Leading Bitcoin exchange overwhelmed by unprecedented influx of new accounts

Bitcoin logoMtGox, the leading Bitcoin exchange, has been overwhelmed by a large volume of new account requests recently which must go through a process of identity verification (in order for the account to trade higher volumes), leading to unprecedented delays. According to an MtGox spokesperson, there were “around 1000 new requests on Friday” [March 22, 2013] alone. A senior member of bitcointalk.org, who has apparently applied to have his MtGox account verified, stated “There are 4000+ accounts in front of me waiting to be verified…”.

After an account is finally verified it then can take a day, or several days depending on how funds are transferred, to have funds arrive in your exchange account as bank wires, direct deposits or online banking bill payments are the usual ways of doing so (credit cards are not generally accepted or costly fees apply if so). With thousands of new accounts in the queue, at just one exchange that we know of, this suggests that a significant amount of fiat currency will flow into Bitcoin in the coming weeks. With a market capitalization of only around $700M USD it does not take much to move Bitcoin prices significantly.

At the time of this writing Bitcoin are trading at around $68 USD up from $28 thirty days ago.

UPDATE 1:45PM ET: User @bitcoinpumper points out this Reddit post stating that there are 5,500 MtGox accounts pending verification.

34 comments on “Leading Bitcoin exchange overwhelmed by unprecedented influx of new accounts
  1. Mr. Bitcoin says:

    There are already plenty of alternative locations where people can buy bitcoins now. But most people don’t know about them. So the average idiot will just wait for Mt. Gox to clear through this absurd backlog. Meanwhile, the price of bitcoin is going to continue to rise.

    I’ve been buying bitcoins every day for months now along with gold and silver. I don’t know why more Keiser report people haven’t done the same. I mean seriously, why the heck do you watch this show if you don’t listen to what Max has to say? Do you think you’re smarter than he is?

    Bitcoin has value on so many levels now as the guy said in the last episode, valuing it exactly is close to impossible. Yet tens of billions seems like a fair starting point for a global effective payment system, irrespective of fear trade/ fiat inflation.

    I’m seeing bitcoin in places I would not expect it to. Here is an article from a Canadian stock sourced website that is mostly focused on junior mining stocks in Canada talking about bitcoin as liquid gold. Aka, the gold bugs are starting to come around.

    http://www.stockhouse.com/best-of-boards-blogs/march/22/bitcoin-like-gold-on-steroids-

  2. Sirial says:

    Why I do not buy anything ? Because I can not. I do not have the money. All I can do is sit and see the tsunami coming closer. Max and Stacey are just a nice light in the dark entertaining me to the end of it all.

  3. bitcoinpumper says:

    Post on Reddit states 5500 backlog. Take it for what it’s worth but I don’t doubt it

  4. John Irving says:

    @bitcoinpumper Can you provide a link to that thread? Thanks…

  5. Goldman Sucks says:

    @Mr. Bitcoin
    Can you provide links to the alternatives to MT Gox please?

  6. John Irving says:

    Thanks! Will update post shortly.

  7. Rioting like a Chimp says:

    Yeah, I’m coming around to Bitcoin but I can see governments hating this because of tax avoidance. They will try to control it or get rid of it.

    Also, the open source code is leading to “cloned” Bitcoins. This is a concern to me has I have had enough of money creation.

    Bitcoin is good as currency as well as holding gold & silver imo.

    I would like Max to talk about Bitcoin more and advise his listeners the best way to get into it and how the manipulation of gold market will likely to end.

  8. Mr. Bitcoin says:

    A new service Coinlab is also apparently slated to come online soon. I read about them on bitcointalk. They seem pretty legit but we’ll have to see I think they delayed opening to the public a few weeks.

  9. John Irving says:

    Good advice @ Mr. Bitcoin.

