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Mt.Gox Is Dead, Long Live Bitcoin!

Analysis of the Rise and Fall of a Leading Virtual Currency Exchange Platform

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Empowering Organizations

Part of the book series: Lecture Notes in Information Systems and Organisation ((LNISO,volume 11))

Abstract

In the last decade the intensity and frequency of business and social interactions mediated by digital channels have dramatically increased. Participating in virtual communities, communicating via internet, buying product and services through the web is part of our daily behavior. It is not a surprise the tremendous expansion that virtual currencies are experiencing. Virtual currency exchange platforms (VCEP), specialized in trading virtual currency are becoming increasingly popular. The combination of these two concepts calls for a deeper understanding of their value and models both from an organizational and an information system perspective. We investigate Mt.Gox, one of the most popular VCEP, trading till 70 % of Bitcoin transactions in 2013, and suddenly collapsing as consequence of managerial choices and cyber-attacks. We explore this case study in order to understand the value and the risks associated to the system and the consequences of the breakdown of one of the most important player.

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Notes

  1. 1.

    World Bank data retrieved in 2014 at http://data.worldbank.org/indicator/IT.NET.USER.P2.

  2. 2.

    See Table 4 for a more detailed VCEP-dataset.

  3. 3.

    Source: http://www.coindesk.com/ and http://bitcoincharts.com.

  4. 4.

    As also recognized by ECB (2012, p. 22): “Mt.Gox is the most widely used currency exchange platform and allows users to trade US dollars for Bitcoins and vice versa.”

  5. 5.

    The launch in the market was announced through a forum focused on bitcoin: https://bitcointalk.org/index.php?topic=444.msg3866#msg3866 [Retrieved 16 July 2014].

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Correspondence to Francesco Bolici .

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Bolici, F., Rosa, S.D. (2016). Mt.Gox Is Dead, Long Live Bitcoin!. In: Torre, T., Braccini, A., Spinelli, R. (eds) Empowering Organizations. Lecture Notes in Information Systems and Organisation, vol 11. Springer, Cham. https://doi.org/10.1007/978-3-319-23784-8_22

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