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Bitcoin's $137k Jackpot

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Re: Bitcoin's $137k Jackpot

#111

Post by stale2002 »

xigency wrote: post #98
stale2002 wrote: post #45

Earlier quoted context omitted.

OK, but then you have to have an authority, and that authority would have power over you and the transaction! The whole point of bitcoin is permissionless transactions. It is to make transactions even if the authorities don't want them to happen.

No, I'm saying the authority would provide resources to enable transactions, not an authority that controls transactions, which is actually what the distributed network of miners does in the case of Bitcoin. In this case, the authority would provide stamps for transactions.

Aaaand what if that authority refuses to provide resources to transactions it doesn't like?

That's why bitcoin is decentralized. To prevent something like that.

Re: Bitcoin's $137k Jackpot

#112

Post by Houshalter »

gertef wrote: post #41
Houshalter wrote: post #37

Earlier quoted context omitted.

The problem with confirmation is it trains the human to always press "yes". You need a system that only activates if something really unusual or wrong.

unusual, like paying 1 billion times over recent prices?

Yes of course. I'm just saying that usually these systems are badly designed, and recognizing errors correctly is a surprisingly hard problem.

In the medical world, many people have been killed by mistakes in prescriptions, despite everything going through computers and multiple humans checking it.

The problem was that the machines were too sensitive to mistakes and trained the humans to ignore warnings. They also didn't distinguish mild warnings from extreme warnings. E.g. a prescription being 2x larger than recommended, or 100x larger than recommended, which are very different situations. A well designed interface might have different shades of red for different levels of severity. To give an indication if something is really wrong.

Re: Bitcoin's $137k Jackpot

#113

Post by aws_ls »

optforfon wrote: post #108
ryan-c wrote: post #4

> Remember that time when you tried to transfer your life savings from one bank account to another for a small fee, but swapped the fee field with the total transfer amount field, and ended up losing all your life savings? Of course you don't. There are safeguards to catch and prevent these kinds of errors. > > But this is a common occurrence in Bitcoin-land. This mistake is difficult, if not impossible, to make with…

I'm surprised that this even happens. It's so involved to make a transaction yourself. It's not like leaving your keys on the kitchen counter. It's more like building a house and forgetting to add a door

Basically, any client which can speak the protocol can send transactions. Normal human consumers use it via clients like multbit-hd (on Desktop) or any of the online wallets, which of course don't allow this mistake to happen, as they calculate the fee for you (online wallets add their commission as well).

But as the article says, likely it happened via a script. But its a very costly mistake. I hope we know the real cause of it.

Overall, I like the depth the article has gone into. But I don't agree with this sentence:

the kind of script that swaps arguments by mistake may be the kind of script that does not write its keys out to a database, so the private keys may be long gone

I think the article got it wrong. How can the private key be lost (and also logged to DB!)? The 291+ btc would have come from some public key. If that that public key has got more btc attached to it, then the owner surely still has the private key. Also even if its zero value now. The wallet (public-key) from which the money came, would still exist, and private key still there somewhere.

So the miner can return the extra BTC to the same public key. Am I missing something?

Re: Bitcoin's $137k Jackpot

#114

Post by wimagguc »

ryan-c wrote: post #4

> Remember that time when you tried to transfer your life savings from one bank account to another for a small fee, but swapped the fee field with the total transfer amount field, and ended up losing all your life savings? Of course you don't. There are safeguards to catch and prevent these kinds of errors. > > But this is a common occurrence in Bitcoin-land. This mistake is difficult, if not impossible, to make with…

All types of costly mistakes happen in non-bitcoin land too: Deutsche Bank accidentally transfers $6bn to hedge fund client (http://www.theguardian.com/business/2015/oct/20/deutsche-ban...)

...as long as humans are involved in transactions (by writing software if anything), human errors seem to be bound to happen.

Re: Bitcoin's $137k Jackpot

#115

Post by tormeh »

matt_wulfeck wrote: post #91
brg1007 wrote: post #50

Earlier quoted context omitted.

Meanwhile in Europe I'm paying 30 cents for bank transfers within the EU up to 50K.

That's a shame. I just transferred money from one bank to another here in the US and it was free. To my surprise it also happened instantly!

Is this a recent development?

Re: Bitcoin's $137k Jackpot

#116

Post by aws_ls »

aianus wrote: post #31
thescriptkiddie wrote: post #29

Earlier quoted context omitted.

