Bitcoin Forum

So MagicalTux and his lawyer confirmed that some cracker gained illegal access to their systems and stole 850k coins, don't ask me how that is possible...

Since many old bitcoins are most probably unspendable, what real percentage of bitcoin's market cap is now owned by a shady cracker? I would say something between 10% and 20%, which means that now one person with no moral values could destroy the economy at any moment.

I'm really worried. I saw a lot of bad things over the last 4 years but nothing like this.

Bitcoin as a technology is still amazing, but the economical impact of one bad guy owning a loooot of coins is pretty scary  :(

It really all depends on when the coins were stolen. If it truly happened back in 2011, it may very well have been one person. If it happened with the recent tx malleability issue, it had to be a group effort.

The thing that worries me more is if the US government actually has those coins from Gox (If they seized the coins under the premises of money laundering/drug sales from darknet). Gox coins + darknet coins would equal the US government holding ~10% of all minted coins. This is devastating if true.

crackers and governments and shit having 850k coins

my reaction to these threads https://www.youtube.com/watch?v=HS7cMrIxghg

I'm going to ask. How?

If the coins were stolen a while ago like back in 2011 then I doubt its any bad for us now.

If all the coins went missing now and someone is still sitting on them then it could be the death blow to bitcoin.

How does a hacker seal coins in cold storage ... they don't. 

I am assuming that those bitcoins were stolen from their "cold storage" a few weeks ago, iirc gmaxwell said that they automatically send coins from their "cold storage" to their hot wallets when their hot wallets were empty :-[

Then they need a refresher course on the meaning of cold storage. That is deplorable if true.

The thread title sounds a little racist  :-\

??? sorry I am not sure if you are trolling, why "racist"? (english is not my first language, obviously)

Sorry! More of a joke than a troll...

In 'murica, a cracker is a derogatory name for a white person. I thought you were referring to Mark :))

Carry on!

oh i see, no worries :)

He is referring to the term cracker. It's a slang for white people that dates back to the days of slavery. The white plantation owners would punish the black slaves with whips if they felt they did something wrong. They became known as whipcrackers, which over the years was shortened to cracker.

automatic and cold storage can't be used in the same sentence unless you have some sort of semi-aware robot involved.

That really is mind-boggling...

If the coins were scammed in 2011, then they probably have been already absorbed by the market.

If they were scammed in 2014, then a shitload of them is going to hit the remaining exchanges.
Assuming Bitstamp is now the leading exchange for good, and there are about 20k coins on the ask side,
if a significant number (let's say only 100k) of scammed (and tumbled) coins would show up there,
the price could enter a death spiral similar to the one seen on MtGox before shutting down.
Considering Bitstamp has added to their KYC questions this one: 'What is the origin of the deposited Bitcoins?',
they probably suspect some of the scammed MtGox coins were already sold there.

I think people are skipping over the implications of this.

If one single persons owns 6% of the money supply and closer to 8-9% with the current number of btc in circulation it is a terrible thing.

Nobody seems to be addressing this point. Somebody tried to answer with "well Satoshi has that many coins". Well yeah but he didnt steal them did he.

I mean imagine if btc went to 10k the real world spending power of that criminal would be insane. Far more than any cartels or other gangs have so that should be deeply concerning.

Satoshi would never try to destroy Bitcoin, nor "criminals" from the onionland, but a cracker?...
The person who stole 850k don't give a shit about Bitcoin, this person don't have ideals, this person only cares about money.

back to the "cold storage" thing, I am not sure if this is real but:

http://pastebin.com/DaSph9uT (http://pastebin.com/DaSph9uT)

Hoverer, the cracker still suffer from the same market mechanisms as your standard whale. If he floods the market with 850 k he will in effect kill the golden goose, making all his coins worth zero. Unless he wants to destroy bitcoin what would be the point of that?

What is the liquidity of all the current markets?

That is how much his short term profits are... And that might be sufficient for one person to live nicely for a while...

Going to keep some very low orders on the exchange in case this person ever decides to dump.  :D

Why would they care if some were already sold? Seems more of a CYA move.

Be creative: there is no enough demand in the world for 850,000btc, you wouldn't drop it all in the open market obviously (nor otc). But you could talk with JPMorgan or some other entity who hates Bitcoin and tell them that you would drop it all for X million. And also, you also get some powerful contacts for the rest of your life.

He (or they) might not flood the market e.g. a 'sell wall' but instead release a few hundred coins every week to resist the free fall in price? That way they can steadily convert all coins to fiat at market price.

