Definition
Mt. Gox was a Tokyo-based Bitcoin exchange that, at its peak around 2013, handled the large majority of global Bitcoin trading volume, by some estimates over 70%. Originally launched for a trading-card game, the platform was repurposed for Bitcoin and sold in 2011 to developer Mark Karpeles. Its dominance made its failure one of the most consequential events in Bitcoin's early history.
The collapse
In February 2014 the exchange halted withdrawals, then announced it had lost roughly 850,000 BTC, of which about 200,000 were later recovered. Investigations indicated that theft had been draining the exchange's wallets undetected since around 2011. Mt. Gox filed for bankruptcy in Japan, and Karpeles was later arrested; he was ultimately convicted of data manipulation but acquitted of embezzlement. Creditors spent years in proceedings to recover a portion of the lost coins.
The lasting lesson
For sovereign-minded Bitcoiners, Mt. Gox is the canonical cautionary tale behind the maxim "not your keys, not your coins." The funds were lost not because Bitcoin's protocol failed but because users trusted a custodian holding their private keys. The episode accelerated interest in self-custody, hardware wallets, and running one's own infrastructure, themes that remain central to mining and node operation today.
For the underlying design that makes self-custody possible, see the Bitcoin whitepaper and its description of a trustless, peer-to-peer system.
In Simple Terms
Mt. Gox was a Tokyo-based Bitcoin exchange that, at its peak around 2013, handled the large majority of global Bitcoin trading volume, by some estimates…