Bitcoin Forum

It might be possible that Mark Karpeles messed up in regards to the cold wallets and need expert help to recover it.

I think this looks like something that's worth looking more closely into:

http://www.reddit.com/r/Bitcoin/comments/1z8fmc/mtgox_private_key_related_coin_loss_a_explanation/

What will Gavin Andresen, other core devs and the Bitcoin Foundation do about this?

Personally I would flown directly to Tokoyo and do whatever I could to look into this situation  if I had the money, connections and knowledge required to look into this closely. Unfortunately I don't have this.

There are however some people that do. And it is the responsibility of the people who have the resources, knowledge and wisdom to help those less fortunate.

While you could say anything about people who had money or coins deposited with MtGox, the fact is that most (if any) did not deserve what happened to them.

Here are some real stories (http://www.reddit.com/r/Bitcoin/comments/1z8hf7/real_life_stories_of_people_screwed_at_gox/) about real people getting affected in a real way.

It is to sad to see that families are being wrecked, and people not being able to rightfully use the money that belongs to them to buy a house, pay their debt and so on. While most of you devs and experts are smart enough not to be affected by this, not all people are.

Bitcoin was meant to change the world for the better, not to fuck people over. While bitcoin is not the same as MtGox, if you actually acted on this information, and it proved to be successful, you would become true heroes, and bitcoin would shine - and you know you at least did what you could to try to help people.

In the opposite case, you basically tell the entire world that you do not care. The Foundation has enough money to assemble a task force to fly to Japan and assist Mark Karpeles.

A Task Force consisting of diplomatic skilled non-judging experts that will only help Mark, and not put blame, harass or otherwise make things difficult for Mark and MtGox, but an honest attempt to help the people who've been caught out in this situation.

The Foundation do have the financial means. While the foundation and software experts in this community do not owe the victims anything and do not have a legal obligation to intervene, the situation is so special that intervention is warranted, Charlie Shrem also said this in one of the latest Let's Talk Bitcoin episodes.

If this could be fixed somehow, and it's all a matter of fixing the private keys, and that is in fact possible, not only would you help all those victims to at least recover some part of their investment, but you would also be complete heroes, and bring a lot of positive press to bitcoin. While I understand a lot of you don't care about being heroes, the gratitude from people and the knowledge that you touched the lives of countless people will be a reward enough in itself.

I sincerely hope that you will take action and help.

Ps: My loss in the event is very small, but I really have compassion and thought for all the rest of the customers who got caught out. Let's not be insensitive and put blame on people and call them stupid, let's help them!

If it can be done without forking the blockchain, I'd be for this. Also if it can be done without Mtgox coming back. I have no losses from this, but I do sympathize with those who do. Except the executive staff of Mtgox. This level of mismanagement, if that's what it is, is criminal. No one in charge of that amount of money should be sloppy at all, let alone to the tune of six percent of the currency.

If it can't be recovered without breaking the blockchain, let it die. It will make the coin more valuable.

I am not suggesting the blockchain should be altered. I'm suggesting that the suggestions the software developer in the first reddit link made should be checked more closely.

It might be that Mark just fucked up and is too embarassed to admit it, and might try to fix it himself, but doesn't have the required knowledge to do so, due to regressive errors in his code. Software experts may be able to see what's wrong and possibly retrieve the keys to the cold storage that might be lost.

Yes, I understand. But I have also seen a number of people asking for a fork where those coins are destroyed and regenerated. I am of the firm opinion that this would kill bitcoin were it actually done.

I'm also not a firm believer in the (varied) stories of Mr. Karpeles. I've only been seriously involved in this community for about two years, and frankly, what I saw on the MtGox front page on my first visit was "mene, mene, tekel uparshin". I've never had a satoshi pass through there, unless it came down the chain from me. I don't trust the man or his business. It would be nice if it could be fixed, at least sufficiently to mostly reimburse those who hold coin there. But not at the expense of this grand experiment. Even if the funds are recovered, Mtgox needs to stay dead.

Where did you read that Mark Karpeles asked for a help? You can't help someone who doesn't want your help.

There is no such thing as "fixing private keys".   Private keys are simply random 256 bit numbers.  You either have them or you don't.

If MtGox either
a) doesn't have the private keys for the coins in their wallet
or
b) they have the private keys but the coins have been moved (given to attackers, stolen years ago in prior hacks, embezzled)

there is nothing short of a hard fork to mint new coins for MtGox that anyone can do.

