Thread: The control of Bitcoin can't come soon enough

Originally Posted by Whip

my bitcoin price -$623.75

pretty easy right?

Not easy at all :) before - there was only a BTC price and volume volatility , now there is cross-exchages volatility added to the mix.

BTC_SWAP.jpg


Because some exchanges got locked and unable to exchange money out, some are geographically restricted who they can have as clients, nobody can hedge and fill this gap.


A BitCoin in mtgox now is not the same as a BitCoin in BitStamp

Mine was more of a joke that it has artificial worth to begin with.

Silk Road heist could doom Bitcoin black markets

The jig may be up for online drug bazaars that accept bitcoins.

Black markets on the Deep Web offer everything: money laundering and a one-stop-shop for illegal drugs and guns. But a recent series of heists, busts and fraud have shown why these bazaars can't be trusted.

In October, the FBI shut down Silk Road, the biggest online black market, seizing $3.5 million of bitcoins in the process. In November, a similar site called Sheep Marketplace was labeled a scam after it lost $6 million in users' bitcoins in an alleged hack. And last week, administrators of a revived Silk Road claimed cyber attackers sucked out all the bitcoins it held in escrow -- valued at $2.7 million.

This latest episode "may mark the death knell for the dark markets," according to Nicholas Weaver, a security researcher at the International Computer Science Institute.

"Between busts, scam-markets, and now mass theft, it is a task that they clearly are incapable of doing," Weaver said.

The heart of the issue is that Bitcoin -- by design -- doesn't work well with shady middlemen. Anyone with access to your digital wallet can empty it forever. And all transactions are irreversible.

That's why it's not smart to fork over bitcoins to an underground website like Silk Road, which stands between buyers and sellers and holds on to money during a deal.

"When you introduce a third party holding on to people's funds, it's absolutely antithetical to the idea of Bitcoin," said Evan Rose, CEO of Bitcoin ATM maker Genesis. "You're giving someone cash over the Internet that you'll never be able to get back."

Silk Road's new administrators said hackers exploited a Bitcoin glitch to steal funds. But in the days since the attack, it's become painfully clear that the Bitcoin system isn't to blame. Only two scenarios exist, says Andreas Antonopoulos an engineer at Bitcoin wallet service Blockchain: Silk Road's leaders were fooled into emptying all their accounts willingly, or they simply swindled their customers themselves.

Those who currently use bitcoins to buy drugs, weapons or hire assassins also have something else to worry about. All transactions leave a permanent record that's traceable to specific wallets. Even though Bitcoins are technically anonymous, if they ever pull that money out in their name at a legitimate Bitcoin bank or exchange, law enforcement has a direct connection to a real identity.

That's why Weaver says bitcoins are essentially "prosecution futures."

Bitcoin tracing experts are already cropping up -- and they're teaming up with law enforcement too. Sarah Meiklejohn is a computer scientist and graduate student at the University of California in San Diego, where she explores how people are spending their bitcoins.

She said people spending bitcoins in black markets don't realize "every bitcoin is by nature a marked bill." And it's not as forgiving as actual cash. If police catch you buying something illegal in person, you get criminal charges for that single act. Bitcoin's permanent, public ledger gives prosecutors a much longer memory.

"if you get caught buying drugs with bitcoins and they look at your transaction history, you get caught on every transaction you've ever made," she said. "It's much more serious."

CNN Money

Originally Posted by littleroundman

Silk Road heist could doom Bitcoin black markets

The jig may be up for online drug bazaars that accept bitcoins.

I can't readily locate an adjective to describe this story, so go with the ole standby interesting...

Dead End on Silk Road: The Fall of Internet Crime Kingpin Ross Ulbricht | Culture News | Rolling Stone

Originally Posted by NikSam

Not easy at all :) before - there was only a BTC price and volume volatility , now there is cross-exchages volatility added to the mix.


nobody can hedge and fill this gap.

This was one of the things I feared would hinder Bitcoin going mainstream as a currency. Pretty hard to take on a multi-year contract if companies can't hedge their currency risk. Presumably if the exchanges were a little more developed speculators could short bitcoin on one exchange and then deliver them when they are able to withdraw on their current exchange. Or accomplish similar with options or futures if there was certainty the writers would stand behind the contracts. Although we have established currency markets where all this occurs every day with a mouse click or a phone call in just a few seconds.

Stickin it to the man, sometimes easier said than done.

One of the proposals of regulating BitCoin from government was introduction of BitCoinLicenses to exchangers (miners would not need one).
Responsibility of an exchanger would be standard KnowYourCustomer rules, and every bitcoin wallet would need a verified name linked to it at exchange level ( and I bet they would require a SS# if it gets moving)
Exchangers will also have to comply to standard AML rules, submit Suspicious Activity Reports, cross-border transactions reports, over the limit reports, red flag destinations reports.
And if BitCoin to be treated as a commodity, exchangers must ensure to provide services only to worthy individuals (something like SEC Regulation D exceptions for accredited investors) because of high risks / volatility.

