Ethereum: When/How did Eligius “indirectly cost MTGOX many thousands of bitcoins”?

Invisible Costs: How Elgius Open Source Approach to MTGOX’s financial tribes

In the recently published forum article, fans of MTGOEX Online Trading Platform (formerly live coin) discussed the unexpected consequences of the open source ethos. In particular, one thread emphasized the indirect costs incurred by MTGOX, which accepted the transaction without distortion. In this article we deal with the story behind Elgius, which led quiet waves in the cryptocurrency community.

Birth of open source code

Elgius, an abbreviation for “Ethereum-like steering”, is an open source platform that offers a decentralized alternative to the traditional stock exchange such as MTGOEX. The basic concept revolves around the Ethereum blockchain so that users can create and manage their own decentralized application (dapps). The original purpose of the project was to create a more transparent and community -managed exchange model.

Promise of standardization

One of Elgius’s most important features is the ability to accept normal transactions without distortion. This means that all users can initiate a transaction on the platform, regardless of the account balance or its preferred currency. This standardization promise was originally promoted to Elgius as a large sales argument and attracted many users who received more open and integrated in exchange.

Indirect costs: MTGOXS Bitcoin Exposure

However, MTGOEX was behind the scenes because of the transparent amount of transaction that Eldius made it easier and made significant financial tribes. When Elgius became more and more popular, MTGOEX also had exposure. The platform has collected a large number of bitcoin from this usual transactions without properly taking into account the underlying risks.

When users initiated transactions using Elgius, their account vouchers were used to buy other devices such as bitcoin, which were then listed on MTGOEX. This created a situation in which MTGOEX actually “buy” its own cryptocurrency, which has led to a significant increase in liquidity and value. Unfortunately, this also meant that the platform’s bitcoin reserves stagnate and tighten the problem.

Hidden cost

Elgius’s open source approach was shown by indirect costs incurred on MTGOEX when the two platforms were made as an unexpected liquidity crisis. When users continued to initiate standard transactions, MTGOEX was made to a huge increase in bitcoin exposure. This led to a situation where the platform bitcoin reserves were no longer sufficient to cover their obligations.

As a result, a financial burden that threatened the existence of MTGOEX. Only when Elgius’s developer recognized the problem and made the necessary adjustments, the platform was restored. This luck did not share all users who invested their bitcoins in Elgius.

Diploma

In summary, the story behind Elgius and MTGOX is a warning story of the unintentional consequences of open source approaches in the development of cryptocurrencies. By preventing the priority of standardization, without properly taking into account the underlying risks, MTGOEX accidentally created a situation in which the “business” of its own wealth cannot be explained.

The event shows the importance of doing thorough risk review and maintaining robust security measures to alleviate possible problems that can occur when decentralized systems, such as Elgius, are brought on the traditional stock exchange. It also emphasizes the greater transparency of the cryptocurrency, in particular the condemnation of concerns about liquidity and asset management.