Bitcoin Forum

PC World Claims Counterfeit Bitcoins

read it for yourself.

http://www.pcworld.com/article/234890/counterfeit_bitcoins_caused_price_crash_exchange_reveals.html#tk.hp_new

mt gox is claiming (or implying) the coins dumped were counterfeit.

true or untrue, this is very serious. 

idk..

mtgox said in their recent release that the coins were simply numbers, but that the coins sent were from wallets... idk.  Somebody smarter than me will surely post in a second or 2.

I don't think counterfeit is a good term.  The hacker allegedly gave himself fake bitcoins and a fake 1 mil USD balance.  If you call the bitcoins counterfeit then you have to also conclude that he counterfeited 1 million USD.

Right, this is the key quote:


Adding money to a bank account isn't counterfeiting.

Nobody actually "created" counterfeit coins, they simply told the database they had a bunch more coins. Mt.Gox's software relies on the database to say how many coins each user has, and relies on it being consistent -- i.e., the total number of coins listed in the database should match what's in the wallet. The attacker broke that consistency -- so they couldn't have, say, withdrawn more coins than Mt.Gox actually had in the wallet.

Right, those "counterfeit" coins could never have made it out of the Mt Gox system.

Hope someone set these idiots straight in their article comments.

Honestly, can't turn around without someone perpetuating some kind of nonsense.

Welcome to the media world!

yes.  set them straight.  leave a comment and email the author.  i did.  you should too.

this rumor, once started, will spread like fire.

Where news reporting equals coming up with your own "facts"

Why is it that every day MtGox's words sound less and less trustworthy to me...?
Strange...

Looking at the "Similar Articles" box it seems over there they mostly just wanna make people think Bitcoin is a bust...

Et Tu, PC World?

well, well.

mr. paul (the author of that pathetic article) appears to have uncovered the only disadvantage to Bitcoin that i've run across, to date.  as a purely decentralized currency - without an owning entity or any responsible party - there's nobody to sue the bastards.

they can say whatever they like about Bitcoin, and there's no existing mechanism (legally, that would be no injured party) to fight with.

"counterfeit" my ass.

If you have realy a little understanding how databases and bitcoins are working and assuming you read this article carefully and understand it you shouldn´t come to the conclusion the author is an idiot.
I am not an expert but in the database are no bitcoins stored. Only numbers that represents an accounts amount of bitcoin. If you "fake" or "counterfeight" this number you just change a number inside a database. The bitcoin block chain was never affected. So sure you can create an "counterfeit" amount of any item/number inside a database. And nothing else was mentioned by the author.

"The hacker was able to create 2 million counterfeit BTC by manipulating the company's trading database ..."

In my opinion from an technical point of view this article claims no false facts and is correct.
The question for me is if it realy was happen in this way. But that makes me not calling the author an "idiot".

Doodz what the hell?

Did anyone actually read MT's press statement?????????????????
cuz this so-called journalist did not.
In fact we need a cease and desist on this idiot, right now.

They said, 2000 bitcoins, where lost by hacker that gained access to old owners account.
Mt Gox is absorbing this cost, and taking the loss.

How the fuck could anyone misinterpret that??????

Could someone do us a favor and remove a journalists head from his own ass??

Good Job PC World, I am now deducting 10 IQ points from each of your readers.
That puts your readers somewhere around bananna...


This is what facebook and twitter does to people.
You lose all your memory and Just Start Making Shit Up!!!!!! HAHAHAHHA

It's not counterfeiting.  It's just fractional reserve banking.  MtGox "loaned out" a million bitcoins that it didn't actually have.   ;)

there are three possibilities:

1) bitcoins were counterfeited
2) the author is intentionally misleading readers with the headline
3) the author is stupid

you decide which of the three is true.

So he takes the time to get the facts right and not be libel, but none the less uses the word counterfeit as the article headline.

Nice hack job.

You can't counterfeit Bitcoin

you're right - nice hack job.

but you're wrong - there's no libel (slander, actually).  nobody has legal standing where Bitcoin are concerned.  it isn't a currency; so you haven't been injured.  there is no company which owns the Bitcoin name... etc.

nobody's been libeled.  nobody's been hurt.

we're kinda screwed where the media is concerned.  they can say whatever they like.

Not possibel, as far as we know at the moment.


I agree. The headline also made me think this article is just another crap but i changed my mind after reading it.


Not after carefully reading and understanding the article. I read much worse articles in the last days about bitcoin. Beside the facts claimed about what happens it seems the author know the technology he is writing about. And therefor i still can't call him an idiot.

If you have little understanding, it should be a hint to do more research and fact checking before writing about it as a reporter.  

Changing the number in the database no more counterfeits bitcoins then a bank printing out an erroneous statement of your account showing more in it counterfeits euros.