  10. zebo says:

    @mr bitcoin
    I don’t think it is a good idea to do everything someone says.
    As Keiser is not the only show in the net and other shows say “don’t buy bitcoins” it is pretty normal that . people don’t buy something that is completely different and new.
    I’m pretty sure bitcoins will go up in the future,because the sheeple haven’t even started to buy,but they will as soon as the next cyprus and closed banks and irregular taxes appear.And when sheeple start to buy than the price goes high.
    I oppose bitcoins because most people in the world can’t use them as they don’t have the hardware to use them.You also need energy to make them exist and an
    EMP weapon can destroy them .
    The worst thing:
    The Bitcoin flashcrash:As the bitcoin crashed some month ago (i guess it was around 80% some people bought tons of them for little money)

    that’s the same story with the london stockmarket and the rothschild.
    After Napoleon lost the battle of waterloo an Rothschild Agent told the people in London the lie that Napoleon has won and now will conquer england.people started
    selling their stocks.
    The stockmarket crashed 80-90% and Rothschild bought most of these stocks for little money.

    there is an interessting video on youtube:bitcoin and Cia(watch it)

  11. benb says:

    Mr.bitcon, goldbugs coming around? Its and argument for bitcoin, I read it until the writter made it aparent he didnt understand what gold is.
    I have researched lists that people from this site have provided me, businesses accepting bitcoin, nope, when I call them they dont know what bitcoin is, 1 guy did know what it was as he knew of it years ago, you figure out who, he is on the lists.
    he doesnt know how he got on the list and is going to check with his lawyer about it. Anyway, as I have said maybe you enthusiasts are in early and there is a use for bitcoin, maybe it is a good way to transfer currency, but so far its uses for aquireing anything are extemly limited at best. altho there is an exchange to get american dollars for it. But saying the “goldbugs” are coming around because a guy puts an argument for bitcoin on stockhouse is a bit misleading to say the least, which to be honust I am finding alot of misleading statements about bitcoin from people. Do your due diligence people before you invest in anything. Again, maybe I am wrong and you guys are in so early you will all become multi bazillionaires. glta

  12. marc mcreiser. says:

    As long as the Pentagon doesn’t hamstring the internet, then BitCoin should do well. BTW, I thought the £ was going down to $1.25. It’s gone up of late and is around $1.52.

  13. Bev says:

    @ Sirial

    and most of the people of the world would do much better with the jobs created if government instead of banks created money to spend into society to solve many problems and update infrastructure, energy, education, health.

    http://www.monetary.org/

    http://www.monetary.org/the-need-for-monetary-reform/2009/09

    The Need For Monetary Reform
    On September 30, 2009, in Research & Articles, by AMI

    Monetary reform is the critical missing element needed to move humanity back from the brink of economic destruction and nuclear disaster, away from a future dominated by fraud, ugliness and warfare, toward a world of justice and beauty.

    The power to create money is an awesome power – at times stronger than the Executive, Legislative and Judicial powers combined. It’s like having a “magic checkbook,” where checks can’t bounce. When controlled privately it can be used to gain riches, but much more importantly it determines the direction of our society by deciding where the money goes – what gets funded and what does not. Will it be used to build and repair vital infrastructure such as the New Orleans levees and Minneapolis bridges to protect major cities? Or will it go into warfare and real estate loans creating the real estate bubble – leading to a crash and depression.

    Thus the money issuing power should never be alienated from democratically elected government and placed ambiguously into private hands as it is in America in the Federal Reserve System today. Indeed, most people would be surprised to learn that the bulk of our money supply is not created by our government, but by private banks when they make loans. Through the Fed’s fractional reserve process the system creates “money” when banks make loans into accounts; so most of our money is issued as interest-bearing debt (see page 14 below).

    Under the Constitution, Article I, Sec. 8, our government has the sovereign power to issue money and spend it into circulation to promote the general welfare, for example, through the creation and repair of infrastructure, including human infrastructure – health and education – rather than misusing the money system for speculation as banking has historically done; periodically causing one crisis after another. Our lawmakers must now reclaim that power!

    Money has value because of skilled people, resources, and infrastructure, working together in a supportive social and legal framework. Money is the indispensable lubricant that lets them “run.” It is not tangible wealth in itself, but a power to obtain wealth. Money is an abstract social power based in law; and whatever government accepts in payment of taxes will be money. Money’s value is not created by the private corporations that now control it. As Aristotle wrote: “Money exists not by nature but by law.”

