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Mt. Gox obviously allows you to send bitcoins to it, and to receive them to an address of your choice; hence I'm wondering if there is any reason not to use it as an e-wallet.

Unless I'm mistaken, it's much bigger (by far) than any other bitcoin exchange, bank or proper e-wallet, so we can reasonably expect it being more secure, supported and safe.

Why should I use a specialised e-wallet instead?

  • Has anyone ever had a MtGox trade initiated (a BUY) that they know they did not initiate? I had this happen to me and I'm thoroughly confused. I've contacted them and they just responded that I must have I must have initiated the trade. I'm still waiting to hear back from them again. – user4734 Apr 30 '13 at 3:51
  • You won't hear back from them again. – m33lky Feb 28 '14 at 18:14
  • 1
    @m33lky given that his comment is from 10 months ago and his account has been deleted... – o0'. Feb 28 '14 at 18:15
  • This question could be generalized to cover most exchanges, as the problem is a general one and not specific to Mt.Gox. – Murch May 8 '15 at 9:15
  • @Murch back then, Mt. Gox was very big, while now nobody has a near-monopoly, so the problem is slightly different. – o0'. May 8 '15 at 9:19
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  1. Because Mt.Gox has to abide by anti money laundering laws they require at least some form of identification. Although this is a requirement for Fiat to Bitcoin conversion there is no need to link your normal bitcoin transactions to your Bank Account / Identity. Wallet services that deal solely with bitcoin do not need to comply with AML laws and hence require no identification or bank details.

  2. Mt.gox doesn't support many features that My Wallet does: Export private keys - Generate New Address - Unconfirmed transactions - Alerts - Multi Recipient Transactions - Paper Wallets - Labelling Addresses.

  3. Even though Mt.gox is the largest and most trusted exchange you are still using them as a bank and are not in control of your own private keys. One of the key advantages of bitcoin is it allows you to be in control of your money without needing a third party. With the new javascript based wallet services your keys are encrypted and decrypted inside your own browser so you never share your keys with the server. Some trust is still required unless you use a paper wallet, but it is at least a happy medium.

  4. Withdrawal limits.

  5. No way to know if Mt.Gox actually has your funds and is not operating as a fractional reserve.

Disclaimer: I am biased because I operate My Wallet

  • But we don't need a "verified" account to use MtGox right? A "normal" account, doesn't identify us...... – Pacerier May 14 '13 at 12:45
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Mt. Gox operates a hosted (shared) EWallet. That means that the bitcoin address provided to you for making deposits is not your address, it is instead Mt. Gox's address that they will monitor and credit your account for for any coins received at that address.

But to withdraw, you are entirely at Mt. Gox's mercy.

Their terms of service, shown when you first sign up, include verbiage that justifies nearly any action they take with your funds.

Now they have, for the most part, been fair in their dealings, but why oh why would you want to place your bitcoins, those units of digital currency you worked so very hard to acquire, into the hands of someone else who insists on a usage policy that gives them all the power and you none?

When you use a hybrid EWallet (e.g., Blockchain.info/wallet or Strongcoin.com ) or an SPV client (e.g., Electrum, Bitcoin Spinner for Android) then your Bitcoin address is yours. Blockchain.info only stores and encrypted copy of your wallet on their servers, so they don't even have access to your coins. Bitcoin Spinner stores the private key that all your bitcoin addresses derives, and the back end server that it connects to does not have access to that key.

That those are the reasons against using Mt. Gox as an EWallet.

The reasons why you might include convenience. Mt. Gox's hosted (shared) EWallet offers security and convenience:

  • The ability to import private keys and sweep them to your Mt. Gox account. This is a useful feature.
  • Multi-factor authentication. You can limit access so that even from a compromised computer you can likely use Mt. Gox E-Wallet without loss of funds. (The corner case is where the compromise is specifically targeted and uses the one-time password to trick the user into authorizing a different transaction than is presented by the website).
  • I was asked to provide an example of the corner case. Site presents the withdrawal page and asks for your Yubikey. But the attacker blocks the compromised computer from submitting the OTP entered and instead composes a separate withdrawal and enters the OTP from the aborted form. – Stephen Gornick Apr 30 '13 at 5:06
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Mt Gox is large enough to attract regular hackers. I had my account liquidated recently by a thief. Whereas I think some of their extra security apps might be beneficial (e.g. Yubikey) I thought a $25 investment to protect a $50 account was silly. Now I'm $50 lighter, so maybe it was not as unwarranted as I first thought.

Bottom line: Mind your security. My password was not traditionally weak, but it was used to log-in and liquidate my account with 3 transactions happening in about 25 seconds. Therefore I'd not use them for wallet services without a bit more than 1 password between me and all my assets being pulled by an automated system.

  • 1
    I'm sorry for you :( It's worth mentioning they now support Google Authenticator, which is free. – o0'. Aug 22 '12 at 19:11
  • Good deal that! I may pursue that again. I am having a hard time going back though. They are a big target with lots of people looking to break in. Happens to be they got through me once. Though it remains, there are not really other options. Thinking of playing with yubikey for lastpass and paypal as a fun experiment. Though maybe I'll play with Google Authenticator first. Just saw a reference to it about 5 minutes before coming back here. Providence is trying to tell me something! – EFH Aug 24 '12 at 16:46
4

This will be the first site to get under attack by the governments when they start their attack on Bitcoin and you will lose all your deposits. :(

3
  • Support for multiple accounts
  • Being able to trace your coins on Block Explorer
  • Tighter control (if eWallet allows for data encryption)
  • Other bonus features that might be offered (email notifications, vanity address, etc.).
3

MtGox can disappear temporarily or permanently and take all your e-wallet bitcoins with it.

Mt. Gox has been severely hacked, with a massive reserve of its bitcoins stolen. ... a massive hack that has stolen as many as 744,000 bitcoins, fully 6% of all bitcoins in existence. ... "MtGox can go bankrupt at any moment".

I don't know of this is irresponsible journalism and exaggeration but the possibility of it being true (of any similar business) is a factor I would take into account when deciding whether to place bitcoins in a MtGox eWallet.

  • 1
    Yes but this does not anything to what has already been said... – o0'. Feb 25 '14 at 17:10
  • 1
    @Lohoris: I may have missed where this was already said. Which answer points out that MtGox can be forced out of business (other than by govt action) or to withdraw it's service indefinitely without refunding your e-wallet bitcoins first? – RedGrittyBrick Feb 25 '14 at 17:14
  • I'm sorry, I meant "...this does not ADD anothing...", somehow the "add" word has been lost and it might have been difficult to understand what I tried to say. – o0'. Feb 28 '14 at 18:17

protected by Tim Post Mar 7 '14 at 17:05

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