Ask HN: Where are the 750k Bitcoins lost by Mt. Gox? • Hacker News Board

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

#161

Post by danudey » Fri, Feb 28, 2014, 8:56 PM UTC

junto wrote: post #159

Whilst the numbers quoted in US dollar terms are quite staggering, I would be interested to know what the actual losses are based on the initial investment dollar amount. I'm guessing many of these coins were mined or bought before the astronomical price rises. Of course I understand that that is irrelevant to people who have perceived millions of USD, but interesting nevertheless.

This is an interesting point. This value is all speculative until the it's resolved by conversion to another currency. The entirety of my LTC holdings are from mining coins, trading out to USD before it dropped, then 'buying' in again. I ended up with around five hundred bucks worth, mostly due to just smart trading, costing me nothing.

The value has recently dropped, and I'm sad that I didn't cash out before, but I didn't actually lose anything. I'm still up the entire value of my portfolio, I'm just not up as much as I was before (and could have cashed out at).

I do feel bad for the people who bought in and then lost it all.

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

#162

Post by marincounty » Fri, Feb 28, 2014, 8:57 PM UTC

galvin wrote: post #147

jneal wrote: post #133

Earlier quoted context omitted.

This is no different from real life scenarios. Suppose someone stole a $5000 ring, sold it for $2500. The ring is still stolen, the police can and will confiscate the ring, so the buyer is out of the $5000 ring and their $2500 paid for the stolen property. The ring is stolen from the owner, the money is stolen from the buyer.

If the police confiscate the ring they will return it to the original owner, they don't just keep it.

Yea--keep the loot; won't bother to retrieve stolen bikes at flea markets; cruise the streets looking for marginal DUI's; always handing out tickets for marginal infractions. I look at them as Tax Collectors. For protection, I would have more luck printing out a Physibe gun.

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

#163

Post by loceng » Fri, Feb 28, 2014, 8:59 PM UTC

kordless wrote: post #80

loceng wrote: post #21

Earlier quoted context omitted.

This is the issue. It can become a never-ending wild-goose chase. The thieves can continue to move the funds around until they're no longer tracked, or far enough ahead that from the trackers (assuming there's any enforcement or penalties or laws relating to accepting stolen Bitcoin - which there aren't currently) or just spend them if they're not being tracked or if there's no enforcement in place. The thieves will…

Eventually all addresses will contain coin from all other addresses, if they are spent. It's the Kevin Bacon rating for currency. In the short term, referencing Blockchain transaction over a given period of time, a destination address could be assigned a lower karma value for having a relationship with a bad actor address. The karma could be measured in amounts taken from other bad karma addresses. While your wallet…

"Bad coin" diluted into legitimate users just means the people who were thieves got away with spending the money. That's bad.

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

#164

Post by lugg » Fri, Feb 28, 2014, 9:04 PM UTC

the_watcher wrote: post #60

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.

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 exchang…

I'm pretty sure your logic is flawed. Someone is already screwed, its sort of why police can confiscate stolen goods even if you paid for them.

I'd like to know if it would be feasible to regulate in someway to claim ownership of said coins and have them returned should they turn up in some sort of regulated clearing house / exchange. Caveat: I know this is in no way possible right now, yet as soon as this block chain gets large enough we are going to have some form of centralization going on, and with that I am certain it will be regulated in some way eventually. That is, if it lasts that long.

What exactly is the plan to deal with a multi terabyte block chain anyways?

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

#165

Post by thesimpsons1022 » Fri, Feb 28, 2014, 9:29 PM UTC

Atroxide wrote: post #155

JTon wrote: post #139

Earlier quoted context omitted.

I wouldn't want to be the guy tracing and debugging that process. Not saying it can't be done, but the extra complexity might do more harm than good

I am pretty sure the extra complexity would still outweigh the benefit of losing 500k bc at one time.

its easy to say that in hindsight :D

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

#166

Post by Carltonian » Fri, Feb 28, 2014, 9:38 PM UTC

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.

This seems like the best way to go about it. Use statistical analysis to find similarities between wallets involved in transactions stemming from the root. When you can give a qualitative "Here's where these coins are going", you can start to identify the culprit. Since there doesn't seem to be a legal framework to prosecute such theft anyway, I'd really just want to find them to congratulate them. Sorry to anybody who lost their coins :(

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

#167

Post by Carltonian » Fri, Feb 28, 2014, 9:39 PM UTC

stef25 wrote: post #55

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?

That's the 750k Bitcoin question.

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

#168

Post by elif » Fri, Feb 28, 2014, 9:52 PM UTC

Instead of a blacklist which is tantamount to centralized regulation, there can be a concerted effort by the community to publicly shame people using these coins, or tumblers, merchants, services, etc. which accept them.

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

#169

Post by TophWells » Fri, Feb 28, 2014, 9:59 PM UTC

azinman2 wrote: post #152

the_watcher wrote: post #60

Earlier quoted context omitted.

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 exchang…

Are coins able to be differentiated from a wallet?

Sometimes, yes. Not always - it depends on how the transactions inside the wallet are organised, which is not usually displayed unless you go looking for it.

Not that it matters - if 100BTC go into a wallet, and an hour later 100BTC comes out of that wallet, it's fairly irrelevant whether or not they're the same coins.

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

#170

Post by davidrudder » Fri, Feb 28, 2014, 10:00 PM UTC

enraged_camel wrote: post #117

jackgavigan wrote: post #58

Earlier quoted context omitted.

> 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?

I should invest in baskets.