip on the radar in the grand scheme of things, and tons of sites were DDOS'd and simultaneously going slow or down (bitcointalk, mtgox, bitcoincharts, bitstamp). The evidence is my own eyes and refreshing browser timeouts. Everything back to normal now.

Highly unlikely that all those sites would be bought down by "panicked" users alone.

Given profiteering DDOS attacks against casino operators are commonplace, I find it a stretch to think these attacks are not happening regularly against bitcoin sites.

Anyhow, there's a correction every once in a while. It then goes higher than before, I'm still not convinced it is a bubble afterall.

Likewise, Mt. Gox made mention of "Being DDOS'd" at certain points, but I'm a little skeptical of the claim given that their own charts show a huge jump in trade volume at around the same time.

So no, there's no real "proof" yet of it being a DDOS or just lots of panicked traders, just lots of speculation (heh, heh).

You can keep drinking the "everything's fine" koolaid, or get with the reality that currency manipulators have arrived on the Bitcoin train, and are using all the tools they have available to do their job.

https://bitcointalk.org/index.php?topic=15929.msg1793833#msg...

Also, just because MtGox had a DDoS in the past, doesn't mean they are having one now. I know first hand as someone who runs a service that has been DDoSed in the past that the moment you have server issues, all the users scream "They are being DDoSed!".

My experience here is just as irrelevant as is your own.

That being said, I'm not sure why you think they wouldn't be subject -- along with every piece of infrastructure in the bitcoin food chain -- to very large DDoS attacks. The currency manipulators are here to stay. To think otherwise is foolish and misguided, or hopeful beyond reason.

If the price starts going down, everyone will rush to their favorite bitcoin related site to see what is going on, even if they are not planning on panic selling. Would you say you have checked bitcoin related sites 5 times more than usual today? 10 times?

If the regular users of a site all decide to use it five to ten times more than usual, it is very likely to cause some slowdown.

On the other hand, if a single bitcoin related site was experiencing problems, that is when I suspect a targeted attack.

Lastly, the only thing that mtgox announcing that they have been DDoSed in the past tells us is that they are willing to announce the fact that they are being DDoSed. This would seem to make it less likely that they are being DDoSed in the absence of such an announcement.

The instant-casino-trading side of things came much later along the road. It's not crucial to capitalism to the level people might think it is.

The arch-capitalist Warren Buffet regularly says he'd be happy for markets to close for a year. Though that refers to equities and not forex, which obviously does need to stay open to allow trade to happen.

Though, to be fair, I don't have an answer myself. Many things have changed, many haven't; it depends which bits you care about how much...

you never step in the same steaming turd twice, you're not the same person and it's not the same steaming turd - RockyMcNuts

The Facebook IPO was pretty damn similar and didn't end capitalism as we know it :)

That's (probably unintentionally) sad commentary on the state of our world today. After all, this trading is just finance. Truly forging the materials or implementing the algorithms that improve our standards of living happens in on a completely timescale, where a one hour delay of some financing operation (such as getting a loan approved) makes no difference at all.

I don't think it inherently implies anything of the sort. There is nothing to suggest that they believe in Bitcoin or care about it. If your suggestions are true, the only thing we know is that they are playing a very, very easy game of manipulation for financial gain. I don't see that as a positive for Bitcoin and think you're reaching with that statement.

https://mtgox.com/press_release_20130404.html

Just try loading mtgox.com -- it's slow. Try using it to trade. Even slower. Service is being denied. Confidence undermined. I would not take this as a vote that once the server issues are resolved, the price will continue to soar, but if I said that, it's possible that later I would be able to "told you so".

>I hope a more able exchange arrives soon.

I hope for both of those things!

what's the difference between a "selling attack" and just "selling"?

It would be possible to create a GLD-style ETF around Bitcoin and it would be as an accurate reflection of the real price as possible. But why bother?

http://bitcoincharts.com/markets/ will show prices in the major exchanges, if it's online. I had to use the Google cache.