7 ms·

This reminds me of a conversation I was having with a friend a couple of days ago about network affects. Once a system gets too big, the nice people that start

by blhack 15y ago

This reminds me of a conversation I was having with a friend a couple of days ago about network affects. Once a system gets too big, the nice people that started it start getting screwed by the people who don't understand (or care about) the founding ideals. The problem with a trading house like Mt. Gox is that some people assume that all of the players are altruistic (these "some people" being "me", somebody with a technical, non-financial interest in bitcoin). What happened here is just natural selfishness: the person that executed this buy order knew that the market was crashing, and that something was going wrong, but decided to exploit it regardless. Then trying to withdraw $5 million USD from Mt. Gox? I guess it's just crowd psychology. "If I don't exploit this market, somebody else will!" It's sad, and it's just my naivety showing here, but bitcoin looks like a nerdy sandbox from the outside (casually reading about it on HN); it's a place for crypto/economics geeks to play around with finance. Of course it isn't, and the actions of this [very greedy] person demonstrate that. So why do I want to use bitcoin? What advantages does it offer me over USD right now? Before seeing this crash for the last couple of days, it felt like the advantage was that bitcoin users were mostly geeks, and mostly trustworthy. The regulation that bitcoin is avoiding is starting to look pretty darn appealing. How stupid/childish of me is it to daydream about a world where somebody saw this crash happening, did exactly what he did (or maybe put in the buy order at exactly $0.02), held the bitcoins until the crash ended, then just gave them back to the sellers at cost?

