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Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

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Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#51

Post by deweller »

ihsw wrote: post #39
deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

"Coming together" is a bit difficult to determine -- how do you identify a large group of recipient addresses as a single entity? How do you differentiate between a group of addresses belonging to a single owner, and a group of addresses belonging to multiple owners? We can construct a graph tree all destinations beginning from that one address, but what good would that be? Where do you make inferences to determine t…

Or maybe you find that all of these coins end up in addresses that have not been touched in 2 years. That would lend support to the theories that the cold wallet keys were lost.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#52

Post by jackgavigan »

There have been hints that MtGox's losses were due exploitation of the transaction malleability issue.

I don't know if it's possible to identify (from the blockchain) transactions that have been altered in a way that exploits the malleability issue but it should certainly be possible to identify pairs of transactions with identical startpoints, endpoints and sizes (i.e. number of bitcoins).

If it turned out that pairs of such transactions turned out to come from MtGox's wallets to third-party wallets, that would probably be a good starting point.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#53

Post by aurumpotest »

badman_ting wrote: post #23

Does it matter? Edit: Not "does it matter that they are lost", but rather " since they are lost , does it matter where they are".

Well, yes, to a lot of people - both those who lost money in the affair (some people vast amounts), and also to anyone interested in following the development of BTC - if this was theft, how can we prevent repeat incidents to reassure potential Bitcoin buyers; if it was a failure in the technology, what can we do to repair that to make Bitcoin more secure, or if there was some government or official organisations involved, why did they interfere and what're they up to?

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#54

Post by theklub »

zacinbusiness wrote: post #35

So if the bitcoins are seized by some government entity....wouldn't that make the total value of bitcoin go up? Supply and demand and all that... Again, I know very, very little about bitcoin or economics in general.

Yes and no in my opinion. Because while the total supply goes down, some confidence is also lost (at least short term).

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#55

Post by stef25 »

deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

Assuming those transactions you describe constitute "the theft", how on earth could Gox not have noticed their wallets being emptied?

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#56

Post by kordless »

deweller wrote: post #45
ihsw wrote: post #39

Earlier quoted context omitted.

"Coming together" is a bit difficult to determine -- how do you identify a large group of recipient addresses as a single entity? How do you differentiate between a group of addresses belonging to a single owner, and a group of addresses belonging to multiple owners? We can construct a graph tree all destinations beginning from that one address, but what good would that be? Where do you make inferences to determine t…

Here is an example of something you might find: Say you traced these coins to 50 different addresses. And then, for example, say that those addresses lay dormant for 3 months. And then 45 of those addresses send bitcoins somewhere on the same day. That would imply that the coins are under the control of a single owner. I agree it is difficult and beyond the scope of just writing a simple script.

I was thinking about dumping the Blockchain into Splunk. Investigating the best way to do that today.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#57

Post by jsaxton86 »

zacinbusiness wrote: post #35

So if the bitcoins are seized by some government entity....wouldn't that make the total value of bitcoin go up? Supply and demand and all that... Again, I know very, very little about bitcoin or economics in general.

An interesting idea, but it assumes that the demand doesn't change after a government seized a large number of BTC.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#58

Post by jackgavigan »

deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

> Why take 429k and split it into many addresses each containing less than 1,000 BTC each?

Ever heard the adage "Don't put all your eggs in one basket"?

It's possible that MtGox used to operate everything from a single, large wallet but decided to split it up into lots of smaller wallets, to avoid the risk of suffering a single, catastrophic compromise.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#59

Post by glesica »

zacinbusiness wrote: post #35

So if the bitcoins are seized by some government entity....wouldn't that make the total value of bitcoin go up? Supply and demand and all that... Again, I know very, very little about bitcoin or economics in general.

Depending on whether people viewed the seizure as permanent or not, it would reduce the number of available bitcoins and, theoretically, cause a price increase. However, that assumes the volume of bitcoins demanded didn't also go down, which would most likely also happen since a large-scale seizure would reduce confidence in bitcoin and cause fewer people to use them (and many people holding them to try to sell them for traditional currency).

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#60

Post by the_watcher »

chevreuil wrote: post #48
deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

I'm a bit new to bitcoins, but is it technically possible for the bitcoins community as a whole to make a blacklist of bitcoins addresses and "ban" the stolen bitcoins ? Such blacklist would daunt robbers and enforce public trust in bitcoins.

Well, the supply of BTC is finite, so simply excluding stolen BTC's has some additional problems. May be better than not addressing it, but while BTC provides a mechanism for following them through the transaction chain, it's not that simple to ID what addresses contain "stolen" BTC. What if the thieves are able to launder them through unwitting proxies? For example, steal a bunch of BTC, sell them on another exchange immediately, and now, how do you blacklist those "stolen" bitcoins without screwing over an innocent bystander?
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