    Unhappily, mankind’s experience with private money creation has undeniably been a long history of fraud, mismanagement and even villainy, and the present crisis could become the worst yet! Banking abuses are pervasive and self-evident. Major banks and companies focus on abusing the money system instead of production. Billions have been stolen, trillions more are being shamelessly grabbed in so called bailouts! Much of our leadership is acting like patsies, instead of protecting our people as the financiers rape America.

    Private money creation through “fractional reserve” banking fosters an unprecedented concentration of wealth which destroys the democratic process and ultimately promotes military imperialism. Less than 1% of the population now claims ownership of almost 50% of the wealth, but vital infrastructure is ignored. The American Society of Civil Engineers gives a D grade to our infrastructure and says it will soon be a D-; and estimates that $2.2 trillion is needed to bring it to safe levels over the next 5 years!

    That fact alone shows the world’s dominant money system to be a major failure crying for reform.

    Infrastructure repair would provide quality employment throughout the nation. There is a pretense that government must either borrow or tax to get the money for such projects. But it is well enough known that the government can directly create the money needed and spend it into circulation for such projects, without inflationary results. A reformed monetary/banking system can make this happen NOW!

    Monetary reform is achieved with three elements which must be enacted together for it to work. Any one or any two of them alone won’t do it, but would further harm the reform process. The reform has its best chance of passage in this severe monetary crisis created by the privatized money system. Considering that the same establishment controls our weapons systems, this may be humanities only chance for reform, to stop the now obvious slide of our middle class into slavery or some form of “Disney Fascism.”

    First, incorporate the Federal Reserve System into the U.S. Treasury where all new money would be created by government as money, not interest-bearing debt; and be spent into circulation to promote the general welfare. The monetary system would be monitored to be neither inflationary nor deflationary.

    Second, halt the bank’s privilege to create money by ending the fractional reserve system in a gentle and elegant way. All the past monetized private credit would be converted into U.S. government money. Banks would then act as intermediaries accepting savings deposits and loaning them out to borrowers. They would do what people think they do now. This Act nationalizes the money system, not the banking system. Banking is not a proper function of government, but providing the nation’s money supply is a government prerogative!

    Third, spend new money into circulation on 21st century eco-friendly infrastructure and energy sources, including the education and healthcare needed for a growing and improving society, starting with the $2.2 trillion that the Civil Engineers estimate is needed for infrastructure repair; creating good jobs across our nation, re-invigorating local economies and re-funding local government at all levels.

    The false specter of inflation is usually raised against such suggestions that our government fulfill its responsibility to furnish the nation’s money supply. But that is a knee-jerk reaction – the result of decades, even centuries of propaganda against government.* When one actually examines the monetary record, it becomes clear that government has a far superior record in issuing and controlling money than the private issuers have had.* Inflation is avoided because real material wealth has been created in the process. Research and development of superior pollution-free technologies is facilitated.

    What we’re proposing builds upon the “Chicago Plan” which came out of University of Chicago economists in the 1930s and was widely supported nationwide by the economics profession back then. It was thought to be the next immediate step in the reforms coming out of the Great Depression. This was before that important university and most other university economics departments went over to the “dark side” with their free market worship. That’s a religion with no supporting evidence that ignores the facts which clearly disprove it.

    Lawmakers have often believed they could ignore the big questions on how our money system is structured. Right from the Constitutional Convention delegates ignored society’s monetary power and the excellent record of government issued money in building colonial infrastructure and giving us a nation.* They left the money power up for grabs, when properly estimating it would have meant placing it in a fourth monetary branch of government. “We marvel that they saw so much, but they saw not all things” wrote Civil War General and money reformer Benjamin Franklin Butler 80 years later.