Ahh geez, here we go

get out

On a serious note, a single unknown entity having this kind of stash of coins is the single biggest threat bitcoin yet imo. Until its either determined that the coins were lost and or sold etc over time and have already been absorbed by the market OR they were destroyed by loss of private key, etc, OR all the coins are dumped, the purpose of the hacker remains unknown and that uncertainty will scare away growth and adoption.

I sure hope that its prooven the coins were stolen over time or lost due to a private key issue. Otherwise, no progress will happen until the hacker plays his cards and dumps the coins... eventually we'd recover from even that.... but if the bad actor just holds, the uncertainty may actually be the worst possible thing. To have that hanging over our head is not good, esp for large scale adoption.

This is why we should NEVER have allowed any single entity to control this much of the market in the first place, and if we make it through this and get a second chance, i hope an important lesson has been learned about centralization.

By 'cracker', the OP only means a 'hacker'. And English is not his primary language, so let's be sensible here.
On the other note, it would be good for OP to edit the title of the thread to replace 'cracker' with 'hacker'

Actually what might be the unpalatable truth is that a lot of people, over the years, caught wind of the easy hack: lots of dishonest Bitcoiners and no-one has owned up!

Question is how can we control that without a governing body

If 850k coins truly were stolen, shouldn't we be able to see that in the blockchain? Especially if this happened recently. I call bullshit on this one until I see some proof such a big number of coins were actually stolen.

I will forgive him if he changes the title and apologizes to white kind.

Ah, sense :)

I hope you're trolling and not genuinely being a scumbag. But you know what, even if you're trolling, you're kinda still being a genuine scumbag. So fuck off, scumbag?

Now who is the racist here?



Chill or GTFO

Inb4 KKK flags  ;D

Unless he proves all of the shit he says, I don't trust a single word this idiot or his lawyers say anymore. For all we know, he could have been sending all the money to a random address while constantly smoking crack all those years, this explanation is as feasible as any out there now.

I say freeze all his assets - including money he is wasting on the lawyers now - get him a public one instead, and bare minimum for the food. The money would be needed to pay out at least a small part of his debt. I he had any kind of tiny balls, he'd do it himself. But he continues lying, now to the regulators. This path will lead him nowhere.

I believe there are enough pissed off bad guys who had BTC in MtGOX.
If I was him I would be scared that some pissed off russian mob king puts a hit out on him.

(P.S> I'm not in this MtGOX mess and I don't advocate killing people)

850 K BTC... WOWwww I'm hope the cracker send some pieces the BTC to mine.lol  ;D

Maybe this is the half of stolen coins
https://blockchain.info/address/1AYtnRppWM7tWQaVLpm7TvcHKrjKxgCRvX

Divided into ~4k per address waiting to get dumped  ;D ;D ;D


450k for karpeles and 400k for the FBI :D jajaja

I know this has been said elsewhere, but I believe the only theory that makes sense is that mtGox was running a fractional reserve system since the original loss of 500,000 coins in June 2011 due to hacking and the unintentional ponzi was exposed by the November 2013 run up to $1,200USD.

Losses in 2011 were valued merely at $10,000,000USD, now they are billions.

Not billions, hundreds of millions.

Everything Mark has said would say no to that theory, but I agree it seems most plausible and is really unfortunate.

If Mark was knowingly running a fractional reserve since 2011, then I think this is clear-cut fraud with jail time involved.  If Mark was not aware of the theft, then it is just incompetence/negligence.  He would have an incentive to inject as much confusion as possible. 

It never made sense to me how the price could fall so much in 2011.  But if the thieves were slowly selling off 500,000 - 1,000,000 BTC, then that would have added a lot of downwards price pressure. 

Agree with OP, this is a horrible outcome.

It was most likely one person than was taking advantage of the exploit. One person can now bring Bitcoin to it's knees. It's the absolute antithesis to Bitcoin's concept of decentralization.

If you ever played in the altcoin forum, you will see the hysteria when somebody launches a coin with even a 1% premine.

This guy has 6%. There is a real danger to holding Bitcoin as an investment right now, the reward no longer outweighs the risk.

You do realize that if he cashes out, the coins get less expensive right? People will be able to buy them for pennies on the dollar.

If he cashes out, then he will have a shitton of fiat. This will give him away if he ever tries to trade this sum into fiat because the banks don't have that amount of cash lying around.
When his taxes come and the banks report his income, he's sure to get audited.

Especially when bitcoin crashes in a fireworks explosion.


If he cashes out slowly, it will be too slow to worry about anything dramatic happening with the price. He could have the unique ability to keep the price stable for months, attracting more buyers.

Oh please, these is NO good side to this. Just slightly less awful. Slightly.

