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Bad code may be to blame for $500M of cryptocurrency losses in seven months

topbitcoin.lv

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Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#51

Post by jebeng »

jnordwick wrote: post #47
dawhizkid wrote: post #39

Earlier quoted context omitted.

Curious how that factor into the price of BTC?

Very severe price swings. Since supply is decreasing, the demand for bitcoin well whip the price all over the place. Fiat currencies can keep a stable price by liquidity injection (they can also drive it to zero that way too). Bitcoin over corrects by not allowing any new coins to come into existence. Imagine the day there is only a single bitcoin left. Regardless of how small you can split it, massive deflation. Cur…

Supply is increasing though through mining. Stolen coins are still coins. And there's no way that lost coins are out pasing newly mined coins. True loss/data destruction/inaccessibility is fairly rare.

Even in the Bitcoin community it's a huge misconception that Bitcoin is somehow inherently deflationary. The supply increases predictably through mining. It can be price deflationary when demand exceeds supply. But there is nothing inherent or guaranteed about that at all.

Bitcoin is inflationary, with a predictable inflation schedule.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#52

Post by jnordwick »

jebeng wrote: post #51
jnordwick wrote: post #47

Earlier quoted context omitted.

Very severe price swings. Since supply is decreasing, the demand for bitcoin well whip the price all over the place. Fiat currencies can keep a stable price by liquidity injection (they can also drive it to zero that way too). Bitcoin over corrects by not allowing any new coins to come into existence. Imagine the day there is only a single bitcoin left. Regardless of how small you can split it, massive deflation. Cur…

Supply is increasing though through mining. Stolen coins are still coins. And there's no way that lost coins are out pasing newly mined coins. True loss/data destruction/inaccessibility is fairly rare. Even in the Bitcoin community it's a huge misconception that Bitcoin is somehow inherently deflationary. The supply increases predictably through mining. It can be price deflationary when demand exceeds supply. But the…

Btc has a fixed supply that will be hit. About 17 of the 21 million have already been mined. That's a hard cap unless bitcoin radically changes. We will hit a time of zero miner reward, and even before that when the reward in miniscule in relation to float.

We don't know the extent of lost coins. We can make an estimate based on inactive accounts. And stolen coins that have been blacklisted are essentially lost too.

> Bitcoin is inflationary

Crypto people are deluding themselves.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#53

Post by jnordwick »

wereHamster wrote: post #50
jnordwick wrote: post #46

Earlier quoted context omitted.

> recover access if you can prove your identity So hackable, you're saying?

Like banks. The discussion is turning in circles. People lose coins. Have a backup. Too difficult. Put them in a bank. Banks are hackable. Manage the coins yourself. But then I might lose them. (you can replace bank with 'trusted third-party', doesn't change the outcome) Consider the two options: self-managed, or in a trusted third-party. Whichever has the smaller (perceived) risk, that's where you store your coins.…

Fiat banks can recover money though - cash can be found and transactions unwound - and there are techniques to poison what is stolen without permanently decreasing the money supply. Freezing a wallet basically destroys the btc forever with no way to print more.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#54

Post by oillio »

zaroth wrote: post #23

Consider this: Every single Bitcoin mined has either been lost/stolen, or will be lost/stolen, with probability approaching 1 over increasing timespans. I’d argue that since January 2009 about 50% of the ~17M coins minted to-date are lost. But the realization that this number will asymptotically approach 100% of all coins is a bit striking. The reasoning is simple - maintaining control of your coins is surprisingly d…

Ever heard the rumor that nearly every $20 bill in circulation has detectible residual cocaine on it? In other worlds, the probability that a bill has been involved in a drug deal approaches 1 over increasing timespans.

Interesting anecdote, but not really super informative.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#55

Post by wereHamster »

jnordwick wrote: post #53
wereHamster wrote: post #50

Earlier quoted context omitted.