    My Friends, our Great Task is to complete that part of government left inadequately defined by the founders; to more precisely define the money power in our society and bring it securely within the proven system of checks and balances they established. History shows that the money power will act like a fourth branch whether we recognize it as such or not. It’s not safe to leave so much power and privilege in private hands! It’s counter to our system of checks and balances. The developing crisis requires us to re-evaluate and focus on it now. We must not shrink from our responsibility to begin implementing the long known solutions to this problem. We start by placing the “money power” within our government where it obviously belongs. Or would you prefer to let “Enron” continue to control it, and us? And yes – Enron was on the Dallas Fed Board!

    As the late Congressman Wright Patman, Chairman of the House Committee on Banking and Currency for over 16 years, said, “I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money….I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue.”

    Friends, look around you. That time has certainly come! Awaken – get up and fight for your family and nation.

  14. Jayme says:

    Bitcoin Privacy Extension to Have Backdoor for Government Snooping?
    http://www.activistpost.com/2013/03/bitcoin-zerocoin-privacy-extension-to.html

  15. microhousehold says:

    Don’t think I wil trust or use CertLock.
    anyway it was an interesting read.
    SSL is defenitelly not secure.
    Most online banking relies on SSL.

    Certi ed Lies: Detecting and Defeating Government
    Interception Attacks Against SSL

    http://files.cloudprivacy.net/ssl-mitm.pdf

    Law Enforcement Appliance Subverts SSL

    http://www.wired.com/threatlevel/2010/03/packet-forensics/

  16. Carax says:

    i’m totally ignorant about bitcoin even though i’ve read all about it, nothing is sure so how can I be sure bitcoin is not a ponzi scheme or what if the internet kill switch is flipped? i keep 70 percent of my wealth in gold , silver , the rest goes to other physical things, goats, guns, ammo, canned goods, books

  17. microhousehold says:

    Typo: definitely

  18. John Irving says:

    @Jayme – From the article you shared:

    Quote: In an attempt to put the issue to rest, Green claimed that a backdoor was impossible, anyway; “If someone did try to build a back door for any reason, the open source Zerocoin would quickly become Zero-adoption.” End quote.

    @Carax From my perspective there are several barriers to Bitcoin entry presently. It’s not a “one click” sort of concept technically and transferring funds in and out of Bitcoins is a little complicated and time consuming (generally speaking). That being said, as the platform matures and is more broadly adopted, I can safely predict it will become much easier to use and understand them. Of course, by then, everyone will be in on it, presumably.

  19. Alex Delmar says:

    “It’s going to be harder to get dollars onto and off of mtgox soon anyway, so people might create more decentralized buying and selling networks. Or maybe people aren’t actually ready for a decentralized currency yet and will happily give their information to the US government via mtgox to continue to have their bitcoins shorted by Wall St. ”

    http://peculium.net/2013/03/10/consent-and-the-price-of-bitcoins-in-china/

  20. Curious says:

    Yeah, the idea that the price for bitcoins is pretty much set at Mt. Gox alone really does seem antithetical to the whole goal of decentralization. But how does a price get set if it’s not in some way coordinated to one ultimately recognized authority? So long as Mt. Gox is transparent in how they run things is that enough to make that okay? Even then though it seems that having the price set at a single exchange would make the price that much more easy to manipulate by those who would want to manipulate it for whatever reason.

    And whether it’s gold or silver or Litecoins or whatever, wouldn’t ANY decentralized/non-fiat currency suffer the same problem?

