jl2012
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February 27, 2014, 07:06:47 PM

It's becoming more and more clear that the coins haven't been stolen, they've just lost the keys lol. Once this is confirmed, should be very bullish.

I don't think that the loss of those coins, per se, would have any effect.  

Think of the exchanges as water tanks where water represents bitcoins in the market, and the water level is the inverse price (how many BTC one can buy with one dollar).

The tanks are connected by pipes at the bottom (coin withdrawals and deposits) so the hydrostatic principle (arbitrage) keeps the water level about the same in all tanks. If one pours more water into any tank (brings more coins to the market) the level in all tanks goes up (meaning the price goes down).  The opposite happens if one takes water out of one tank (buys coins and puts them in cold storage).

If the MtGOX theft did happen, then at some point in the past, someone siphoned most of the water out of the MtGOX tank to a private barrel.  I the keys were lost, most of the water in that tank leaked out and was permanetly lost.  In either case, Mark put some bricks into the tank (hid the theft) so that people would not notice the loss, and the water level was not affected.   Then a few days ago the pipes out of that tank  were closed (withdrawals were blocked),  and the tank was disconnected and removed it from the system.   That would not affect the water level in the other tanks either.

If the theft happened, and the thief then dumped the water in other tanks (sold the coins in other markets), then there was indeed a net rise in the water level (a fall in market price); but that is past history.  

We may expect an effect only if the coins were stolen but have not been not sold yet EDIT: and are sold now.

(This analogy is imperfect because it does not model the money flows, but hopefully it is enough to argue the point.)

I am talking about a case in which the private keys have been lost, in which case 750k BTC has been taken out of the total money supply. If they have been stolen (but the keys are still known) it shouldn't have much of an affect.

If the keys are lost, it brings up an argument to fork the block chain, and change the code to manually recover the money. To a new address. A lot of people would support it. (and many would be against)... talk about polarising the Bitcoin community.


It won't work. Without the private key, how Mark could prove those are really gox's coins?