Like banks. The discussion is turning in circles. People lose coins. Have a backup. Too difficult. Put them in a bank. Banks are hackable. Manage the coins yourself. But then I might lose them. (you can replace bank with 'trusted third-party', doesn't change the outcome) Consider the two options: self-managed, or in a trusted third-party. Whichever has the smaller (perceived) risk, that's where you store your coins.…

Fiat banks can recover money though - cash can be found and transactions unwound - and there are techniques to poison what is stolen without permanently decreasing the money supply. Freezing a wallet basically destroys the btc forever with no way to print more.

And the bitcoin software is written in stone, can never be changed.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#56

Post by bastawhiz »

LogicalBorg wrote: post #41
zaroth wrote: post #23

Consider this: Every single Bitcoin mined has either been lost/stolen, or will be lost/stolen, with probability approaching 1 over increasing timespans. I’d argue that since January 2009 about 50% of the ~17M coins minted to-date are lost. But the realization that this number will asymptotically approach 100% of all coins is a bit striking. The reasoning is simple - maintaining control of your coins is surprisingly d…

Once the number of of Bitcoins approaches zero, the finite value of the Bitcoin ecosystem divided by zero coins approaches infinity. This will create a financial singularity that will open a payment gateway to the hell dimension. This dimension is a land of endless opulence and limitless transaction time ruled over by that vengeful daemon, Satoshi Nakamoto. Good luck, Bitcoin users, you're going to need it! jk lol

Don't worry there's surely a bug in the hell dimension smart contract. We'll fork hell, steal their hellcoins, and force the vengeful demons to mine SHA hashes until the end of time.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#57

Post by junk_f00d »

bpp wrote: post #42
wereHamster wrote: post #37

Earlier quoted context omitted.

Backing your coins up is very easy, most wallets support BIP32/39/44. Just write the mnemonic down and put it under your mattress. Or a safe if you have one. But seriously, for most people under the mattress is equally safe. I don't understand why anyone would keep a non-trivial amount of coins in a wallet and not have a backup. That's irresponsible.

People losing their life savings because they kept it under their mattress is basically the reason that banks were invented. So I suppose this has all come full circle now.

Glacier Protocol offers a solution.

https://glacierprotocol.org/releases/Glacier%20Protocol%20Do...

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#58

Post by curuinor »

SamPatt wrote: post #26
zaroth wrote: post #23

Consider this: Every single Bitcoin mined has either been lost/stolen, or will be lost/stolen, with probability approaching 1 over increasing timespans. I’d argue that since January 2009 about 50% of the ~17M coins minted to-date are lost. But the realization that this number will asymptotically approach 100% of all coins is a bit striking. The reasoning is simple - maintaining control of your coins is surprisingly d…

I've been using cryptocurrency for over five years and haven't lost as much as a satoshi. It's no more difficult than keeping other sensitive data secure.

So it's hard as hell?

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#59

Post by dlwdlw »

rulum wrote: post #49
CodeCube wrote: post #27

Earlier quoted context omitted.

This is a really interesting perspective ... though, I'm sure it could be argued that, "it only makes them more rare, and thus valuable!!11!1!" ;)

And that is exactly what you don't want in "money" in a functional economy. You don't want deflation. You want price stability. So the more it gets artificially valuable, the more useless it becomes for its intended purpose.

It is valuable as a store of value though. Either pure like gold, or tied to something more like assets. USD is a bit strange because it is both a store of value used by many countries as well as a currency. there is an implicit peg to oil though. So the the price of oil is something fairly important to the US.

Re: Bad code may be to blame for $500M of cryptocurrency losses in seven months

#60

Post by dlwdlw »

jacquesm wrote: post #4

Who says it was lost? I suspect quite a few of these 'hacks' are inside jobs to take coins from the general public and move them to the founders/owners/employees of exchanges. Yes, that's a pretty harsh accusation to make, but there is plenty of evidence that this happens with some regularity and the number of instances is high enough to make that claim. And it will continue as long as gullible people place 100's of…

Yea but that's pretty much all hacks reported in the news. It's often social more than technological.
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