There's been 2 huge coin movements recently. See this thread:

https://bitcointalk.org/index.php?topic=381045.msg4994241#msg4994241

You seriously think only one person in the whole world found out about the exploit? Forget it, if there is one there are tons more who found out. Many probably didn't even know about the exploit but were all too happy to see that their bitcoin withdrawal went through twice. Anyway I don't buy this whole 850k theft story anyway, it's probably just a cover up for something else.

cracker?

How many different people stole the coins?

When were they stolen?

there's been a known exploit in youtube for years

they might already be dumped

The most concerning thing to me is whether the coins are held by one person or many.  Also, WHEN they were stolen.  If someone with a malicious intent wants to dump them all then we know what is going to happen.  I wish MagicalTux would release some more info.

Guys? Fatboy is still a fraudster. Don't believe anything without proof.

The funniest thing about all this is that iff Mark still have the private keys for his stolen coins (ie the official explanation is true) since he owns a lot of btcs (at least 150k?) he could try to make a deal with the biggest mining pools / miners and hard-fork the blockchain removing the thief's transaction and making a new one to some address he owns. It would require a lot of mining power and consensus in the community, but it's possible :)

(interesting poll results!)

thank you,
wanted to post that the sec i saw the title, but what responses to this typo in this thread....intelligence level around here hasn't been rising lately..seriously, what the f

Hack0r, Crack0r, Phreak0r

I've been thinking more about MtGox and the missing coins today.  I described a theory earlier that the only theft of coins occurred in 2011.  Since then, MtGox has been running a slowly-dwindling fractional reserve:

https://bitcointalk.org/index.php?topic=488058.msg5397869#msg5397869 (https://bitcointalk.org/index.php?topic=488058.msg5397869#msg5397869)


1.  Why is Mark acting so strange about releasing details of the theft?  Why does he insist that the coins are just "temporarily unavailable"?  How much of an impact did malleability play?

Answer: if he admits that the theft took place in 2011 and that he knew, then he is guilty of fraud and will very likely spend time in jail.  If it's plausible that he wasn't aware of the theft until now, then he is only guilty of incompetence and negligence, and will likely not end up in jail.  

I think the malleability thefts were a feature and not a bug.  He wanted people to steal coins in this way, to obfuscate the large theft from 2011.  And he also wants people to think that he thinks he made a mistake somewhere and certain "cold-storage" keys are still on his server.  He knows the coins have been gone for a long time, but he wants to create enough doubt in everyone's mind that he won't be found guilty of a fraud that wiped out half a billion dollars.


2.  What kind of person could lose 500,000 - 1,000,000 bitcoins?  How could the "cold wallet leak"?

Answer:  People are amazed that 750,000 BTC could be stollen.  However, if we assume the theft happened in the summer of 2011, then this is actually very believable and perhaps Mark was more "unlucky" than negligent or incompetent.  Remember, in April of 2011, bicoin was trading at about $1, and in October 2010 at $0.10.  So, 750,000 BTC would have only had a value of about $75,000 when Mark wrote the original code.  

At $75,000, I can see a lot of people saying "oh, just leave the keys on the server."  Then suddenly the price starts to rally hard and months later the price is $30 per BTC and those coins are worth $22.5 million.  Mark is working frantically to code a more secure system because he doesn't want to lose $22.5 million!  But his business grew too fast and he couldn't get it all done.  

And then "bam!"  As he's working to implement better bitcoin security in the summer of 2011 to protect what are now millions of dollars of coins, the theft occurs.  A few years later and the 750,000 BTC that he stored on his server at $0.10 a pop are suddenly worth $400,000,000!

And that's how you go broke with a bang ladies and gentlemen!

Most believable story I've read so far.

That's assuming a lot.

For instance, I don't have morals applying to the harm of animals, but when people hurt plants I tell them to stop.

Maybe this person just has no morals applying to the money in exchanges, but would see a moral problem with tanking an economy.

what.

I disagree, assuming that the thief is looking for more money is not "assuming a lot": he could mix those coins, sell a fraction just to be a new fiat millionaire, do shorts then drop, talk with some evil banks that wants to destroy bitcoin, etc.

If MtGox was actually robbed as they claim then now we have one single actor that have the power to destroy the economy anytime.

Yes, Cracker.  It means  "Criminal hacker", or someone who "Cracks" security to do bad things.

The primary purpose of the term is to distinguish criminal from non-criminal hackers - by people who are absolutely sick of having everyone assuming "Hacker == Crook" as the common media encourages them to.

Forget your racist crap, guys, we are all colorless on the Internet.  None of us has any clue what color any of the others are, and that is a *GOOD* thing.  Use online vocabulary instead, and you get the right meaning.