jacques_chester 15y ago
> Then trying to withdraw $5 million USD from Mt. Gox? He didn't do that. He withdrew $1000, once, and some bitcoins. Then notified the administrators.
- blhack 15y ago
  It sounded like he probably tried to remove the bitcoins, hit the limit, then contemplated hitting that $1000 limit a bunch of times. Honestly, this whole forum post reeks of "I know I did something wrong, hopefully posting here will make the pit in my stomach go away." Same goes for contacting magicaltux (the admin of mtgox) -- I bet he was absolutely losing his mind when the trade went through. I know I would have been.
  - sliverstorm 15y ago
    You're upset he contemplated doing something shady? Jesus, since when has uncouth thoughts been grounds for conviction? If it was, I'd be guilty of a trillion crimes.
    - blhack 15y ago
      >Jesus, since when has uncouth thoughts been grounds for conviction? If it was, I'd be guilty of a trillion crimes. Are you seriously putting these words in my mouth? I didn't say anything like that. The gist of my post was that from a casual reader's perspective, bitcoin was a hobby for cryptographic nerds, and that this demonstrated that it's "lost its innocence", so to speak. Am I "upset" by this? Sure. In the same way that I would be upset if I was competing on something like allrgb, but nvidia decided to come in and destroy me and my friends by building custom glass. Is nvidia be "immoral" there? No. Are they being, to be blunt, assholes? Thoughtcrime? Convicted? I want this to be clear to anybody reading this that doesn't understand the context of what I'm saying: (I'm trying to say this in the most polite way possible) your response here is completely incorrect, and without merit. You're accusing me of something that I consider morally abhorrent (accusing somebody of "thoughtcrime"), and it's ridiculous.
      - wnight 15y ago
        > It sounded like he [...] contemplated hitting that $1000 limit a bunch of times. That's the thought, and you treat it like a crime. Hence, thought-crime.
        blhack 15y ago
        How am I treating this like a crime? I'm saying that all of the players in bitcoin aren't altruistic. In case you missed the context here, my original argument was that my naivety caused me to assume that people playing with bitcoin were mostly just cryto geeks.
        15y ago
pyre 15y ago
This (http://news.ycombinator.com/item?id=2676336 http://news.ycombinator.com/item?id=2676336) is why it happened. > Then trying to withdraw $5 million USD from Mt. Gox? He was stating that he could have withdrawn the entire amount, but didn't want to appear shady (especially since doing so would have made him seem even more like a hacker that initiated the sell order).
- blhack 15y ago
  Yeah, reading the story that is what he says, but the fact that the also doesn't want to give back the 600BTC or so that he ended up getting out to me suggests that he isn't quite that honest. If the limit had been $10,000 -- I'm sure he would have gone for that.
  - scott_s 15y ago
    Are you using "honest" to mean "good intentions"? Because I think he's told the truth about everything, and I'm not surprised that someone who made money in a market wants to keep that money.
  - sunchild 15y ago
    Why? There is a perfectly legitimate argument for letting him keep the funds. They were put up for sale, and he bought them. It was MtGox's systems that executed the trade. If the sell order was invalid, it was MtGox's fault, or the seller account holder's, not the buyer's.
    - nomurrcy 15y ago
      I'm not really sure I agree with this. The right to sell something is predicated on owning the item in question. A buyer of stolen goods is unable to take legal ownership, it doesn't matter if he doesn't know the item is stolen. (i.e. I steal a car, and sell it to you, you don't own the car even though you gave me money and you didn't know the car was stolen) It does matter that the coins were not put up for sale by the owner.
sambeau 15y ago
Tell that to the British people: http://en.wikipedia.org/wiki/George_Soros http://en.wikipedia.org/wiki/George_Soros http://en.wikipedia.org/wiki/Black_Wednesday http://en.wikipedia.org/wiki/Black_Wednesday
weavejester 15y ago
I'm actually almost glad Bitcoin has suffered these high-profile attacks. The amount of money actually lost seems to be relatively small, and its better attacks like this happen now, whilst the market is still small. Without regulation or reversible transactions, Bitcoin security has to be very good indeed, and this is the sort of incident that might encourage better security measures. Quite frankly, Mt. Gox never struck me as particularly secure. I'm very surprised anyone would keep a large amount of money in it, instead of transferring it out to their accounts.
- danneu 15y ago
  I agree. Stress tests like this are inevitable, so the sooner they happen, the better hardened Mt Gox and other exchanges can become.
anigbrowl 15y ago
Before seeing this crash for the last couple of days, it felt like the advantage was that bitcoin users were mostly geeks, and mostly trustworthy. Yeah whatever. 90% of the people using Bitcoin don't believe in the Federal Reserve system or fiat money and just want anonymous online cash transactions. There is nothing wrong with such beliefs or desires, but the idea that such people are on a higher moral plane is the complaint of a naive person at best.
- Produce 15y ago
  On the other hand, holding the belief that everyone is morally identical is even more naive.
christoph 15y ago
What happened here is just natural selfishness: the person that executed this buy order knew that the market was crashing, and that something was going wrong, but decided to exploit it regardless. All others moaning about what he did who bid at 0.1 weren't?
kevinpet 15y ago
So the same folks encrypting their grocery lists with 8192bit RSA so the NSA doesn't read them are relying on ideals to keep the currency exchange functioning? A system robust against outright criminals still works when you have decent people. The converse is not true.

by blhack 15y ago

jacques_chester 15y ago

> Then trying to withdraw $5 million USD from Mt. Gox? He didn't do that. He withdrew $1000, once, and some bitcoins. Then notified the administrators.

blhack 15y ago
It sounded like he probably tried to remove the bitcoins, hit the limit, then contemplated hitting that $1000 limit a bunch of times. Honestly, this whole forum post reeks of "I know I did something wrong, hopefully posting here will make the pit in my stomach go away." Same goes for contacting magicaltux (the admin of mtgox) -- I bet he was absolutely losing his mind when the trade went through. I know I would have been.
- sliverstorm 15y ago
  You're upset he contemplated doing something shady? Jesus, since when has uncouth thoughts been grounds for conviction? If it was, I'd be guilty of a trillion crimes.
  - blhack 15y ago
    >Jesus, since when has uncouth thoughts been grounds for conviction? If it was, I'd be guilty of a trillion crimes. Are you seriously putting these words in my mouth? I didn't say anything like that. The gist of my post was that from a casual reader's perspective, bitcoin was a hobby for cryptographic nerds, and that this demonstrated that it's "lost its innocence", so to speak. Am I "upset" by this? Sure. In the same way that I would be upset if I was competing on something like allrgb, but nvidia decided to come in and destroy me and my friends by building custom glass. Is nvidia be "immoral" there? No. Are they being, to be blunt, assholes? Thoughtcrime? Convicted? I want this to be clear to anybody reading this that doesn't understand the context of what I'm saying: (I'm trying to say this in the most polite way possible) your response here is completely incorrect, and without merit. You're accusing me of something that I consider morally abhorrent (accusing somebody of "thoughtcrime"), and it's ridiculous.
    - wnight 15y ago
      > It sounded like he [...] contemplated hitting that $1000 limit a bunch of times. That's the thought, and you treat it like a crime. Hence, thought-crime.
      - blhack 15y ago
        How am I treating this like a crime? I'm saying that all of the players in bitcoin aren't altruistic. In case you missed the context here, my original argument was that my naivety caused me to assume that people playing with bitcoin were mostly just cryto geeks.
        15y ago

