Those 500K Bitcoins that caused the flash crash weren't real

Post by MattBearman » Fri, Jul 01, 2011, 7:06 AM UTC

walkon wrote: post #95

walkon wrote: post #62

Earlier quoted context omitted.

True, but I think this has been fixed, assuming their new site is live: "The new Mt. Gox site features SHA-512 multi-iteration, triple salted hashing and soon will have an option for users to enable a withdraw password that will be separate from their login passwords."

Not sure why I'm downvoted, SHA-512 is obviously better than MD5 and we don't know the details. The constant spewing that bcrypt is the only way to hash a password is getting old fast. Ok, whatever, keep downvoting, fuckers.

Post by w1nk » Fri, Jul 01, 2011, 7:22 AM UTC

daeken wrote: post #22

wiredfool wrote: post #17

What this means is that very easily, or even accidentally, MTGox could be running a fractional reserve bank in bitcoin. Balances are just numbers in the database, so there's no cryptographic requirement that they sum up to the actual amount in the dollar and bitcoin escrow accounts/wallets. They can inflate the bitcoin in circulation, and all it takes is enough real bitcoin and cash to cover the withdrawals for no on…

By using floating point values for a user's balances (per-currency) in the DB, they effectively did make themselves a fractional reserve bank, even if the spread was likely small. Most every transaction would've added a tiny bit of an error value -- given enough time, this would've added up pretty considerably.

Post by sunchild » Fri, Jul 01, 2011, 8:18 AM UTC

puredemo wrote: post #54

drivebyacct2 wrote: post #51

Earlier quoted context omitted.

Yeah, when this very first happened, I was in the IRC room at onlyonetv interviewed Mark (via proxy). I kept shouting in IRC to ask them to use bcrypt and was told they were doing 1000xSHA-512. I later tweeted at MagicalTux to recommend bcrypt and was asked if multiple iterations of SHA-512 is good enough. He said that he was told bcrypt was not secure enough. How do these businesses succeed with business people that…

>How do these businesses succeed with business people that have no business wit about them, have NO ability to communicate effectively in these critical situations and have awful taste in technical advice? They take off because they are excellent, useful and timely ideas. Unfortunately, people who have strong, timely ideas, like this one, frequently aren't able to find good technical co-founders, probably because of…

Post by rms » Fri, Jul 01, 2011, 8:19 AM UTC

sunchild wrote: post #105

puredemo wrote: post #54

Earlier quoted context omitted.

>How do these businesses succeed with business people that have no business wit about them, have NO ability to communicate effectively in these critical situations and have awful taste in technical advice? They take off because they are excellent, useful and timely ideas. Unfortunately, people who have strong, timely ideas, like this one, frequently aren't able to find good technical co-founders, probably because of…

It's a shame that they can't be bothered to learn about security, since they're in the business of holding other people's money. It seems that they have killed their amazing opportunity, and deeply harmed the public's confidence in bitcoin at the same time.

Post by roel_v » Fri, Jul 01, 2011, 8:23 AM UTC

stayjin wrote: post #80

Locke1689 wrote: post #71

Earlier quoted context omitted.

I was more referring to the fact that we fail to produce proof of the limited amount of gold that we claim to have and every attempt to audit it is rebuked magically. I think you're just rambling. Our currency isn't gold backed -- who cares how much the US govt. has in gold repositories and why does it need to be checked?

No he isn't. If ( just for the sake of the argument ) RMB replaces USD as the international currency base, US has absolutely nothing to back dollar value and prevent it from dropping.