If the OP wants to dumb down the thread title so that people who don't know this very basic vocabulary can get his original meaning, maybe he should use the word "crook" instead.

+1 - this Karp is bozo, but is still better than 90% of those Wall Street types...

Running stolen coins through an exchange for fiat would be suicidal, thief would get busted quickly.
So if a "cracker" really has 850K bitcoins (highly unlikely really), the question is "WHAT WILL HE SPEND IT ON"?

Answer:  a bunch of stuff from every site on the net that accepts bitcoin. I wouldn't be surprised at all to see "people" overstocking from overstock.com... actually good for the bitcoin economy in a way...

Hookers and blow?

Can't hold it back anymore. The real answer is, It's real bad honkey. Massa's gun' expand his plantation soon.

Manipulate the hell out of the market: just think about it, you don't even need to touch those coins, just buy shorts and sign some terror message!  :-[

Its not hard to manipulate a market with a fraction of those coins. They can move markets and take out profits on a small number of those coins.

A few suggestions:
 - Private Jet (I suggest a tricked out G650 or a private 787 for longer distances)
 - Private Island preferably with a runway with full ILS capabilities.
 - Nice car(s)
 - Maids and butlers

It's not hard to spend lots of money....

as you say. for a while. and perhaps maybe even longer. but does he would be really happy in his life?

Posted From bitcointalk.org Android App

Take a look at Richard Brandson .... does he look "unhappy".

But yes you're right money can enable happiness but it is no guarantee.

How?

Do you know a:
- Bitcoin vendor selling planes?
- Bitcoin vendor selling islands?
- OK yes, you can buy cars
- Maids and Butlers (not professions known for their technical knowhow, although I stand to be corrected) who will accept Bitcoin as a weekly wage?

Bitcoin is not money until (a) you convert it to fiat - as pointed out this would fuck the markets in a major way, making the guy's BTC worth way less or (b) you find someone willing to take it from you for something nice.

We'd all like the things above, but these particular bitcoins won't be buying them.

Rit.

A.
https://www.bitpremier.com/items/view/26
https://www.bitpremier.com/items/view/183

B.
https://www.bitpremier.com/items/view/51

C.
https://www.bitpremier.com/items/view/100

hahaha ;D

OK, I stand corrected! :)

Can you find me a listing for an Underground Lair please? (Dr. Evil voice)

All this talk of this destroying the Bitcoin market are absurd.

This isn't the first huge bitcoin hack and it probably won't be the last.

Nobody is going to try and dump that many coins in one go. They would drain them out slowly to ensure maximum long term profit.

If I were the hacker I would probably sit on them for a long time and probably only start selling OTC to stay under the exchanges radar for a while. Probably reach out to people who expressed an interest of buying a large chunk OTC under market price. It would take a while to get even a million out but given time that could be accelerated as the trading volume picks up and the number of exchanges increases.

Nobody with a large holding of bitcoin is stupid enough to crash the bitcoin market. It's that simple.

I like luxury when I fly, no single propellor shit, I like to lie down or have my martini shaken not stirred 8)

This site says it all
http://www.endeavorglobalgroup.com/

The have off-market Gulfstreams and Boeings private islands and yachts for sale, with bitcoin. :D

I would recommend the G650 which has a good range and luxury and can land on any short runway. 8)

If what Mt.Gox claims is true this is biggest hack ever. The only thing comparable with the SR sized coins (150k).

Do you think a person who have such economic power wouldn't use that to manipulate the market for years?? think again...

+1

6% of the market no matter how large it is.

Found a flaw in your argument.

if they've got that many coins why manipulate the market and risk decreasing their value? The only gameplan worth playing is the one where you just withdraw bitcoins. Anything else is just totally illogical. With 750k coins there is no point in trying to play games with the market and manipulate it. Sure you can cause some flash crashes but then what? That just creates more instability and you've not gained anything.

Anything else is just pure fantasy.

Nope.

If I had stolen 750K in Bitcoins, at was primarily interested in cash, I would of course have a pressing urge to enjoy the immediate benefits of cash richness, but unless I was stupid, I wouldn't dump so much that I destroyed the market which is to be my cash cow for the next 20 years or whatever. Nope. I would definitely let it grow before cashing in my next pay cheque.

The full explanation is complicated, if you are actually interested PM me, as it would derail the thread.

Short answer: I am the rottenest-Botanist.


Fucking lost it. Hilarious.

If exchanges didnt require verification and you could just be anonymous, full on dumping would be the best choice. But since it isnt, then yes.. small dumps that suppress the market eternally are better.

Oh geez, I hate when someone quotes those whom I have on ignore. The stupidity level jumps out of nowhere like that flash crash to $100 last month.