BitCoin problems are much bigger than we were told

mmissinglink

mmissinglink

Active Member
As I have stated in the SS forum some time back and as others have warned, BitCoin is a very problematic accounting system. In all liklihood, there are backdoors in this system that are waiting to be exploited if not already have been. This article paints a much rosier picture than I would but still warns those not yet suckered into this speculative rigged casino game: http://www.newyorker.com/online/blo...itcoin-falls-victim-to-galbraiths-bezzle.html
 
Empty Gox was acting as a bank but it was a one guy operation and that guy did not have the programming skill to create a scale-able exchange let alone a secure one.
People gave him their money and he lost it. There where no backdoors in bitcoin itself and no other exchanges lost peoples funds.

The funds where lost as a result of making the exchange re-crediting peoples accounts if it could not find a hash of the unconfirmed transaction rather than checking for the actual transaction itself in the public ledger. There is a property of the signatures used to prove ownership of a bitcoin address called transaction malleability. What it means is that a digital signature can be modified without invalidating it. It is still a signature of the same data (its the same transaction) but the value is different: sort of like if I signed my name on a piece of plastic and someone stretched the plastic a little: still the same signature and does not allow forgery but it just looks slightly different. This property exists because the cryptography used was not designed for currency but for verification of documents (it is far more secure than signing your name because the signature id dependent on the content of the document and becomes invalid if the document changes)

Anyway to deal with this you just look for the transaction itself (the right inputs and outputs) then check to see if its signed rather than looking for a hash of the transaction itself which only becomes permanent in value once its accepted into the block chain (public ledger). What you don't do is automatically refund people their bitcoin like a vending machine with a stuck chip packet.

I think the issues with Empty Gox go way beyond transaction malleability. Its one thing to not notice a few double withdrawals here and there. Its a completely different thing to lose every last cent and every last bitcoin on your exchange while at the same time reassuring your customers that you have physically isolated your funds (ie you have to manually transfer BTC that are kept in reserve when the funds on the exchange run low)
 
mmissinglink said:
In all liklihood, there are backdoors in this system that are waiting to be exploited if not already have been.
Click to expand...

So has the Internet but everybody uses it and entire businesses and fortunes have been built on it.
 
mmissinglink said:
As I have stated in the SS forum some time back and as others have warned, BitCoin is a very problematic accounting system. In all liklihood, there are backdoors in this system that are waiting to be exploited if not already have been. This article paints a much rosier picture than I would but still warns those not yet suckered into this speculative rigged casino game: http://www.newyorker.com/online/blo...itcoin-falls-victim-to-galbraiths-bezzle.html
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If there are back doors in Bitcoin, Why are massive amounts of Bitcoin still sitting in wallets all across the Blockchain?
 
Emanance said:
If there are back doors in Bitcoin, Why are massive amounts of Bitcoin still sitting in wallets all across the Blockchain?
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look again... And it's GONE!
 
leo25 said:
Emanance said:
If there are back doors in Bitcoin, Why are massive amounts of Bitcoin still sitting in wallets all across the Blockchain?
Click to expand...

look again... And it's GONE!
Click to expand...

But it's not gone. It's all there. apart from when its moving around the blockchain like teleportable gold.
 
The reason why the BC backdoors and faulty BC programming have not YET become widespread is because that knowledge is not yet widespread. It's like asking when Rubik's Cube first was introduced, "why aren't kids all over the world solving the Cube in under 30 seconds?" Duh. Because the algorithms weren't figured out in the earliest stages.

It's not because the BC programming isn't vulnerable and doesn't have backdoors, it's because those things haven't been figured out yet on a wide scale. That's the reason why there isn't yet wide scale theft and other very serious problems seen with BC.



