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Statement on Mt. Gox

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Re: Statement on Mt. Gox

#31

Post by [deleted] »

xdarnold wrote: post #29
gliptic wrote: post #25

Earlier quoted context omitted.

This would require you to discard all the blocks since the transactions started happening and re-mine them with those transactions excluded. This would be completely impossible unless you dedicated most of the mining equipment to this for months and asked those miners to part with their earned mining rewards until this rewritten chain caught up with the official one. Hardly likely.

I don't think this is what I'm suggesting at all. If a popular majority of miners agreed to accept transactions double spending the original coins, this would be tantamount to generating 750k new Bitcoin, not initially invalidating any blocks or other transactions. With forensics on the initial theft, miners could then tree-traverse back up to blacklist future transactions on stolen coins. There are probably lots of…

[deleted]

Re: Statement on Mt. Gox

#32

Post by gnaritas »

mindstab wrote: post #3

A little regulation and over sight might have prevented all this. And with out it going forward all anyone can do is advise best practices, and then watch as some ignore them and also have their money stolen. Very wild west. Totally something I'll be staying well back from

> A little regulation and over sight might have prevented all this.

A little regulation and over sight would have prevented the industry from even existing.

Re: Statement on Mt. Gox

#33

Post by gnaritas »

kaonashi wrote: post #9
mpyne wrote: post #7

Earlier quoted context omitted.

> A little regulation and over sight might have prevented all this. Yes, but that is completely contrary to the whole reason Bitcoin exists in the first place. If you wanted a regulated currency you'd get fiat. It's wild west by definition, which is good for popcorn-muncher like me... but bad for friends of mine who have lost a significant amount of money by "experimenting" with Bitcoin. :(

>Yes, but that is completely contrary to the whole reason Bitcoin exists in the first place. Not really. Satoichi has shied away from the political motivations of a lot of the community.

Satoshi's motivations were political, his first message in the blockchain makes that clear. He hasn't shied away, he's disappeared for obvious reasons.

Re: Statement on Mt. Gox

#34

Post by crystaln »

seabee wrote: post #23
crystaln wrote: post #21

Earlier quoted context omitted.

Please state your point rather than providing just a link. I don't know what you are trying to say.

That a bug in one implementation does not imply a bug in the protocol.

I didn't say there was a bug in the protocol.

There is a bug in the REFERENCE implementation, which is used by almost every exchange. And one criticism of MtGox was that they used a custom version of the reference implementation, and should have used the standard one. You can't have it both ways.

Re: Statement on Mt. Gox

#35

Post by serge2k »

argumentum wrote: post #16
mindstab wrote: post #3

A little regulation and over sight might have prevented all this. And with out it going forward all anyone can do is advise best practices, and then watch as some ignore them and also have their money stolen. Very wild west. Totally something I'll be staying well back from

It's unfortunate that many people lost money (and some might have lost a lot), but if the ecosystem can recover from this without governmental regulation (as I expect it will), we have the first evidence (ever) that there is no need for a central authority to conduct oversight and ensure a robust currency. It looks likely that the free market, which includes the self-regulating actions by Coinbase, Blockchain and oth…

As long you are willing to accept losing money to fraud and/or stupidity?

Re: Statement on Mt. Gox

#36

Post by agorabinary »

mindstab wrote: post #3

A little regulation and over sight might have prevented all this. And with out it going forward all anyone can do is advise best practices, and then watch as some ignore them and also have their money stolen. Very wild west. Totally something I'll be staying well back from

Like regulation and oversight prevented (insert: preserved, perpetuated, safeguarded) Madoff?

Re: Statement on Mt. Gox

#37

Post by xdarnold »

deweller wrote: post #30
xdarnold wrote: post #10

Under the presumption that it is true that ~750k BTC has been stolen, has anyone considered the possibility of orchestrating a 51% attack on the attacker(s)? Gox probably has logs of withdrawal requests. It might be daunting but feasible to sift the tx-MAL withdrawals from legitimate ones, then work with major pools and exchanges to double-spend stolen coins back to Gox. Gox could then be forced (by the same 51% majo…

You are assuming that the thieves stole the bitcoin and just put them into a wallet somewhere. Consider this simplified example: A Gox thief sold the bitcoin on another exchange. Then I unknowingly buy that very bitcoin from that exchange. Now the blockchain is rewritten and my bitcoin is gone even though I am innocent of any crime. The MtGox situation is tragic. But when you start messing with the fungibility of bit…

I'm not making that assumption - rather the opposite, which is why I mentioned the possibility of reimbursing people later. But this isn't strictly necessary. Pragmatically, you could double spend the coins back to the original owners and then make decisions about downstream action independently. Investigation of what happened to the stolen coins might provide more clarity on the best course of action there.

