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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?

#111

Post by dragonwriter »

nickmolnar2 wrote: post #91

Wouldn't the sheer number of coins involved make tumbling services almost useless. What is the volume that a single tumbler gets per day? If you put in tens of thousands of coins, and there are only a few dozen coins in the Tumblr that day, your coins are going to be most of what comes back.

> Wouldn't the sheer number of coins involved make tumbling services almost useless.

Sure, if they were all stolen and tumbled at once. The descriptions of a cold storage "leak" suggest that if the loss was due to theft, it was a gradual over an extended period.

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

#112

Post by oijaf888 »

kordless wrote: post #89
mtlolx wrote: post #43

Earlier quoted context omitted.

This is an unusually silly conspiracy theory. I find it extremely unlikely that MtGox would falsely claim that they suffered a theft due to transaction malleability (a real point of possible error) if the actual issue was a US Government seizure. It just strikes me as utterly unbelievable that they would actively cover up (rather than simply failing to disclose) a government seizure. It's far, far more likely that Ka…

You can't disclose if you are under a gag order. If Mark was running a fractional reserve because the coins were seized, and they got hit with the transaction mailability issue, that could set the stage for what we're seeing today. I agree Occam's Razor applies here. That said, we still don't know a lot about what happened.

Would a gag order from a US court apply to a Frenchman in Japan?

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

#113

Post by IanCal »

jackgavigan wrote: post #58
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.

Having somewhere in the region of half a billion dollars in a single wallet would feel very dangerous to me, certainly.

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

#114

Post by jarek »

dirktheman wrote: post #14

Somewhere in the blockchain, probably divided into smaller chunks. The way Bitcoin is set up, you can follow transactions, but it's very hard to track buyers/sellers. It's a paradox: Bitcoin's strength is that it's untraceable and unregulated, but in cases like this those exact strengths are pitfalls at the same time.

That is not a paradox at all. Bitcoin as a system is performing exactly as designed here (barring possible wibbly wobbly "malleability" bugs).

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

#115

Post by Spooky23 »

Bootvis wrote: post #102
chevreuil wrote: post #48

Earlier quoted context omitted.

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.

But what if I steal a Bitcoin and exchange it directly to USD. If the coin is banned later my counterparty, who acted in good faith, is left with an empty bag.

In that case, it's like any other stolen good. If you accept stolen property, you don't hold title to it, whether or not your intentions were honest.

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

#116

Post by wpietri »

corresation wrote: post #86

To reply to a recurring line of thought, Bitcoins are not atomic entities with serial numbers like dollar bills. You can't say "Bitcoin #AE472b was stolen" and then trace it through its life, or blacklist it. Instead Bitcoin is a ledger that details wallets and accounts. The origin of balances came from mining, and then people made transactions that, on the official ledger, transferred some or all of those amounts to…

In this particular case, are tumblers viable? If I understand rightly, the stolen coins here are a significant percentage of the amount of bitcoins outstanding.

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

#117

Post by enraged_camel »

jackgavigan wrote: post #58
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.

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

I'm pretty sure the opposite is also true though, as in "don't split all your eggs among thousands of little baskets." I mean, at some point the overhead of managing all of those wallets must outweigh the risk of having everything in one wallet, right?

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

#118

Post by corresation »

wpietri wrote: post #116
corresation wrote: post #86

To reply to a recurring line of thought, Bitcoins are not atomic entities with serial numbers like dollar bills. You can't say "Bitcoin #AE472b was stolen" and then trace it through its life, or blacklist it. Instead Bitcoin is a ledger that details wallets and accounts. The origin of balances came from mining, and then people made transactions that, on the official ledger, transferred some or all of those amounts to…

In this particular case, are tumblers viable? If I understand rightly, the stolen coins here are a significant percentage of the amount of bitcoins outstanding.

Supposedly this looting went on for years, death by a thousand transfers. It will have dissolved into the sea by now.

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

#119

Post by alexeisadeski3 »

gcb0 wrote: post #19
hartator wrote: post #8

Earlier quoted context omitted.

I wouldn't be that pessismistic. If people manage to identify people behind the blockchains, I strongly suppose that law enforcements, depending on countries where the theift physically is, can force the thieft to give it back without any modifications to existing laws. I think we can catch him when he is going to want to laundry his bitcoins.

Expect Reddit and 4Chan to spend weeks tracking the wrong transactions and the finally identifying a poor sap whose only fault was once buying coins from mtgox years ago. Which is not much different than being audited by the irs...

At least Reddit and 4Chan can't haul you off to prison nor freeze your bank accounts.

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

#120

Post by ronaldx »

deweller wrote: post #61
chevreuil wrote: post #48

Earlier quoted context omitted.

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.

Others have proposed such measure. And it sounds like a good thing on its face. The problem is that who then decides which coins are "bad"? Does the US Government get to decide? How about coins that fund organizations that the US Government doesn't care for? My personal opinion is that no bitcoin should ever be tagged as better or worse than any other one. By messing with the fungibility of the currency, we would do…

In principle everybody can decide for themselves which bitcoin they are willing to accept (there's no need for a central authority to do this).

If enough participants agree that bitcoin from a certain source are 'tainted', they become less valuable (similar to what we have seen at the Mt Gox exchange).

Bitcoin are very clearly distinguishable and thus there's no reason for them to be long-term fungible.

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