.
 
is this the same as luddites burning the new fangled machines they didnt understand?
 
mmissinglink said:
As I have stated in the SS forum some time back and as others have warned, BitCoin is a very problematic accounting system. In all liklihood, there are backdoors in this system that are waiting to be exploited if not already have been. This article paints a much rosier picture than I would but still warns those not yet suckered into this speculative rigged casino game: http://www.newyorker.com/online/blo...itcoin-falls-victim-to-galbraiths-bezzle.html
Click to expand...


lol haters gonna hate
 
Court Jester said:
mmissinglink said:
As I have stated in the SS forum some time back and as others have warned, BitCoin is a very problematic accounting system. In all liklihood, there are backdoors in this system that are waiting to be exploited if not already have been. This article paints a much rosier picture than I would but still warns those not yet suckered into this speculative rigged casino game: http://www.newyorker.com/online/blo...itcoin-falls-victim-to-galbraiths-bezzle.html
Click to expand...


lol haters gonna hate
Click to expand...

I don't think it's hate.

I think there's many good points associated with crypto currencies but as we have seen lots of folk have lost a lot of money.

There's folk who have been concerned that all is not well with exchanges like Mt Gox and although many thought Bitcoin was safe there's a lot of trust lost when the owners of Bitcoin have to get "verified" and in many cases provide personal documents so that they can withdraw their funds.

As we have seen with Mt Gox, it's not the coin but the exchange that is crook.

Even the CEO of Mt Gox warned back in 2013 that Bitcoin was highly speculative and of course on the Mt Gox site there was a lot of information regarding limitations of how much could be withdrawn and the lengthy time period for withdrawals.

I think...many folk didn't read the fine print on Mt. Gox site and...they traded before becoming verified.

It may be proactive to ensure that if a person wants to dabble in Bitcoin or other crypto currencies to "fully" read the policies of the exchange and of course all the fine print.

Lets not forget that this site is here for all to learn...some of us who don't partake in crypto currencies have been lucky to gain knowledge at the expense of some of our fellow stackers. :|

Some made money...some are hurting and we should not be nasty to folk who may have over-looked a few points in their enthusiasm for coins during the run-up of the very high prices.

Best to all.

H
 
I've never commented on Bitcoin for several reasons, but today I will.

Having grown up with computers and the Internet in a big way I can say with 100% conviction BC and its cohorts are doomed.

It's very surprising to see so many people take to such an ideal, especially members of this forum.
It's flimsy, intangible and shows very little integrity.
It's a speculative currency, a mineable oxymoron.

Good luck with it, because you'll need it.
 
FrameBreaking-1812.jpg

Source:
 
Holdfast said:
It may be proactive to ensure that if a person wants to dabble in Bitcoin or other crypto currencies to "fully" read the policies of the exchange and of course all the fine print.
Click to expand...

If there are any that is. :lol:


Cryptsy and coinex don't seem to have any and I prefer it that way because it's actually transparent.
You open an account with a username, password and email address. No ID.

So you know up front those sites promise nothing and could disappear tomorrow and you act accordingly.
 
Court Jester said:
lol haters gonna hate
Click to expand...
Pretty much.

These people sprout up whenever there's negativity around Bitcoin in the media.

But when Bitcoin is going up and in a positive light - they're nowhere to be seen.
 
I think the biggest issue facing Bitcoin right now is the loss of faith - kind of like how peoples' faith in silver was shaken when the price collapsed from $49 USD. That was a wakeup call - internet pundits spruiking silver twelve ways to heaven, and people lose up to half of their investment capital in what was supposed to be "the biggest wealth transfer in history" - just transferred AWAY from them, not to them. With huge amounts of investment capital effectively vaporised through the egregrious ineptitude of MtGox's technology and accounting incompentence ("say, how about we run a billion dollar exchange and never do an audit"), there's not going to be much appetite for new funds to flow into bitcoins for the price to rise from here for a while. I think we're going to be facing a period of stagnant prices while the bitcoin trading environment rebuilds and for investor confidence to return.