  21. Ade says:

    Bitcoin can’t be destroyed by an EMP, ok, maybe localised, just like you and your Gold and Silver would be vapourised during a similar local event, but it wouldn’t wipe out the entire world supply of Slver or Gold.
    Bitcoin was specifically designed to be decentralised, it absaolutely cannot be stopped, not even the developers can now stop bit coin (and they specifically designed it that way ) The only thing tat can stop Bitcoin is Global Thermonuclear War, a Big asteroid with our nae on it. Obama could shut down the US internet tomorrow and it would have Zero effect on BTC elsewhere. Close down the exchanges and people will do what they are doing now, and meet in the local bar, hand over the money and the seller will send your new bitcoins to your Iphone/Android wallet, online wallet or into a Brainwallet. If Govts decide to attack the miners to shut down further mining, which is currently a very expensive speciality, the Bitcoin network will sense the drop in production (It’s designed to release 25 new Bitcoins every 10 minutes ) and make production easier, meaning that you could mine them with your PC (currently you can but it’s not cost effective because Asics are thousands of times faster, so no one mines for BTC with their PC anymore, but that’s how BTC was originally mined, then Graphics cards were utilised, which were 100’s of times faster, now mining is carried out by Asics and FPGAs, thousands of times faster than a PC, if they went adter the Asic miners, the network would reduce difficulty, so it can stick to the 25 coins per ten minute schedule, until you could profitably mine them with GPU and PCs again, The network itself decides this, it was designed that way so no one can influence it, So, they can shut down the exchanges and go after those currently mining with expensive semiconductor asics, but all that weould happen is that it would trhen become profitable again for people to use their comparatively slow PCs to mine Bitcoins in their bedroom again, like they used to. Ben Bernanke et al have no idea what they are up against here, he’s out of his league, This is SkyNet, only it’s working FOR the people, AGAINST the Bankers.

  22. Ade says:

    The people who designed bitcoin, expected it to be attacked by Governments, they designed it like the internet was originally designed, to withstand attack. Sure, individuals can be arrested, maybe even whole countries can be shut down, but that will make no difference to the Bitcoin network, and very few coins will be lost, because you can import your wallet to iphone, or android, or print them out along with their private key, or transfer and store them in a Brainwallet. Barring a Global catastrophe, or perhaps a major screw up by the developers, it’s game over for the Bankers, we have them surrounded. I don’t advise putting all your eggs in one basket, go for Gold and Silver too, food, water purification etc. Circle the wagons and Diversify.

  23. Mr. Bitcoin says:

    “An interesting youtube video on bitcoin and the CIA.” I’m sorry. That is just too funny for words.

    Do you know that TOR was developed by the government? People don’t realize how powerless governments really are. It is hysterical.

  24. Mr. Bitcoin says:

    @ ade. You can talk about how impenetrable bitcoin is until you are blue in the face. Morons won’t realize the value until people are buying beers at the local bar with bitcoin on their Iphone.

  25. Curious says:

    I love the idea of Bitcoin, I love how technologically robust it is, and I dig the freedom-loving philosophy of those supporting it. For it to work as a widely used currency though people have to have confidence in its stability as a store of value, don’t they? How is that possible when value is set at one exchange and that one exchange can be overtaken by a select few bent on undermining it? And if confidence in Mt. Gox is ever shaken to the point where everyone rushes to another exchange, what’s to stop the same corrupting forces from simply following along to the next exchange too? Is it possible that the value of bitcoins can be set and stabilized in a way not involving exchanges?

  26. Mike Hunt III says:

    If/when Bitcoin becomes accepted at the local bar/restaurant/grocer/hardware store, bitcoin will be in the tens of thousands or hundreds of thousands of dollars per coin. I live in an area with a population of about 1.5 million. There is one person advertising Bitcoin for sale/trade on Craigslist. This thing has a long way to go!

  27. aleksy says:

    @Ade & @ Mr. Bitcoin——which of the BTC Wallets do you think is best for all around security and ease of use if that can be included but security first
    Same question for the exchangers?
    TIA

  28. aleksy says:

    @Jayme: thanx for the Actistpost.com website. don’t have time now but am going to read it first thing tomorrow.

  29. Nat says:

    @ Mr Bitcoin

    (in response to your original post)

    Firstly, until now or at least recently, Max and Stacy weren’t talking about Bitcoin as a way to increase your wealth nor a way to protect it – it’s only since it has started going up in value that Max has got all excited and started going on about it. Nothing like Gold and Silver which has been talked about for years, going up in value as a direct consequence of the corrupt economic system.

    All previous talk of Bitcoin was about subversion in the same breath as anti-copyright cartel, about growing an economy outside of the usual fiat Mafia – NOT about wealth protection or making profit. The suggestion by captions saying “Max got me into Bitocin at $8″ with the implication that it was being touted as a way to make money or protect wealth is to re-write history a little bit..