Basically , BitCoinLicense would be a brother of FinCEN MSB license but including a dealer option in commodities of digital currency.

That is what seems to me the only way to keep it legal, but who would want such a Bitcoin ? :) the whole point of BitCoin is to hide from the governments :)

Originally Posted by NikSam

That is what seems to me the only way to keep it legal, but who would want such a Bitcoin ? :) the whole point of BitCoin is to hide from the governments :)

Makes it fascinating to watch, being part of history.

Without regulated markets I find it hard to believe Bitcoin will be able to break out of the shadows and get "big industry" buy in. As much as people hate the Fed, and regulation seldom do we see a run on the bank these days. Delivery of Corn, Oil, or Silver happens smoothly with 0 counterparty risk, why bother mucking that up?

These panics might create buying opportunities for the bold, or spell ruin. Could go the way of the Tulip, The Mississippi or South Sea companies. Or even something a simple as the WinkleBit Twins getting an exchange traded product could stabilize the markets.


Maybe should chuck these in the books section, history never repeats, but close...

Extraordinary Popular Delusions: Charles Mackay: 9780486432236: Amazon.com: Books

The Panic of 1907: Lessons Learned from the Market's Perfect Storm: Robert F. Bruner, Sean D. Carr: 9780470452585: Amazon.com: Books

Kolin Burges from London flew to Tokyo to find out, face to face, if he could withdraw his bitcoins from Mt Gox.







PART 2: Mt Gox Bitcoin Protest Update 17 Feb 2014 - YouTube

BTC LAST PRICE (MtGox): $169
BTC winkdex: $580

Some upcoming headline news, insider info: MtGox lost 700k BTC due to that bug in the system

Sites/Twitter/ FB/ all their social media went down few hours ago

CEO resigned in advance on Feb 23.

The following document was spotted on scribd:

http://www.scribd.com/doc/209098983/...-No-black-Bars

At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years.
The cold storage has been wiped out due to a leak in the hot wallet.

NY Times article on mtGox collapse:
http://www.nytimes.com/2014/02/25/bu...oin-world.html

Originally Posted by NikSam

NY Times article on mtGox collapse:
http://www.nytimes.com/2014/02/25/bu...oin-world.html

from Wired
Bitcoin Exchange Mt. Gox Goes Offline Amid Allegations of $350 Million Hack | Wired Enterprise | Wired.com

Something new popped up on mtGox site:

mtgox_pff.jpg


According to ComputerWorld
the site spilled the following HTML comment on the page when site first started responding

<!-- put announce for mtgox acq here -->

So, it hinted they trying to follow their plan for possible recovery according to earlier leaked document.



BTC winkdex: $532.03

Hmmmm? This virtual money seems virtually worthless.

Just did a whois on GOX.com domain (as a guess from leaked doc)

And lookie here, on February 24 whois was updated and revealed a new owner:

Code:

Domain Name: GOX.COM
Registry Domain ID: 816800_DOMAIN_COM-VRSN
Registrar WHOIS Server: whois.godaddy.com
Registrar URL: http://www.godaddy.com
Update Date: 2014-02-24 17:29:44
Creation Date: 1997-10-09 23:00:00
Registrar Registration Expiration Date: 2017-10-08 23:00:00
Registrar: GoDaddy.com, LLC
Registrar IANA ID: 146
Registrar Abuse Contact Email: abuse@godaddy.com
Registrar Abuse Contact Phone: +1.480-624-2505
Domain Status: clientTransferProhibited
Domain Status: clientUpdateProhibited
Domain Status: clientRenewProhibited
Domain Status: clientDeleteProhibited
Registry Registrant ID:
Registrant Name: Mark Karpeles
Registrant Organization: MtGox Co.,Ltd.
Registrant Street: Cerulean Tower 15F
Registrant Street: 26-1 Sakuragaoka-cho
Registrant City: Shibuya
Registrant State/Province: Tokyo
Registrant Postal Code: 150-8512
Registrant Country: Japan
Registrant Phone: +81.345206200
Registrant Phone Ext:
Registrant Fax:
Registrant Fax Ext:
Registrant Email: mark@tibanne.com
Registry Admin ID:
Admin Name: Mark Karpeles
Admin Organization: MtGox Co.,Ltd.
Admin Street: Cerulean Tower 15F
Admin Street: 26-1 Sakuragaoka-cho
Admin City: Shibuya
Admin State/Province: Tokyo
Admin Postal Code: 150-8512
Admin Country: Japan
Admin Phone: +81.345206200
Admin Phone Ext:
Admin Fax:
Admin Fax Ext:
Admin Email: mark@tibanne.com
Registry Tech ID:
Tech Name: Mark Karpeles
Tech Organization: MtGox Co.,Ltd.
Tech Street: Cerulean Tower 15F
Tech Street: 26-1 Sakuragaoka-cho
Tech City: Shibuya
Tech State/Province: Tokyo
Tech Postal Code: 150-8512
Tech Country: Japan
Tech Phone: +81.345206200
Tech Phone Ext:
Tech Fax:
Tech Fax Ext:
Tech Email: mark@tibanne.com
Name Server: NS-1009.AWSDNS-62.NET
Name Server: NS-345.AWSDNS-43.COM
Name Server: NS-1173.AWSDNS-18.ORG
Name Server: NS-1637.AWSDNS-12.CO.UK
DNSSEC: unsigned