Each bitcoin block takes 25 BTC (11000 USD at time of writing) worth of electricity to mine, because that is the maximum that the sum total of miners can afford to spend and still break even. Currently it's only possible to fit somewhere around 2000 transactions in each block, because there is a hard-coded limit on the size of a block (1 MiB). So each transaction costs 11000/2000=5.5 USD, which is indeed the approxim…

> So each transaction costs 11000/2000=5.5 USD No, each transaction costs at most $5.50 USD. You haven't established any lower bound in your calculations. A better approach would be to calculate the average number of hashes required to mine a block and the power efficiency of the latest generation ASIC miners. Also, for what it's worth, $5 is much cheaper than a Western Union or SWIFT wire transfer so even this upper…

>much cheaper than a Western Union or SWIFT wire transfer

But in practice, even when a user moves bitcoins between their own wallets its results in that transaction getting registered in the block chain. Which is very unnecessary, costly, inefficient and also may compromise the user's privacy. That's why IMHO some kind of solution whether it is lightning network[1] or sidechains is needed.

[1] https://lightning.network/

Re: Bitcoin's $137k Jackpot

#117

Post by Andrew_Quentin »

xigency wrote: post #33
shemnon42 wrote: post #28

Earlier quoted context omitted.

Those older examples suffered from the "double spend problem" where you could spend the digital currency twice (or more). Kind of like cheque fraud. The Proof of Work part of bitcoin (the part that consumes all that electricity) creates a consensus record so that if double spends are performed, only one of them will stick. Now double spends are a "feature" called "replace by fee." Preventing double spends is worth mi…

Yes, and maybe that was the main obstacle to implementation. Reading some of the original literature, and glossing over the textbook, it seems like many of the issues involved with double spending and counterfeiters are _eventually_ resolved with someone going to jail, rather than being able to resolve the financial payments in order. A naïve solution - which might save some energy - what about using signed timestamp…

Some are working on a consensus system called proof of stake which does not use energy. It is not clear whether it will be fully secure, etc., but if you read about this stuff decades ago you might want to google and research primarily Bitcoin and Ethereum.

Re: Bitcoin's $137k Jackpot

#118

Post by felipeerias »

wimagguc wrote: post #114
ryan-c wrote: post #4

> Remember that time when you tried to transfer your life savings from one bank account to another for a small fee, but swapped the fee field with the total transfer amount field, and ended up losing all your life savings? Of course you don't. There are safeguards to catch and prevent these kinds of errors. > > But this is a common occurrence in Bitcoin-land. This mistake is difficult, if not impossible, to make with…

All types of costly mistakes happen in non-bitcoin land too: Deutsche Bank accidentally transfers $6bn to hedge fund client ( http://www.theguardian.com/business/2015/oct/20/deutsche-ban... ) ...as long as humans are involved in transactions (by writing software if anything), human errors seem to be bound to happen.

The diference with Bitcoin-land is right there in the article: "and recovered one day later".

Re: Bitcoin's $137k Jackpot

#119

Post by Andrew_Quentin »

xigency wrote: post #95
CydeWeys wrote: post #78

Earlier quoted context omitted.

I've been using central ledger currency systems (i.e. logging into my bank's website and issuing payments) for longer than Bitcoin has existed. Decentralization is the entire point of Bitcoin. Take that away and you aren't left with anything that wasn't already done long ago. What you're proposing is something that banks have already been doing widely for decades.

> Take that away and you aren't left with anything that wasn't already done long ago And that is exactly my point. There are very interesting ideas in digital currencies/digital cash that have no representation in Bitcoin or at all. By using Bitcoin, like using your bank's website, you still need an Internet connection to use your currency digitally. However, it's possible to create a digital currency that doesn't ha…

Problem is that if it was centralized it may be shut down. Moreover, the central entity would have to issue money and comply with aml etc and register accounts, thus turning it into a bank.

Re: Bitcoin's $137k Jackpot

#120

Post by mnx »

CydeWeys wrote: post #82
joshuak wrote: post #79

Earlier quoted context omitted.

This does not serve as a tumbling mechanism because the participants aren't peers. The coins went all one direction from source to many destinations. If those many destinations don't, in turn, pay the source back in some way you've just lost the money not laundered it.

I don't understand your objection. The mechanism I explained works to launder and obscure the auditable trail of Bitcoin. All I figure is that you're pointing out some there is some risk inherent in the mining pool simply walking away with the money. OK, sure. There's lots of trust involved in the Bitcoin ecosystem. Every time I buy something on the Internet with Bitcoin I'm trusting the retailer to send me what I or…

Which... they historically are not that unlikely to do.
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