You opinion is wrong.   The title is claiming a false fact and is wrong.   The fact you hold this opinion does not change the fact it is wrong nor make the author any more correct,  it just means you are both wrong.   

In this case though,  it may just be the author of the headline,  if could be someone else comes up with the headline then the author, I know that is often the case for newspapers.

Thanks to all of the posters helping to better explain this.

Twobits : exactly... people should know what they're writing about before putting an article out in the wild.

I found this article annoying after the first ~3 paragraphs and then didn't bother.

Have mercy with them. They don't know better.

I have a database which lists all shuttles US launched into the space to date. I've just added a few records to that database. Opps, this was the biggest counterfeiting operation in history of mankind! I've just counterfeighted  a few "space shuttles". While I am at it I perhaps shall put a (counterfeit) man on the Moon too...

Can you send me that so I can update the text books I'm writing? Whew! Just in the knick of time....what if we went to print!!    :P

There. I just counterfeited Vladimir's post. 8)

Here's a dirty little secret for you.

The person who writes headlines is not always the person who writes the stories. (But they get the flak anyway.) There will usually be a few people who write the headlines for every story after skimming them to see what they're about.

Actually, you are completely wrong.

This could very well be slander.  Changing a database to say someone has 2million bitcoins versus "creating 2 million via block chain" are COMPLETELY different.  If the author did not do his research that is his fault.

Anyone has legal standing to sue.  One simply has to prove 1) They were injured 2) Causation.     I definitely think it has merit.

It doesn't really matter if BTC is a currency or not.  It's property, it has value.  If the slander(purposeful or not) lowers the value of our property, that's an injury.

As a recap, they can say whatever they want as long as no one challenges them.

Didn't he also wrote "counterfeit" inside the article body itself?

So.... by his logic... if a hacker break into a social security database, and added non-existing SSN & info. Did he just counterfeit a human being???...  
HUMAN CLONING IS HERE!!!

Creating sensational & eye-catching title at the expense of the truth. He should be ashame.

I simply can agree. And nothing else i claimed. I didn't say that real bitcoins where "counterfeited" inside the block chain.


As i pointed out already in my last post thats also my opinion.


I still stand to my opinion the article is not as bad as you think if you just read the headline and is technical correct (maybe except the term "counterfeit"). Now i am leaving this threat because it seems we only discuss about different meanings of the term "counterfeit".

But other peoples coins could have been pilfered from Mt Gox wallets through the erroneous row..

PC World is a cheap lightweight rag .... nuff said.

Bitcoin surely is flushing out the haters ... lotsa bad karma getting stored up, we gots the new money, they got hate.

An obvious smear campaign which I actually don't mind because it buys me more time to acquire more bitcoin at these prices. :P

perhaps i am wrong.  it would depend on how a court determined the central question of what - if any - value Bitcoin have.

i don't know how that would play out - do you?

i'll tell you what though - it wouldn't be decided on the merits.  i have to think that politics (which always devolves into money: i.e., what does the financial community [i.e.2., those who own the political process] want) would be the deciding factor.

hey!  has anybody figured out how to polarize the political community in re Bitcoin?  it'll happen pretty soon, so we should probably think about that.  which political side of the aisle would be the most advantageous to pursue?  the left or the right?

thoughts?

The author responded.... and agreed to change the term 'counterfeit bitcoins' to ..........  'fake bitcoins'!!!!


Hm..... So there are no such thing as Counterfeit bitcoins, but there are fake bitcoins.... Doesn't sound that much better!

Nah, I wouldn't even go that far.  Since the bitcoins don't even have a fakechain block they can't be fake.  All they are is someone saying they have more then they do.  When it comes time to deliver all they have is air.  They don't exist.  Nada, nothing.

Is there any reason an exchange operator couldn't create an account and sell a bunch of "fake" bitcoins? By "fake" I mean just setting bitcoin_balance in the database to 1,000,000 without actually having any bitcoins. As long as they stayed on the exchange everything would be fine. That is until they didn't have enough "real" bitcoins to cover transfers. I don't believe that's happening, but I'm just trying to convince myself for sure.

This is a clear example of low quality press, pcworld which is supposed to be a technical magazine proves that it is not, it tries to create news that sell at the expense of lying, most low tech readers will believe the article.

There is no such thing as a fake bitcoin, a counterfit bitcoin does not exist, the only way a counterfeit could exist is if someone discovered a flaw in the bitcoin algorithm and up to present time it has not happened, and it is not likely that it will happen since bitcoin has a few years in existance and it is open source.


So to make things clear there are no phony or fake bitcoins, if you have a bitcoin it is the real thing.