Re: Statement on Mt. Gox

#38

Post by MichaelGG »

xdarnold wrote: post #10

Under the presumption that it is true that ~750k BTC has been stolen, has anyone considered the possibility of orchestrating a 51% attack on the attacker(s)? Gox probably has logs of withdrawal requests. It might be daunting but feasible to sift the tx-MAL withdrawals from legitimate ones, then work with major pools and exchanges to double-spend stolen coins back to Gox. Gox could then be forced (by the same 51% majo…

That really undermines Bitcoin overall.

Also, that makes it more attractive to act maliciously, as an exchange. Either you make off with your stolen BTC (win), or the community fixes things for you (not really a loss).

What would help is some equivalent of FDIC. A group of Bitcoin "banks" that handle your deposits, with some pro-BTC group guaranteeing your deposit up to 100 BTC or something. Getting the insurance would of course require all sorts of intense auditing and oversight. And somehow, someone's gotta pay for it all (perhaps the same group of Bitcoin companies pay in). But that's... very far removed from the current state of affairs.

Re: Statement on Mt. Gox

#39

Post by argumentum »

serge2k wrote: post #35
argumentum wrote: post #16

Earlier quoted context omitted.

It's unfortunate that many people lost money (and some might have lost a lot), but if the ecosystem can recover from this without governmental regulation (as I expect it will), we have the first evidence (ever) that there is no need for a central authority to conduct oversight and ensure a robust currency. It looks likely that the free market, which includes the self-regulating actions by Coinbase, Blockchain and oth…

As long you are willing to accept losing money to fraud and/or stupidity?

In the short term, yes, it means some fools* will be hurt by some frauds. Keep in mind, however, that no amount of regulation will prevent Madoff's greed, for example, and the foolishness of those who blindly trusted him.

In the long term, we will be training people to be better and more diligent actors.

If you can determine the guilty party in the case of frauds, you can still report them to the police. This is enough protection.

* I mean fools in the larger sense of acting without diligence. Every one of us has been such a fool at one time or another, and learned painfully from the experience.

Re: Statement on Mt. Gox

#40

Post by sigil »

diegocg wrote: post #12

It puts all the blame on Mt. Gox, assuming that their lack of good management is to blame. But I still see the lack of reversibility of transactions (one of bitcoin's strengths) as the major problem here. We live in civilized in a world where there are laws and polices and judges and banks and governments, but bitcoin tries to workaround them for no good reason. I'm still hoping that banks will take what to me is the…

> But I still see the lack of reversibility of transactions (one of bitcoin's strengths) as the major problem here.

"Stop Saying Bitcoin Transactions Aren't Reversible" http://elidourado.com/blog/bitcoin-arbitration/

The n-of-m multisignature facilities described in that article are the future of Bitcoin. You probably don't need multisig arbitration when you buy a coffee or a stick of gum, but you probably do when you're transferring large sums. Of course, there was no multisig protection in sight in the MtGox case, but then there was no blockchain in sight either. Far worse errors of judgement were made there.

Bitcoin makes the use of arbitration services optional, and it makes the actual mechanics of arbitration services safer and more efficient. The arbiter in a 2-of-3 multisig transaction can't freeze or seize funds in transit -- hello PayPal! -- and takes zero action in the vast majority of cases, where there is no dispute.

Banks, credit card companies, and existing payment systems like PayPal can't easily, optionally disintermediate themselves. They must play arbiter. And we must pay for it.

> bitcoin tries to workaround them for no good reason.

There's a good reason. Why do businesses today pay transaction fees when you use your card to buy that coffee?

I'll just quote the opening paragraph of the original Bitcoin paper:

"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party."

https://bitcoin.org/bitcoin.pdf

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