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500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

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Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#241

Post by zby »

weavejester wrote: post #57
buro9 wrote: post #39

From the mt.gox site: Huge Bitcoin sell off due to a compromised account - rollback The bitcoin will be back to around 17.5$/BTC after we rollback all trades that have happened after the huge Bitcoin sale that happened on June 20th near 3:00am (JST). Service should be back by June 20th 10:00am (JST, 01:00am GMT) with all the trades reversed and accounts available. One account with a lot of coins was compromised and w…

Trades are internal to Mt. Gox until you withdraw your money either as bitcoins or as USD. The compromised account had a $1000 per day withdraw limit, so the thief could only withdraw $1000 after selling all those coins. The rest of the cash is still within Mt. Gox, and therefore the state of the Mt. Gox DB can be rolled back to before all the coins were sold.

My understanding is that he actually withdrawn BTCs after buying them back - presumably he was not really prepared to all this and only made the hack by accident. Withdrawing dollars would be harder - because he'd need to transfer them via standard banking systems, that takes days and could be stopped on the way and also be much harder to hide traces to the real identity of the hacker. During his buy back operation the price was back around $14 - and this price was used for the $1000 daily withdraw limit - reinforcing the notion that he did not prepare the attack at all.

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#242

Post by weavejester »

aquarin wrote: post #236
etherael wrote: post #232

Earlier quoted context omitted.

This is precisely what I mean by people do not grasp the entire concept of a mathematical law and how it relates to public key cryptography. There are man made laws which are invariably prescriptive, and natural laws (not in the legal sense) which are invariably descriptive, and fallible only to the extent that this is not the case. There is no authority needed to enforce these natural laws just as there is no author…

I pretty well understand both laws of science (PhD in physics) and what PK cryptography is, but you still don't get my point. There is something outside the protocols implementation, that are secure and do the job they are are developed for.

So which "authority" gives gold its value?

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#244

Post by weavejester »

aquarin wrote: post #223
aquarin wrote: post #167

Earlier quoted context omitted.

Let me explain what I mean: "Real" money are just a tokens, transferring the "Trust" between one market participant to authority and other market participant to authority. By "trust" I mean that every participants believe that Rules in the market will be followed. When you have N market participants you have N*(N-1)/2 ways to exchange "trust". If I understand correctly Bitcoin is N to N system. When you have Authorit…

I pretty well understand that there are rules that are technically implemented to be enforced (protocols, cryptography etc) but when there is some problem in the system (hacking, fraud etc.) there is no one to enforce fairness. The value of given currency is not based only on technical implementations but on trust. In this case the trust and Authority is the technical implementation of this protocol (all bitcoin mark…

If someone hacks into your computer and steals bitcoins, you report them to the computer crimes division of the police. It is not the job of the currency itself to enforce fairness. If someone steals $100 from me, it's not the Federal Reserve that gets involved.

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#245

Post by [deleted] »

aquarin wrote: post #236
etherael wrote: post #232

Earlier quoted context omitted.

This is precisely what I mean by people do not grasp the entire concept of a mathematical law and how it relates to public key cryptography. There are man made laws which are invariably prescriptive, and natural laws (not in the legal sense) which are invariably descriptive, and fallible only to the extent that this is not the case. There is no authority needed to enforce these natural laws just as there is no author…

I pretty well understand both laws of science (PhD in physics) and what PK cryptography is, but you still don't get my point. There is something outside the protocols implementation, that are secure and do the job they are are developed for.

[deleted]

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#246

Post by aquarin »

weavejester wrote: post #242
aquarin wrote: post #236

Earlier quoted context omitted.

I pretty well understand both laws of science (PhD in physics) and what PK cryptography is, but you still don't get my point. There is something outside the protocols implementation, that are secure and do the job they are are developed for.

So which "authority" gives gold its value?

Gold is precious metal. You can't "print" it.

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#247

Post by wladimir »

weavejester wrote: post #90
skrebbel wrote: post #71

Earlier quoted context omitted.

> 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 securit…

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.

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.

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#248

Post by aquarin »

weavejester wrote: post #244
aquarin wrote: post #223

Earlier quoted context omitted.

I pretty well understand that there are rules that are technically implemented to be enforced (protocols, cryptography etc) but when there is some problem in the system (hacking, fraud etc.) there is no one to enforce fairness. The value of given currency is not based only on technical implementations but on trust. In this case the trust and Authority is the technical implementation of this protocol (all bitcoin mark…

If someone hacks into your computer and steals bitcoins, you report them to the computer crimes division of the police. It is not the job of the currency itself to enforce fairness. If someone steals $100 from me, it's not the Federal Reserve that gets involved.

And you expect police to return you stolen bitcoins?

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#249

Post by Angostura »

burgerbrain wrote: post #180
marshray wrote: post #104

Earlier quoted context omitted.

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.

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.

Will MtGox buy bitcoins from me? Will the NYSE buy shares from me?

Are these two things actually alike?

Re: 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash

#250

Post by stef25 »

sqrt17 wrote: post #105
bxc wrote: post #73

Earlier quoted context omitted.

> 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.

No, but that's also what would happen when the stock market behaves weirdly enough. It's a good thing, though, that stock markets and foreign exchanges have more trading volume; I'm starting to wonder what happens if a random blokes with a million actual USD wants to game the bitcoin like George Soros did it with the Swedish kroner.

Sorry for being off topic but do you have a link that explains how Soros games the kroner? Just out of genuine interest.
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