    To jump on someone’s, anyone’s, investment advice like just another blind follower of Jim Cramer but this time with Max Keiser is dangerous – you should make your own decisions. People who DONT blindly follow and think for themselves should be lauded..

    However, that’s not to say that moving some savings into Bitcoin to prevent it both being conviscated or loosing value, with the upside of it gaining value isn’t a very good idea – just that one should come to that conclusion one’s selves..

    Personally I don’t have those savings in cash to move. I can buy mis-priced things secondhand and make 40-50% by selling them on within a week. How much I do that is down to effort and spare cash and I’m not driven by money.

    Moving money to gold/silver/bitcoin, in the medium term at least, is for people with more savings than they know what to do with (and for some, lack of imagination might mean those savings aren’t that great!). Of course in the longer term you then need gold/silver/bitcoin for protection and it could be a gamble to hold out for now… who knows.

    What I don’t get is the shouting about how much it has increased in value when it’s not about the value, it’s about the protection it provides..

    Personally I’m a bit warey of Bitcoin because of the potential controlability by banks/hedgefunds in the longer term. Obviously they’d have to put a load of money in to it for the control which would shoot value through the roof. Once there though, they could create such insane volatility that it would be completely useless as either a store of value or as a currency – it would be impossible to make any meaningful transactions.

  30. Nat says:

    @Ade @Mr Bitcoin

    What would happen if JP Morgan et al decided to open loads of wallets, put a load of cash into the system and keep moving it in and out in big waves?

    How does the price follow positive and negative volume in and out of Bitcoin? Directly related?

    If that is the case, as I assume (hoping you’ll both say that’s not how it works), can’t they just create massive gains and then massive falls in bitcoin value?

    That would cause genuine users and savers to slowly pull their money out as it becomes just too volatile and scary to keep money in and impossible to use, to price up any services/real assets in bitcoin (as it is now currently difficult to price anything up – like trying to price something in a country experiencing extreme inflation, deflation in the bitcoin case).

    Last ones out would be the biggest loosers, like a Ponzi scheme, and Bitcoin would be broken, forever tainted.

  31. Tim says:

    I’m one of those waiting for MTGox.. there were 5480 ahead of me waiting for validation when I joined 2 days ago, I’m now in position 4920.

  32. Mystery says:

    It is just as possible that the large number of requests for verification could be a sign the market is about to collapse rather than boom.

    It is definatley possible that the large number of accounts trying to get verified are miners wanting tocash in on the recent run up in price.

    If I was sitting on 20,000 coins I mined over the past 4 years, I would be jumping at the chance to cash in and walk away with $1,400,000. Remeber a huge amount of bitcoins are controlled by the first 200 miners.

  33. Johnny Kabuki says:

    Got my account set up and all ready to go waited 1 week to get Dwolla set up and also Mt.Gox accounts verified. watched price go from around 69 all the way to around 95 and back down again to 77. (Someone was cashing in I presume) Glad I didn’t buy at 95 I almost used Bitinstant to do that as MtGox suggested it as an alternative. They charge about 4% and another 4% from your cash deposit center using some TrustE company which my bank at Chase had never heard of. I thought Bitcoin was a rebellious answer to my Chase account going to zero (internal computer glitch?) last week. And a safe haven from Cypress financial meltdown. However upon really thinking about this decentralized currency, I think it is a big joke. A kind of Hoax now perpetuated and propagandized by the financial institution controlled media who isn’t really giving accurate information about the problems with bitcoin (How can you call it decentralized when your options for buying and funding and trading through 1 small exchange like Mt.Gox or BTC-e). Bitcoins are for kids and greedy speculators. It will crack and I feel sorry for those who have played this game of old maid and are left holding the last cards. I am working on a new currency though called NIPCOINS. And it is invented by an actual Japanese guy not some guy running a Dice Game Racket. Please stay out of bit coin and if you get in. Get out with your profits now.

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