Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Bitcoin Crash

bbc.co.uk

Post reply on HN
Print view View original

21–30 of 62 posts

Re: The Bitcoin Crash

#21

Post by batterseapower »

jgrahamc wrote: post #2

Slightly off topic, but there's a lovely little novel called "The Cryptographer" about an electronic currency set up by a man called "John Law" that runs in parallel to hard currencies (in the book it's referred to as 'soft'). http://www.amazon.co.uk/Cryptographer-Tobias-Hill/dp/0571218...

From WP: "John Law was a Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself and that national wealth depended on trade".

Also used as a pseudonym by Mencius Moldbug for his classic piece on gold: http://www.safehaven.com/article/5205/why-the-global-financi...

Re: The Bitcoin Crash

#22

Post by mathly »

illumin8 wrote: post #17

Bitcoin will recover, but right now it is going through a liquidity crisis: Only a small percentage of BTC users were using Tradehill, a competitive BTC exchange. People have rushed to create accounts there, however it takes a few days to transfer money in, so right now there are more sellers than buyers, causing prices to go lower. In addition, apparently some people have their money tied up in unreachable MtGox acc…

Maybe we shouldn't be so trusting of Bitcoin Exchanges? http://nerdr.com/bitcoin-exchange-scam-bitcoins-are-worthles...

Re: The Bitcoin Crash

#23

Post by IsaacL »

rrrazdan wrote: post #19

This is one of the most balanced coverage of the Bitcoin issue I have seen. "The system has proved popular with online criminals, keen to keep their financial transactions secret, although it has a wider, legitimate, user base." Nicely researched. Kudos to the BBC team. Shows why BBC is still the trusted source for many of us.

I'm also surprised that bitcoin is being covered in such a mainstream news source - I was under the impression that it was still only of interest to the techy early adopter crowd.

Re: The Bitcoin Crash

#24

Post by pbhjpbhj »

sltkr wrote: post #7
wurf wrote: post #3

that's only half the truth, here's the story of the so called "fraudster": http://forum.bitcoin.org/index.php?topic=20207.0

Note that there are at least two people involved (excluding Mt Gox): a hacker that managed to gain access to a large amount of bitcoins and started selling them all, and a person that profited of the low price by placing a large buy order at 1.01¢ per coin (so as to outbid sellers at 1¢ but still pay a very low price). Kevin/toasty admitted to be the buyer, but he is not the hacker (at least, he claims he isn't and M…

>but there is no proof of that whatsoever

There is no independent proof of Mt.Gox's claim either is there?

Re: The Bitcoin Crash

#25

Post by IsaacL »

thanasop wrote: post #20
watt wrote: post #14

I really wonder who is the person whose coins were being sold off. I mean, that's the real story here: somebody had many tens of thousands of BTC that were stolen from his MtGox account and were sold off at a very low price. (The story that people were buying BTC at very low prices is a distraction, the real story is that somebody was SELLING at this low price.) The other thing is that MtGox did not suspend trading o…

The amount sold was over 500000 BTC - more that all estimated deposits on MtGox. The likely explanation is that these were just virtual BTCs added through SQL injection. The alternatives are that a single person was keeping that much on an exchange rumored to be insecure and used insecure password (easily cracked from leaked md5 hashes), or the person decided to sell half his BTC for $0.01 - an extra $2500 in additio…

That raises an interesting point.

The nature of Bitcoin is supposed to prevent things like fractional reserve banking, since the nature of the system means you can't give people BTC you don't have. It's impossible to create bitcoins in any other way except mining.

However, if people are making BTC transactions through a centralized exchange such as Mt. Gox, they are in effect moving numbers around in MtGox's database rather than actually transferring bitcoin. This means banks are able to effectively create BTC as they can with fiat currencies, leading to problems like the current case - problems that Bitcoin was designed to solve.

Re: The Bitcoin Crash

#26

Post by sunchild »

rrrazdan wrote: post #19

This is one of the most balanced coverage of the Bitcoin issue I have seen. "The system has proved popular with online criminals, keen to keep their financial transactions secret, although it has a wider, legitimate, user base." Nicely researched. Kudos to the BBC team. Shows why BBC is still the trusted source for many of us.

I had the opposite reaction. I thought it was poorly-researched, esp. in that it parroted MtGox's explanation for the compromise. I don't think the BBC should be so quick to accept that story, given this information: http://news.ycombinator.com/item?id=2676263

Re: The Bitcoin Crash

#27

Post by thorax »

jgrahamc wrote: post #2

Slightly off topic, but there's a lovely little novel called "The Cryptographer" about an electronic currency set up by a man called "John Law" that runs in parallel to hard currencies (in the book it's referred to as 'soft'). http://www.amazon.co.uk/Cryptographer-Tobias-Hill/dp/0571218...

While we're now on this subject, here's Neal Stephenson's scifi tale on cryptocurrencies from 1995: http://www.time.com/time/magazine/article/0,9171,982610-1,00...

Re: The Bitcoin Crash

#28

Post by rrrazdan »

sunchild wrote: post #26
rrrazdan wrote: post #19

This is one of the most balanced coverage of the Bitcoin issue I have seen. "The system has proved popular with online criminals, keen to keep their financial transactions secret, although it has a wider, legitimate, user base." Nicely researched. Kudos to the BBC team. Shows why BBC is still the trusted source for many of us.

I had the opposite reaction. I thought it was poorly-researched, esp. in that it parroted MtGox's explanation for the compromise. I don't think the BBC should be so quick to accept that story, given this information: http://news.ycombinator.com/item?id=2676263

They are quoting an official statement from Mt Gox. Its not like they are accepting this line. But if there is somebody they can quote, its Mt. Gox, not somebody who claims something on a forum. In any case, not mentioning 'toasty' is not really relevant.

Re: The Bitcoin Crash

#29

Post by gwern »

Tichy wrote: post #12

"The system has proved popular with online criminals" Citation needed. Are there any stats on where BitCoin are being spent? Everybody says BitCoin could be useful for criminals, but how big is the adoption so far? How much business did Silk Road generate?

There was a comment on the Silk Road forums (in the context of replying to someone wondering whether buying from a seller with 0 reviews was very risky or not) to the effect that the Gawker article had caused SR to jump from a few hundred accounts to over 9000.

A decent number, granted, but likely most of them have not engaged in any transactions and never will. On the other hand, another poster mentioned that there is another Bitcoin+Tor market site by the name of BlackMarket (or something), so SR is only part of the picture.

Re: The Bitcoin Crash

#30

Post by gwern »

watt wrote: post #14

I really wonder who is the person whose coins were being sold off. I mean, that's the real story here: somebody had many tens of thousands of BTC that were stolen from his MtGox account and were sold off at a very low price. (The story that people were buying BTC at very low prices is a distraction, the real story is that somebody was SELLING at this low price.) The other thing is that MtGox did not suspend trading o…

A 20% trigger wouldn't have been a good idea. Bitcoin moved 20% many times over the last few months without a flash crash happening.
Post reply on HN