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Where is anarchy? What's burning? Someone sold a huge amount of Bitcoins. The market acted accordingly. Expect a bounce back to the old exchange rate as soon a

by gst 15y ago

Where is anarchy? What's burning? Someone sold a huge amount of Bitcoins. The market acted accordingly. Expect a bounce back to the old exchange rate as soon as Mt. Gox is available again. Of course it might be possible that the computer of the person who sold the Bitcoin was cracked. But that's not the fault of Bitcoin - if someone is not capable of taking care of the security of his local computer, it's better not to use a distributed currency where your money is basically stored inside a single file.

skrebbel 15y ago
> Of course it might be possible that the computer of the person who sold the Bitcoin was cracked. But that's not the fault of Bitcoin. Just like it's not the fault of the dollar if someone mugs you at gunpoint. Except robbing someone typically requires you to take physical risks and (threaten to) use violence. I'll be very curious to see any effective way of tracking down bitcoin thieves. If you have to be a security expert to own more than a few dollars worth of bitcoins, the project has effectively failed already.
- weavejester 15y ago
  If you have to be a security expert to own more than a few dollars worth of bitcoins, the project has effectively failed already. Why? It's true that key management and security are not as good as they could be in the official client, but that doesn't mean the project has failed, merely that the client needs to be improved.
  - wladimir 15y ago
    Improving the wallet security is priority #1 of the dev team at the moment. Note that no one of the developers expected it to get this big this fast. Six months ago, no one would even bother stealing bitcoins as they were not more than a toy curiousity. Now very serious amounts of money are represented.
- gst 15y ago
  You don't necessarily have to be a security expert to use Bitcoins, just if you want to run the client by yourself. If you don't have the required knowledge just pay a little bit to a "Bitcoin bank" that handles the task for you. In the real world you also don't carry your money with you all the time, but store it on a bank.
  - ceejayoz 15y ago
    > In the real world you also don't carry your money with you all the time, but store it on a bank. In the real world, the banks are subject to regulation.
    - sukuriant 15y ago
      In the real world, the banks /can/ be subject to regulation, and FDIC is a US creation.
  - potatolicious 15y ago
    Wait, so this is the train of thought for Bitcoin: - Centralized money is bad! We need to create a perfectly decentralized, distributed economy! - Oh no! It turns out that the average Joe will get burned really badly by this new decentralized system! - But wait! What if we created these things called "banks" and provide people peace of mind and security by taking on some of this risk?! - ...? - Um... not profit.
    - danenania 15y ago
      Did you somehow get the idea that bitcoin users are against banking? Banking (as a concept) and decentralized money are not at odds.
      - potatolicious 15y ago
        Banking eradicates many of the supposed gains of decentralized money - not all, but most. I just dig a quick Google for "benefits of Bitcoin" and it seems most people agree on the following: - Anonymity/trackability. Gone if you are with a bank. Sure, possible to sidestep by going through the song-and-dance that is withdraw-send-deposit. We can do this IRL also, but there's a reason people do not. - Taxability. Welp, if your BTCs are in a bank, the IRS can easily get you. - Abusive/coercisve government action (e.g., freezing). Well, yeah, if you're with a bank that can happen too. - Lack of fees. If banks become standard (and if BTC takes off, yes, they will become standard) then kiss goodbye to this benefit - the same way cash right now has no transaction fee, but bank transactions do. In fact, the only major sell of Bitcoin that remains: - Inability for government to arbitrarily expand the supply of money. Still a win, but suddenly Bitcoins have lost a lot of charm, especially for the everyman for whom the above 4 points are much more salient than that last one.
bxc 15y ago
> Someone sold a huge amount of Bitcoins. The market acted accordingly. It doesn't seem very free market to rollback the market and cancel all the free market trades that happened.
- vrotaru 15y ago
  It's entirely free market for an exchange to have its own set of rules and regulation. Yes, for some time MtGox was The Exchange. It seems that it just ended.
- marshray 15y ago
  I agree. If one ever needed an example of why Mt. Gox or Bitcoin shouldn't be taken seriously. They had a withdrawal limit of $1000 per day, too. This was simply to save one more day of that. It makes you wonder if Mt. Gox actually had the hard currency to back up everyone's account balance.
  - sukuriant 15y ago
    I was under the understanding that not even real banks have all the money of their users on hand. What point are you trying to make?
    - marshray 15y ago
      "Real banks" are highly regulated and in the US are backed up by the US government. I don't know of too many other entities that can handle other people's assets with such low reserve requirements without being considered fraudulent. If there are any, I suspect they're heavily regulated or at least exempted as a speculative private fund.
  - burgerbrain 15y ago
    The whole point of the exchange is that what you have is only worth what others participating in the exchange are willing to pay. "It makes you wonder if The New York Stock Exchange actually had the hard currency to back up everyone's account balance." That doesn't make any sense either.
crocowhile 15y ago
Mt.Gox itself was hacked not just a guy. That's a bit like Wall Street being hacked, with due proportions. Also, Mt.Gox reaction to the episode is apparently pissing off a lot of users, as per comments in linked page. I don't think this is the end of bitcoins but surely enough is quite a ouch moment. Lesson I've learned today: given that bitcoin wants to be a better currency, they have the chance to provide a better service. A good bitcoin marketplace should enforce two way authentications, maybe with yubikey or even just GPG keys.
dkarl 15y ago
Exactly, someone sold a huge amount of Bitcoins. I.e., this was the first time it was hacked by someone stupid enough to call enough attention to his crime to have most of what he stole taken back from him. What do you want to bet someone smarter got in there first, and is maybe still in there? There are subtler ways to steal money than grabbing a huge amount all in one chunk and trying to cash out.

