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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

#251

Post by krschultz »

leon_ wrote: post #224
rorrr wrote: post #184

Earlier quoted context omitted.

5f4dcc3b5aa765d61d8327deb882cf99 = md5("password") for those who don't know Man, these programmers are fucking amateurs. It's a FUCKING TRADING PLATFORM.

I find it funny that people are outraged about unsalted MD5 yet they use passwords like "secret123" that are found in every wordlist. Guess what: Even salted hashes won't save your ass with such weak passwords. And yes: it's a FUCKING TRADING PLATFORM you want to put money on so _you_ should think of a secure password.

And what makes you think that the same people who are complaining about unsalted MD5 are also the same people who use passwords as weak as 'secret123'?

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

#252

Post by weavejester »

aquarin wrote: post #248
weavejester wrote: post #244

Earlier quoted context omitted.

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?

No more than I expect them to return stolen property. If I had a large amount of bitcoins, I'd probably want to insure them, or at least keep the private key in a secure location, such as in a security deposit box.

The police act as a deterrent, and make it more difficult to offload stolen bitcoins without being caught.

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

#253

Post by jerf »

saulrh wrote: post #204
jerf wrote: post #194

Earlier quoted context omitted.

And if "your math" is "number of BitCoins extant time current market value of one BitCoin", your math is not correct. Macha is correct; crashing the market with $500K is proof that the entire MtGox exchange can't be much larger than that, no matter what multiplication says.

Of course MtGox isn't much bigger than $500k per ten minutes. Given how many bitcoins there are and how much each is worth, that kind of volume would be like every cent in the United States changing hands every couple of hours.

You have a terribly flawed idea of how exchanges work and what they are; your logic doesn't flow at all. But I can't really correct that in an HN post.

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

#254

Post by wmf »

base wrote: post #216

Out of curiosity, how does the Mt.Gox hold the bitcoins. Do they have a bitcoin account for every user or do they hold all the bitcoins in their account and trades are only changes in their database?

The latter; in the block chain you can see a single address that holds over 400K BTC.

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

#255

Post by sunchild »

nandemo wrote: post #213
sunchild wrote: post #188

Earlier quoted context omitted.

Just to be clear, I'm not taking a position, only asking a question: how does the exchange layer affect the fundamental goals of bitcoin, esp. the notion that no centralized authority controls monetary policy?

In principle, it doesn't affect that goal. An exchange doesn't control monetary policy, i.e., it doesn't set interest rates or increase the quantity of currency. Of course, an exchange can affect the value of the products it is trading. Since Mt. Gox is the biggest bitcoin exchange, if a vulnerability is found then people might stop trading there, decreasing the liquidity and consequently the value of bitcoin. But th…

But if MtGox's technical failure effectively took USD$120M of bitcoins offline, then MtGox has reduced the supply of BTC for some period of time, no? I understand that exchanges are secondary markets, but they seem to be contrary to the philosophy of no centralized control over supply/demand. I always understood bitcoin to be a per-transaction, ad hoc currency – not an exchange-traded commodity. Of course, people are free to do whatever they want with their stuff...

Edit: I realized after posting that I called bitcoin a "currency" above. I realize that it's a controversial position, but my feeling is that, as a medium of exchange, it qualifies a currency.

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

#256

Post by saulrh »

jerf wrote: post #253
saulrh wrote: post #204

Earlier quoted context omitted.

Of course MtGox isn't much bigger than $500k per ten minutes. Given how many bitcoins there are and how much each is worth, that kind of volume would be like every cent in the United States changing hands every couple of hours.

You have a terribly flawed idea of how exchanges work and what they are; your logic doesn't flow at all. But I can't really correct that in an HN post.

Entirely possible; I'm writing these before bed after getting home from work. I just have a feeling that if someone tried to convert 2% of the world's USD to rubles in a few seconds without an equivalent transfer in the opposite direction everything would explode. MtGox not being able to handle a transaction like this simply means that there was less than 500k flowing in the opposite direction every ten minutes. If there were, that would imply either a spectacular amount of arbitrage or enough transactions going on inside bitcoin for people to be changing 500k back and forth every ten minutes. This crash just means that neither of those are happening, which I find entirely believable.

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

#257

Post by KMob »

zaphar wrote: post #219
ryepdx wrote: post #123

Earlier quoted context omitted.

Yes, but they're the only big game in town not because they held a gun to anyone's head or threatened to throw their customers in jail if they dared to start using another exchange, but because they provided the best service. They did not engage in coercion. This is the heart of the free market and of anarchy.

It is the heart of the free market but it is not the heart of anarchy. Anarchy would happily employ coercion. After all theres no one to stop you when anarchy reigns. In anarchy the big dog wins until a bigger dog comes along. Please don't conflate the free market with anarchy.

"Anarchy would employ coercion"?

You should read up on the foundations of anarchy before spouting your mouth off, since you are woefully ignorant on the subject. Bakunin, Kropotkin, and Bookchin are all good places to start.

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

#258

Post by burgerbrain »

aquarin wrote: post #231
burgerbrain wrote: post #181

Earlier quoted context omitted.

Accidentally upvoted this... HNs really needs to have an undo vote feature, even if it is as blunt as slashdots "undo moderation".

You can always down-vote my other comments if this make you fill better.

Feeling good is not the purpose of the comment voting system.

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

#259

Post by marshray »

Angostura wrote: post #249
burgerbrain wrote: post #180

Earlier quoted context omitted.

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?

Will MtGox buy bitcoins from me?

AFAICT, yes.

Will the NYSE buy shares from me?

Yes, the NYSE is a building full of member broker dealers who will, in fact, buy shares from you when the proper conditions are met. (I.e., you need to be worth their time).

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

#260

Post by sqrt17 »

stef25 wrote: post #250
sqrt17 wrote: post #105

Earlier quoted context omitted.

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.

Actually the bigger event around it was the Black Friday in 1992: The Bank of England was hoping/pretending that the pound would stay strong against the FRG Mark, whereas Soros lent a massive amount of pound to other people. When the pound finally devalued, he could fulfill the lendings (at the cheaper pound price). The Swedish currency took similar damage.

Basically, governments trying to stabilize their currency are in danger of losses whenever they meet someone with even deeper pockets. In contrast, the Japanese government could out-trade Soros in the crash in 1987 and Soros had to pocket substantial losses.

http://en.wikipedia.org/wiki/Black_Wednesday http://en.wikipedia.org/wiki/Monetary_policy_of_Sweden#1992

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