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I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

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Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#291

Post by sunchild »

nomurrcy wrote: post #289
sunchild wrote: post #281

Earlier quoted context omitted.

I doubt you'll find much legal precedent (or published rules on the exchanges) supporting your theory, except in the case where a broker makes unauthorized trades on a seller's behalf. Feel free to prove me wrong...

When I say I have seen it I mean I have seen it first hand. I have worked for banks where trades were unwound with the counter-party for this exact reason. The implementation is messy, but no bank on the other side of a trade wants to be party to trafficking in stolen goods resulting from a fraudulent trade. What happened here is akin to me logging into your brokerage account with a stolen password and selling all yo…

Also, you're talking about counterparties cooperating because they do many transactions together at the institutional level. That's different from the exchange itself voiding the transaction.

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#292

Post by wnight »

blhack wrote: post #211
sliverstorm wrote: post #171

Earlier quoted context omitted.

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.

>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 sam…

> 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.

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#293

Post by morganw »

tedunangst wrote: post #193
Tichy wrote: post #135

Earlier quoted context omitted.

Another question: what happens if somebody steals my Porsche and sells it to somebody else, but I still have a set of car keys. One day I notice my Porsche parked on the curb, use my keys to enter it and drive away? Is it then a Schrödinger-Porsche that belongs to both me and the person who bought it off the thief? What if I never even noticed it was stolen? In fact, as the thief, why even bother with stealing? Why n…

This is why cars have pieces of paper called titles (which you are not supposed to keep in the car itself).

[in my state] a title is an abstract bundle of rights and the piece of paper is a certificate of title. Having the certificate makes it easier to attempt to transfer the title, but lost certificates can be recovered and fraudulent transactions can be unwound.

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#294

Post by bxr »

spitfire wrote: post #284
bxr wrote: post #282

Earlier quoted context omitted.

Who wants to start an exchange? I'd be down for that, it sounds like a fun project in an interesting domain and I was actually thinking about what building one would entail as I've been reading though the comments here.

Business processes. The code is dead simple. A few hundred lines of order matching. The real meat is handling all the business processes, clearing transfers, etc. and finding a legally safe location to put a business like that.

Way to suck the fun out of it :) -- I know, I just think a bitcoin exchange is an interesting concept, the kind of thing I would enjoy knowing my code was running in and got a little caught up bikeshedding in my mind how I'd secure a target like that.

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#295

Post by spitfire »

bxr wrote: post #294
spitfire wrote: post #284

Earlier quoted context omitted.

Business processes. The code is dead simple. A few hundred lines of order matching. The real meat is handling all the business processes, clearing transfers, etc. and finding a legally safe location to put a business like that.

Way to suck the fun out of it :) -- I know, I just think a bitcoin exchange is an interesting concept, the kind of thing I would enjoy knowing my code was running in and got a little caught up bikeshedding in my mind how I'd secure a target like that.

You know what's really fun? Chilling on a beach somewhere while girls in grass skirts bring you drinks with umbrellas in them.

For that I'll put my ego aside and do a few weeks of boring work. and yeah, I was fantasizing about neat-o technology problems too. I'd love to build an order matching system. Then I got to thinking about the market size, and taking a cut of each transaction.

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#296

Post by dedward »

rmc wrote: post #237
william42 wrote: post #181

Earlier quoted context omitted.

Out of curiosity, how big is Mt. Gox compared to the other bitcoin exchanges?

MtGox has about 90% of the bitcoin change market.

I'm probably thinking of something different - but wasn't it clear in the bitcoin protocol itself that if a single actor controlled a majority percentage of the bitcoins out there, the model falls apart and is at risk?

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#297

Post by dedward »

colonelxc wrote: post #164
keeperofdakeys wrote: post #132

Earlier quoted context omitted.

Unless it was the BTC mtgox directly own, that would mean that the BTC you upload aren't the ones that are transferred when you trade (remember BTC are unique). Although I haven't used MtGox, I was pretty sure that it is the case that BTC you upload are the ones that are transferred.

When you transfer money to MtGox, you're essentially giving it to them. They give you a unique address to send to (so they know who sent the money to them), but after that transaction they have your money. Then, they just update the DB reflecting you have X amount of BTC in your account. As you trade with other people on the market, your respective accounts are updated in the DB. When you want to withdraw, you tell M…

Which is why a centralized account holding the majority of BTC out there breaks the entire model.....

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#298

Post by Nrsolis »

pdovy wrote: post #283
Nrsolis wrote: post #280

Earlier quoted context omitted.

There are some other important differences: 1. In the US, most exchange operators are the counter-parties to all trades. They also interact with settlement and clearing services that ensure the verification of proper ownership and conveyance of securities. In the old days, something like a third of all trades failed to meet the three-day window because some part of this process would fail. 2. There are very very spec…

I'm not sure where you're coming from with #2. Most exchanges use price-time priority to determine execution order. From the description the best bid was $0.01, so obviously he would get filled first at $0.0101. The real problem is that the market was able to descend to that level to begin with. There should have been some sort of circuit breaker limits in the Mt. Gox system that would have halted such a massive decl…

What I meant in #2 was that there are market structure rules about things like minimum price improvement levels and how widely a buy or sell order is circulated before finding a cross. The HFT guys are masters at exploiting the market microstructure to extract alpha. Google SOES bandit if you need further examples.

As for #3, naked access is a relatively new invention and the rules are sufficiently constructed to virtually guarantee that only implicitly informed parties are ever going to see "naked" access.

Circuit breakers (actually the lack of them) is one of those things that enabled this to occur. The party in question essentially copied a strategy that was used by the HFT guys to soak up the offer. The seller got liquidity but it came at a very dear price.

And that's really the issue here: circuit breakers are a compromise between liquidity and price discovery. If the exchange suddenly sees that price discovery is trending outside of a range, they shut down trading. If the problem is a systemic market one, then this probably is a good idea. But if price movement is because of new information, then all the circuit breakers in the world wont help you because as soon as trading resumes, the new regime will be in play.

Re: I'm the guy who bought 259684 Bitcoins for under $3000 yesterday

#300

Post by danenania »

jrs235 wrote: post #239

Has it occurred to anyone that the reason Mt Gox may want to rollback the transactions is because the account that was hacked belonged to Mt Gox or someone affiliated with Mt Gox???

I think this is ~99% certain based on how it played out.
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