by gst 15y ago

skrebbel 15y ago

> Of course it might be possible that the computer of the person who sold the Bitcoin was cracked. But that's not the fault of Bitcoin. Just like it's not the fault of the dollar if someone mugs you at gunpoint. Except robbing someone typically requires you to take physical risks and (threaten to) use violence. I'll be very curious to see any effective way of tracking down bitcoin thieves. If you have to be a security expert to own more than a few dollars worth of bitcoins, the project has effectively failed already.

weavejester 15y ago
If you have to be a security expert to own more than a few dollars worth of bitcoins, the project has effectively failed already. Why? It's true that key management and security are not as good as they could be in the official client, but that doesn't mean the project has failed, merely that the client needs to be improved.
- wladimir 15y ago
  Improving the wallet security is priority #1 of the dev team at the moment. Note that no one of the developers expected it to get this big this fast. Six months ago, no one would even bother stealing bitcoins as they were not more than a toy curiousity. Now very serious amounts of money are represented.
gst 15y ago
You don't necessarily have to be a security expert to use Bitcoins, just if you want to run the client by yourself. If you don't have the required knowledge just pay a little bit to a "Bitcoin bank" that handles the task for you. In the real world you also don't carry your money with you all the time, but store it on a bank.
- ceejayoz 15y ago
  > In the real world you also don't carry your money with you all the time, but store it on a bank. In the real world, the banks are subject to regulation.
  - sukuriant 15y ago
    In the real world, the banks /can/ be subject to regulation, and FDIC is a US creation.
- potatolicious 15y ago
  Wait, so this is the train of thought for Bitcoin: - Centralized money is bad! We need to create a perfectly decentralized, distributed economy! - Oh no! It turns out that the average Joe will get burned really badly by this new decentralized system! - But wait! What if we created these things called "banks" and provide people peace of mind and security by taking on some of this risk?! - ...? - Um... not profit.
  - danenania 15y ago
    Did you somehow get the idea that bitcoin users are against banking? Banking (as a concept) and decentralized money are not at odds.
    - potatolicious 15y ago
      Banking eradicates many of the supposed gains of decentralized money - not all, but most. I just dig a quick Google for "benefits of Bitcoin" and it seems most people agree on the following: - Anonymity/trackability. Gone if you are with a bank. Sure, possible to sidestep by going through the song-and-dance that is withdraw-send-deposit. We can do this IRL also, but there's a reason people do not. - Taxability. Welp, if your BTCs are in a bank, the IRS can easily get you. - Abusive/coercisve government action (e.g., freezing). Well, yeah, if you're with a bank that can happen too. - Lack of fees. If banks become standard (and if BTC takes off, yes, they will become standard) then kiss goodbye to this benefit - the same way cash right now has no transaction fee, but bank transactions do. In fact, the only major sell of Bitcoin that remains: - Inability for government to arbitrarily expand the supply of money. Still a win, but suddenly Bitcoins have lost a lot of charm, especially for the everyman for whom the above 4 points are much more salient than that last one.

bxc 15y ago

> Someone sold a huge amount of Bitcoins. The market acted accordingly. It doesn't seem very free market to rollback the market and cancel all the free market trades that happened.

vrotaru 15y ago
It's entirely free market for an exchange to have its own set of rules and regulation. Yes, for some time MtGox was The Exchange. It seems that it just ended.
marshray 15y ago
I agree. If one ever needed an example of why Mt. Gox or Bitcoin shouldn't be taken seriously. They had a withdrawal limit of $1000 per day, too. This was simply to save one more day of that. It makes you wonder if Mt. Gox actually had the hard currency to back up everyone's account balance.
- sukuriant 15y ago
  I was under the understanding that not even real banks have all the money of their users on hand. What point are you trying to make?
  - marshray 15y ago
    "Real banks" are highly regulated and in the US are backed up by the US government. I don't know of too many other entities that can handle other people's assets with such low reserve requirements without being considered fraudulent. If there are any, I suspect they're heavily regulated or at least exempted as a speculative private fund.
- burgerbrain 15y ago
  The whole point of the exchange is that what you have is only worth what others participating in the exchange are willing to pay. "It makes you wonder if The New York Stock Exchange actually had the hard currency to back up everyone's account balance." That doesn't make any sense either.

crocowhile 15y ago

Mt.Gox itself was hacked not just a guy. That's a bit like Wall Street being hacked, with due proportions. Also, Mt.Gox reaction to the episode is apparently pissing off a lot of users, as per comments in linked page. I don't think this is the end of bitcoins but surely enough is quite a ouch moment. Lesson I've learned today: given that bitcoin wants to be a better currency, they have the chance to provide a better service. A good bitcoin marketplace should enforce two way authentications, maybe with yubikey or even just GPG keys.

dkarl 15y ago

Exactly, someone sold a huge amount of Bitcoins. I.e., this was the first time it was hacked by someone stupid enough to call enough attention to his crime to have most of what he stole taken back from him. What do you want to bet someone smarter got in there first, and is maybe still in there? There are subtler ways to steal money than grabbing a huge amount all in one chunk and trying to cash out.