What happens is that the database of a bitcoin exchange got compromised, and a thief stole bitcoins, the bitcoins that the thief stole were the real thing, however it appears that he altered the entry on the database for more bitcoins, that does mean a bitcoin  can be fake, since in the wallet is where the bitcoins are actually stored and those are real.

It is just bad press, since the average person will think bitcoins can be fake, when in reality they can not.
The average person will think that the security of the bitcoin protocol has been compromised when in reality it is strong as ever, the only thing that was compromised was the security of the exchange and that has been fixed and improved.

For example if someone writes a check without funds no one in their right mind will say that the dollar has been hacked and it is faked, only the entry in the checkbook is fake not the dollar, same with bitcoin, if a microsoft virus steals your bitcoins it is not the bitcoin protocol that is insecure it is your windows pc.

The article mentions  "the price of the online currency crashed, creating a buying frenzy", not true it was a hacker selling massive amounts of bitcoins and therefore bought the price down at the exchange, the price of bitcoin as a whole remained stabled at other exchanges at around 15 to 17 dollars, the buying frenzy was created when the hacker sold massive amounts of bitcoins, but it was only at the exchange, and it was because of a hacked account. The bitcoin currency never crashed, saying otherwise is misleading.

It is well known that a thief will sell what he/she steals below market price after all it costed him/her 0.

People do not say the dollar crashed because a bank got robbed, why create this nonsence with bitcoin, I got a feeling that the bitcoin got past the step where it was being ignored, now it is being attacked and using low quality press for that, after the bitcoin has a large percent of the market it will no longer be atacked, the same persons that talk bad about bitcoin, they will be saying that they new all along the bitcoin was going to be a great thing.

I used to be a cryptographer, and any good cryptographer will tell you the same thing there are no fake bitcoins. Someone can write an entry in a database saying they have 30 million bitcoins or on a pice of paper, so what those are not bitcoins, in the case of the dollar in can be countefeit, but countefeit for most people means something that looks like the real thing but it is not, not an entry on a database or something very different like the liberty dollar.

When I say the bitcoin can not be fake or phony I am talking in terms of computer science, math, and cryptography, under the law anything is possible some day some legislator could by definition define the bitcoin as counterfeit money, but at the same time on some other country it could be defined as legal tender money, so under the law anything is possible, but not under math, computer science, and cryptography which are sciences clearly and well defined.

By law the liberty dollar is counterfeit money, but using math it is not, the weights are different, the metals are different, a simple computer program or even a 3 years old could clearly see the difference between a quarter and a liberty dollar, but the real reason it was that it was not convenient to the government to have a competing currency.

The enemy of the bitcoins are the bankers, the bad press, and ironically the government.

The good news, once bitcoins survives the period of attacks by bankers, the bad press, and some governments, it will then be highly recognized by everyone, then the banks, the bad press, and the governments will be saying good things about the bitcoin, and its value will skyrocket by then, we will then speak of the milibitcoin.

For those of us that believe in the strength of the bitcoin we will be rewarded later, just like the early adopters have been rewarded already.

did we get to "...then they fight you..." stage already?

You're closing in on the idea that was probably the most significant to the history of banking after the invention of money itself.

Fractional reserve banking.

To the extent that an exchange like MTGOX is being used as a place to just park funds, they are in a position to do that. They have both a cash reserve and a BTC 'reserve.'

For example, they could invest some of the cash deposits and earn interest. Some of their depositors money probably already sits in something like a savings account generating interest for MTGOX. A somewhat more aggressive approach would be buying things like bank CDs with a slightly higher interest rate, which could be sold in a short amount of time if they needed the cash to cover depositors demanding their funds.

They might also explore the idea of making 'Bitcoin loans' but that is probably a bit too ridiculous for them to consider at this moment, given all that would have to be involved in the process for it to work, and that they clearly have their hands full for the time being.

Sort of...

At the very least,  as soon as sites like Wall Street Journal and Forbes were aware of BTC, what the average user here needs to understand is that the very very serious money sharks were aware of BTC.

Some of them were aware before those articles came out, and many many others became aware because of those articles.

Even before the mid-May explosion in interest, if you look at google trends, you see that San Francisco was very hip to BTC. While there is possibly some connection to drugs and prostitution, San Francisco is also a major banking center.

Fighting it? Mayyyybe. Exploiting it? Expect that. This particular PC mag article is probably just some overworked and underpaid content farmer who has a word count to hit and is too overworked and underpaid to give a damn at that detailed a level. The MTGOX attack/hack is more suspicious to me because it happened through their auditor.

I now understand that "auditor" is Jed and somehow his account got compromised either via SQL injection and brute force attack on his password hash or otherwise. At least I think it is what they tried to say (or not to say) in the 'press release'.