On: 500k Bitcoins traded in 1h, Mt.Gox market hacked +...

[sunchild]

And therein lies the seed of the eternal cat-and-mouse game that is key management.

Technically, each layer of security you impose is also an impediment to the bitcoin market's liquidity.

[weavejester → sunchild]

Technically true, but no-one can sell off 500k bitcoins without the market crashing anyway, so from a practical perspective, no liquidity is lost.

[sunchild → weavejester]

Agreed. It seems the real fallout of this incident is the fact that the rollback can never recover BTC taken out of the exchange accounts and put into anonymous local "wallets". I wonder who will cover those losses?