And opening gox.com in a browser redirects to mtgox.com
So, here is a new planned home of mtGox which was mentioned in their leaked recovery plan.

I wonder how much did they pay to the past domain owner.

MtGox files for Bankruptcy:
MtGox Files For Bankruptcy, Nearly $500M Of Bitcoins Lost : The Two-Way : NPR


Japanese authorities are investigating MtGox:
http://www.telegraph.co.uk/finance/c...nge-MtGox.html

MtGox has been subpoenaed by federal investigators in the United States:
http://rt.com/usa/bitcoin-subpoena-mtgox-karpeles-894/

Nik, what is your understanding of how the hacked bitcoins can be recirculated? I thought that the Block Chain acted as sort of a governor to protect against fraudulent transactions.

You can read about it here: https://en.bitcoin.it/wiki/Transaction_Malleability

I never actually diged too deep to try to understand it, but was planning to research and produce a fake transaction and see for how long it will survive in the system.


Something like: to validate if a arrived bitcon is actually not fake, takes time, for full validation might take up to 20 mins (and that time grows with more bitcoins being mined), that is why bitcoins are unsuitable to be on the spot payment (stores/immediate downloads/etc) but most people do not know that, because it was never exploited before, but was a known flaw since the beginning.

Kind of a century old trick, when you pay with a check signed by disappearing ink.

MtGox did not use a standard bitcoin software but used in–house written one by Jeb McCaleb (original owner of MtGox, Opencoin/Ripple labs), as by his words standard software was not able to keep up with the amount of transactions they needed to.
It is hard to say what really happen, maybe there was a backdoor, maybe Malleability was exploited, maybe a theft they trying to cover up, or we will never know.


Or more simple,
a) if you can trick the software that money came, but really did not, and transaction was invalidated later.
b) if you can trick the software after sending money that transaction failed and you try re-sending it, not realizing till later you paid twice.




PS: When i see some grocery-store mentioned in news which takes bitcoins, I think to myself "Great, when i figure it out I'll come and buy everything in there "

PPS: and another trick, called Double-Spending: https://en.bitcoin.it/wiki/How_bitco...ouble_spending

Tokyo MtGox Bitcoin exchange files for bankruptcy

THE troubled MtGox Bitcoin exchange has filed for bankruptcy protection in Japan, with its chief executive saying it had lost nearly half a billion dollars worth of the digital currency in a possible theft.

Mark Karpeles, who has not been seen in public for several days, re-emerged to tell a press conference that his firm’s digital vaults had been almost completely emptied.

“We have lost Bitcoins due to weaknesses in the system,’’ French-born Karpeles said in Japanese.

“We are really sorry for causing trouble to all the people concerned,’’ he said, before bowing deeply.

The company’s lawyer said 750,000 Bitcoins belonging to customers had gone, along with MtGox’s own store of the currency, which she said was around 100,000 units.

That number of Bitcoins would be worth around $US477 million ($533 million).

Karpeles said MtGox had liabilities of 6.5 billion yen ($71 million) and that around a million users had been affected when hackers broke into the exchange in early February.

The global virtual currency community was shaken this week by the shuttering of MtGox, which had frozen withdrawals earlier this month because of what the firm said was a bug in the software underpinning Bitcoin that allowed hackers to pilfer them.

Supporters rallied round, insisting that the Bitcoin itself is sound and the problems lay with MtGox, which they said was badly-managed and unable to cope with the burgeoning popularity of the young currency.

Kolin Burges, an investor who has kept vigil outside the Tokyo offices of MtGox for several weeks, said on Twitter that he would be packing up.

“Karpeles in Tokyo says MtGox is bankrupt. 750,000 customer bitcoins stolen & 120,000 company bitcoins stolen. None left,’’ he tweeted.

He later added: “Packed up enmtgoxprotest for the last time and did leaving interview with Asahi TV. It’s been a wild ride!’’