I agree with Biomech on his thoughts.

As for the input from itod: I think a task force should be sent there anyway, and they should be very persistent in trying to help MtGox/Mark. If he refuses help, that points even more to him being guilty of misdoings.

I would think there's at least someone on the Foundation or otherwise (Roger Ver?), that could sit down with Mark, have a conversation, and convince him that it is in everybody's interest to work together to find a solution.

Please read:

http://www.reddit.com/r/Bitcoin/comments/1z8fmc/mtgox_private_key_related_coin_loss_a_explanation/

Dude, TheFootMan, thanks for this post. I absolutely agree with you. I don't have anything in Gox, never have, but I agree that many people are suffering and their lives have been mutated because of this, and we need to get their BTC back. They don't deserve this.
And it would silence all those who badmouth Bitcoin, for at least a day!

Yeah I read it an it is utter nonsense written by someone who doesn't understand that private keys are random and addresses are derived from those private keys.  

Private key a is a random 256 bit number.  Using ECDSA and priv_key a produces pubkey A which is hashed and cheksumed to form address AA.  A proper wallet would record "a" and "AA".  If MtGox's custom wallet was broken such that after randomly generating "a" instead of producing address "AA" it produced address "BB" then contrary to the linked post, there is no way to find private key "b" from address "BB".  The coins are now at "BB" which has an unknown key and they were never sent to "AA" which is the address for the key MtGox has.

The linked post is just a theory and if right (MtGox doesn't have the private keys from the addresses containing 800,000 BTC) then those coins are "gone" forever*.  If you could "recover" those coins then it wouldn't really matter because Bitcoin is completely broken and worthless.

Furthermore I would add nobody even knows if this is the case.  Mark (and his lawyers) have been very vague on the exact status of the "lost/stolen/missing/unavailable" coins and the reason for that status.   


* Well at least until the cryptographic primitives are weakened by cryptanalysis to make a brute force attack possible which could be 0 to infinite years from now.

Ok, well the private keys are probably not restorable, but something should be done to pay back people who have suffered because of this.

Advanced math is not my strongpoint, but what you say is what I have understood as well.

In truth, I don't believe the keys are missing or that Gox was hacked. I think somebody on the inside stole it. I have strong (but unproven) suspicions of Mark Karpeles himself, since NOBODY in charge of a business would fail to note a monetary hemorrhage of that magnitude. Hell, when I was an assistant manager, I'd redo the numbers ten times to find five bucks. I was in charge of a few thousand dollars, not a King's Ransom.

The whole thing stinks of fish.

So MtGox is too big to fail and there should be "super users" who have the ability to generate hundreds of thousands of new coins by decree?  You have just reinvented the existing banking system.  Bitcoin was suppose to be digital gold.  If a ship carrying 750,000 ounces of gold for a depository sunk in irrecoverably deep water and the depository was uninsured you couldn't just magic up another 750,000 ounces of gold.

Any hard fork or alteration of the core bitcoin rules essentially has no chance of consensus and if it did it would undermine all the touted benefits of Bitcoin.  What is different about "Gavin" (as if he had the power) minting 750,000 BTC by decree, compared to the federal reserve printing a sum of USD from nothing?

+ infinity! If the coins are truly lost, let 'em go. The rise in value will help to compensate people. In addition, they DID file bankruptcy. Their other assets will be sold, and disbursed as at least some compensation to the bagholders.

It does suck, but it is not the end of bitcoin. If the coins were actually stolen, they'll eventually recirculate. Not cool for those who lost, but no harm to bitcoin. If they are lost, again not cool for those who lost, but the coin becomes automatically more valuable on scarcity alone.

Gox going down in flames is also positive for bitcoin, as they were a nightmare already.

In the name of Satoshi please stop mentioning a fork here. It makes me feel sick  >:(

If it is just about trying to recover a potentially lost private key, then yes, why not?

well, first thing to do before spending more thought is to extract the truth from Mark or Gox, force maybe necessary as it's been proven that they are not cooperative and continue lying.

No violence really necessary, other than a thug to hold him down for a minute while you hook up the Sodium Amytal drip (http://en.wikipedia.org/wiki/Amobarbital).

Thanks for the explanation. This makes sense.

However as someone said on the original Reddit thread:

--- The only thing that's clear is we need a thorough investigation and time is of the essence.