I'm still a proponent of Bitcoin as a technology - a decentralised currency that allows people to transact without banks - but with cowboys on the scene like MtGox it's going to result in regulation. The days of it being an anonymous currency for buying drugs online are over - which is a good thing - but the silver lining here is that a period of stagnant prices free of the wild bubble behaviour is perhaps exactly what Bitcoin needs to fulfill the long term mission - a stable unit of value useful on a wide scale as the currency of the internet age.

It's funny how the lure of returns compromises ideology. Gold bugs scream for a gold standard and sound money - but that would end the use of gold as an investment, because sound money requires fixing the price of gold! Same for bitcoins - everyone wants to buy bitcoins and watch them go up tenfold (yay for those of us for which it did), but it's future as a usable currency is brushed aside because everyone wants it to act like Sydney foreshore real estate.
 
goldpelican said:
I'm still a proponent of Bitcoin as a technology - a decentralised currency that allows people to transact without banks - but with cowboys on the scene like MtGox it's going to result in regulation.
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The world is full of awesome technology that lies forgotten or underused because the ancillary services to support it suck.

Transfer of funds over a decentralised network is a new take on old technology. The tech was cool even back when people were using it for other applications, but the fundamental problem is that it's put forth for public consumption by geeks with the kind of zeal you see in religious fundamentalists. Sure, the user interface sucks ("Needs work. In the mean time, just enter "--d /doapp rz [uid],[tx],[yourIPaddress]:[port]" into the command line. Easy as pie and feel free to contribute some code if you'd like to see it improved") but it will totally change the world once more people start using it!

Geeks are, typically, very bad at creating things that "normal" people can use because their knowledge and skill means they don't use them the way "normal" people do. That's fine when it's programming a hobbyist's chip for a remote control helicopter, but when the product you're selling potentially represents people's life savings there's a legitimate case for regulation to stop enthusiastic geeks excusing the shortcomings that exist for those "normal" people trying to use the technology.

Maybe self-regulation or community regulation will be sufficient. I've got no idea WTF the Bitcoin Foundation is supposed to be doing but it's certainly not laying down a "best practices" process so that exchanges can say "yes, we actually reconcile our accounts on a regular basis" *cough* Mt. Gox *cough* so maybe they're just going to remain a typical geek club that exists solely to tell everyone that the technology is totally fine and that it was just somebody's poor implementation of it that wiped out half a billion dollars worth of people's money.

Stagnant prices aren't a "good thing" (or a "bad thing") - they simply represent a failure of the BitCoin proponents to deliver on their promises of a secure, usable form of currency. Saying "Oh, the currency itself is fine, but you've only got a 50-50 chance of being able to use it without getting f**ked over by somebody" is a problem with the currency because those circumstances don't exist with many other currencies and payment methods.

Maybe banks are selling their services for too high a price at the moment and maybe those prices will come down, but a good middleman is worth paying for because they make a lot of problems go away.
 
trew said:
Holdfast said:
It may be proactive to ensure that if a person wants to dabble in Bitcoin or other crypto currencies to "fully" read the policies of the exchange and of course all the fine print.
Click to expand...

If there are any that is. :lol:


Cryptsy and coinex don't seem to have any and I prefer it that way because it's actually transparent.
You open an account with a username, password and email address. No ID.

So you know up front those sites promise nothing and could disappear tomorrow and you act accordingly.
Click to expand...

coinEX

Small print! :D

Trading

How do i buy/sell coins at CoinEX?
There seems to be a stuck order in orderbook
i cant place a sell/buy order
Can i deposit USD, EUR, ... ?

Other CoinEX related topics

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I registered at CoinEX and cannot chat
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I get error 533 when i try to withdraw
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Mining

How do i setup cgminer to mine scrypt coins on coinEX pools?
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I am mining but i get no accepted shares and no rewards
Some basics about SHA and scrypt
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https://coinex.zendesk.com/hc/en-us


Cheers ;) :)

H
 
These are some of the restrictions on the MT Gox web site prior to it closing.

The "Small print".

MtGoxWithdrawalsandDepositsWITHDRAWALSHello_zpsbf3ae8e5.png
 
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