Quote from: bitsaber on February 10, 2014, 10:41:20 PM

I hate to be the devil's advocate here (especially being a newbie), but how does "known about since 2011" fit with "cannot be corrected overnight"?

There are plenty of known issues with Bitcoin, some of them more or less serious. This, frankly, is one of the less serious issues, since it only arises when people design custom software very, very badly. Gox and its principals were well aware of this particular issue, having been told about it personally, but chose to design defective software. This wasn't even accidental.

The problem is, if I'm understanding it reduced to its simplest level, relying on transaction information that is NOT YET ON THE BLOCKCHAIN. It kind of boggles my mind anyone could base any reliance for verifying deposits to a system on anything whatsoever not on the blockchain, even for tracking purposes.

It's clearly non-optimal to use this information at all, but the downside of it could have been very easily avoided. I hope no other exchanges operate this way, but I honestly don't know.