pyre 15y ago

This (http://news.ycombinator.com/item?id=2676336 http://news.ycombinator.com/item?id=2676336) is why it happened. > Then trying to withdraw $5 million USD from Mt. Gox? He was stating that he could have withdrawn the entire amount, but didn't want to appear shady (especially since doing so would have made him seem even more like a hacker that initiated the sell order).

blhack 15y ago
Yeah, reading the story that is what he says, but the fact that the also doesn't want to give back the 600BTC or so that he ended up getting out to me suggests that he isn't quite that honest. If the limit had been $10,000 -- I'm sure he would have gone for that.
- scott_s 15y ago
  Are you using "honest" to mean "good intentions"? Because I think he's told the truth about everything, and I'm not surprised that someone who made money in a market wants to keep that money.
- sunchild 15y ago
  Why? There is a perfectly legitimate argument for letting him keep the funds. They were put up for sale, and he bought them. It was MtGox's systems that executed the trade. If the sell order was invalid, it was MtGox's fault, or the seller account holder's, not the buyer's.
  - nomurrcy 15y ago
    I'm not really sure I agree with this. The right to sell something is predicated on owning the item in question. A buyer of stolen goods is unable to take legal ownership, it doesn't matter if he doesn't know the item is stolen. (i.e. I steal a car, and sell it to you, you don't own the car even though you gave me money and you didn't know the car was stolen) It does matter that the coins were not put up for sale by the owner.

sambeau 15y ago

Tell that to the British people: http://en.wikipedia.org/wiki/George_Soros http://en.wikipedia.org/wiki/George_Soros http://en.wikipedia.org/wiki/Black_Wednesday http://en.wikipedia.org/wiki/Black_Wednesday

weavejester 15y ago

I'm actually almost glad Bitcoin has suffered these high-profile attacks. The amount of money actually lost seems to be relatively small, and its better attacks like this happen now, whilst the market is still small. Without regulation or reversible transactions, Bitcoin security has to be very good indeed, and this is the sort of incident that might encourage better security measures. Quite frankly, Mt. Gox never struck me as particularly secure. I'm very surprised anyone would keep a large amount of money in it, instead of transferring it out to their accounts.

danneu 15y ago
I agree. Stress tests like this are inevitable, so the sooner they happen, the better hardened Mt Gox and other exchanges can become.

anigbrowl 15y ago

Before seeing this crash for the last couple of days, it felt like the advantage was that bitcoin users were mostly geeks, and mostly trustworthy. Yeah whatever. 90% of the people using Bitcoin don't believe in the Federal Reserve system or fiat money and just want anonymous online cash transactions. There is nothing wrong with such beliefs or desires, but the idea that such people are on a higher moral plane is the complaint of a naive person at best.

Produce 15y ago
On the other hand, holding the belief that everyone is morally identical is even more naive.

christoph 15y ago

What happened here is just natural selfishness: the person that executed this buy order knew that the market was crashing, and that something was going wrong, but decided to exploit it regardless. All others moaning about what he did who bid at 0.1 weren't?

kevinpet 15y ago

So the same folks encrypting their grocery lists with 8192bit RSA so the NSA doesn't read them are relying on ideals to keep the currency exchange functioning? A system robust against outright criminals still works when you have decent people. The converse is not true.