The admission that such a huge amount of the crypto-currency has disappeared could add to calls for regulation of an industry that has taken regulators and bankers by surprise.

Japan’s finance minister said he had always thought Bitcoin was suspect and said the country might take action following the MtGox debacle.

Taro Aso’s comments came as Vietnam said it was banning banks from using the unit and after chief US central banker Janet Yellen said the Federal Reserve had no powers to control it.

Aso, who also serves as deputy prime minister, said he had foreseen difficulties for the crypto-currency, which is generated by complex chains of interaction among a huge network of computers around the planet.

“I was thinking that this sort of thing won’t last long,’’ said Aso, 73. “I was thinking it would collapse sometime.’’

“Japan is overwhelmingly advanced in this field. In this sense, I was thinking since before that we might face a situation where Japan has to act, but I’d say it came earlier than I thought.’’

His comments come after Yellen told a Senate hearing that banks under the Fed’s regulatory purview were not involved with Bitcoin, and so it had no powers in the matter.

“This is a payment innovation that is taking place entirely outside of the banking industry,’’ she said.

“The Fed doesn’t have authority with respect to Bitcoin.’’

Yellen pointed to other US regulators, including the Treasury, watching the Bitcoin sector for potential money laundering and other criminal uses of the digital currency.

However, she stressed, “it’s not so easy to regulate Bitcoin’’ because it is used outside the banking system, and has no centralised authority behind, as do regular fiat currencies.

Vietnam banned its banks from handling Bitcoin, with the State Bank of Vietnam cautioning: “The ownership, trading and use of Bitcoin and other virtual money as an asset carries potential risks for users.’’

The Tokyo District Court accepted the application from MtGox, Jiji Press and public broadcaster NHK said.

The action was taken after US prosecutors reportedly served a subpoena on the company.

The website of Tokyo-based MtGox went dark on Tuesday, possibly heralding huge losses for investors, and sending ripples of alarm throughout the global community of digital currency adopters.

MtGox froze withdrawals earlier this month, claiming there was a bug in the software that underpins Bitcoin, making it vulnerable to thieves.

The value of the volatile unit plunged on the Tokyo exchange and was hovering around $US130 ($145) on Tuesday, just quarter of what it was fetching on other platforms, until the site suddenly disappeared at lunchtime.

YAHOO NEWS

Press chases alleged Bitcoin creator through Los Angeles | The Verge

Satoshi doxed :http://mag.newsweek.com/2014/03/14/b...-nakamoto.html

To me still seems dumb for media to search for a creator of Bitcoin, This guy denied he is involved,
all they got is the old name he used is of alleged/fictional "Satoshi Nakamoto" and one of developers "thinking" it is him.
Also his lifestyle does not look like he has millions BTC the creator had before sharing BitCoin with the world.

Also this guy was never noticed in any cryptologists or cipherpunks circles .

Stupid media made a nightmare of a regualr guy's life

A hackers group posted some data from the stolen mtGox database,
And alleges that the theft of Bitcoins at mtGox did not happen but Mark Karpeles looted it himself.

Hackers also said they have entire mtGox users database and scans of user's passports, which they do not intend to release.

MtGox bitcoin database leaked online as hackers crowdsource clues | Technology | theguardian.com
Hackers allege Mt. Gox CEO still controls 'stolen' Bitcoin



stolen Source code of mtGox site also leaked:

Mt.Gox Source code leaked by Russian hacker 'Nanashi' on Pastebin | TechWorm

Yahoo!

why people never listen to me? :)

Dorian Satoshi Nakamoto Denies All Bitcoin Ties In Verified Letter Via Lawyer



Full story: Dorian Satoshi Nakamoto Denies All Bitcoin Ties In Verified Letter Via Lawyer | TechCrunch

Came across an exchange which was new to me when I wondered if KennyBoy Russo was posting anything in PalsCafe. He seems to be trying to keep a low profile over there.

Anybody heard of Virtapay?

Originally Posted by path2prosperity

Came across an exchange which was new to me when I wondered if KennyBoy Russo was posting anything in PalsCafe. He seems to be trying to keep a low profile over there.

Anybody heard of Virtapay?

yeap, it is a processor or more correctly just a virtual currency (not an exchange), its been around for about 2 years i think, closed-end, no exchangers to the other currencies exist,
New accounts get some free virtapay currency which grows % inside everyday :)
for referring more users also some currency is paid,
users can send currency to each other with no reversals.

So hypothetically could be used as a payment method or exchanged if users somehow privately agree to exchange other currencies for sending virtapay inside.
It is not popular, and was a failure because of that.

Also there are a lot of people in it with huge balances (which grew out of thin air), any opening to the cross-exchange with other currencies will more likely devalue it to nothing