The Inside Story of Mt. Gox, Bitcoin’s $460 Million Disaster
Mt. Gox was at one time the biggest Bitcoin exchange in the world. Toward the end of 2013, it began to founder. And in late February, it closed its website and filed for bankruptcy protection under Japanese law.
According to this report in Wired, the collapse came as no surprise to insiders and observers. It was not being run as a financial services firm handling hundreds of millions of dollars should be. The computer code was lacking, the leadership was lackadaisical and its accounting practices were doubtful.
Mt. Gox, he says, didn’t use any type of version control software — a standard tool in any professional software development environment. This meant that any coder could accidentally overwrite a colleague’s code if they happened to be working on the same file. According to this developer, the world’s largest bitcoin exchange had only recently introduced a test environment, meaning that, previously, untested software changes were pushed out to the exchanges customers — not the kind of thing you’d see on a professionally run financial services website. And, he says, there was only one person who could approve changes to the site’s source code: Mark Karpeles [CEO of Mt. Gox]. That meant that some bug fixes — even security fixes — could languish for weeks, waiting for Karpeles to get to the code. “The source code was a complete mess,” says one insider.
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