Before we make any more speculation, it's necessary to find out exactly what has happened. And I'm not sure if Mark's the right person to be able to do that right now. Perhaps he should enter more of an advisory role, and have a team of skilled devs/auditors looking into it.

Before we have established what exactly is the problem it is not possible to fix it, and it might as well be unfixable, but then there was at least an attempt to fix it..


I agree with DAT here.


The funny thing is that force might be exactly the thing that would be needed, although most us are too civil to condone that kind of thing, if we did and claimed it was for the greater god, who would we be like then?



I do not talk about making a fork. I talk about doing an investigation and then see if anything could be done. It could be that privkeys are encrypted, and the password who mark stored on an usb disk is gone or corrupted for example..

This I agree on.  MtGox alleges they don't have 800K BTC that they "should have".  There are about a half dozen credible theories as to why that is the case.  MtGox has been totally silent and opaque on the issue.  Mark's comments to date have been either false or vague to the point of being useless.

Until MtGox provides some clarity on EXACTLY how they ended up short 800K BTC, it is all academic speculation.

Its just so unfathomable to think of that amount of BTC just being lost. The fact that gox has said nothing just adds to the speculation.

I think this is the main issue and until we hear anything from gox themselves all manor of possibilities could be true.

In terms of hard fork to recover funds due to people not understanding counter-party risk ... er no.

Well as far as I understand, there could be a homomorphic function f for which f(AA) = BB, and then there'd be an f' for which f'(aa) = bb. But I think that's extremely unlikely. Also I dimly remember MtGox had a problem with broken tx scripts, which I very much doubt falls into this homomorphic function class.

If the current Bitcoin model allows a guy like MK to wreak such havoc, then there's something wrong in the current Bitcoin model.

Let's say that some cryptographic breakthroughs during the next few years allow us to figure out a private key from a bitcoin address in a reasonable amount of time (ie both SHA256 and RIPEMD160 become vulnerable).

By then, the bitcoin software will have been upgraded to work with a different set of hashes and everybody will have sent all their balance from the old, potentially compromised addresses to the new ones. This scenario would mean two things:

- We would be able to know the exact amount of lost coins. All balance that remains in the old addresses could be safely assumed to have been previously lost.
- All those lost coins could be reintroduced back into the system by cracking their private keys (I'll leave aside the subject of how to distribute them among users).

Now, if mtgox hasn't been robbed and the root cause of this situation is that MK lost the private key(s) to the cold wallet(s), we would have a chance to return the coins to their rightful owners without forking the network or minting new coins. We would just rescue those lost coins and put them in circulation again.

Full disclosure: I'm one affected mtgox user.

Thats not going to happen...these poeple were on the other side of the trade and in on the cover - up ( Roger seemingly bidding for Goxcoins,remember? ) ....they collected

your wealth on the way up , your money went offshore already....and now your stolen coins are even dumped on you until wallstreet picks em up for 50 bucks a piece...

if you don´t believe me...just watch the show ;)

The current bitcoin model can't stop people from doing stupid things.  Like dealing with a group that has had issue with reliability for years. Like storing bitcoins on an exchange, pool or somewhere else where you don't have the private keys. Like designing software  that allows one to withdraw the same funds many times.

This isn't about the bitcoin model, this is about gox being stupid, uninformed, or criminal depending on who you believe and people not seeing (or ignoring) the repeated issues all through 2013 and before.

Yep.

If a hard fork was done to print more coins, i would definately leave Bitcoin...

Some rules are meant *not* to be changed. You can't just print gold out of thin air. Bitcoin is the new gold. An action like this would literally destroy Bitcoin.

I have a question:
I do understand that private keys are random numbers, but at same point they have to be created on deterministic factors like time etc. So when the private key would be let's say a hash of the "magic_number"+timestamp, then there is a chance to rebuild the private key, if you have the magic number and the timestamp. For the sake of simplicity let's assume the bug is that a letter x got added to the private key. So no private key would work anymore.
-> So in this case there would be a feasible way to compute the private keys.

But I have no idea how MtGox created the private key. Maybe they took something that can't be found like Marc used 500 random characters (just pushed his hands on the keyboard).

So based on what private keys get created in the qt wallet?

If there existed such an easy way to compute private keys, then Bitcoin was doomed from the start. Well, actually - maybe the whole Internet would be doomed, as no SSL or SSH session would ever be safe.

Luckily, that's rather improbable.

The QT client uses the OS level random number generator to generate private keys.  If values of PRNG could be recomputed, then anyone could recompute any other persons private keys.  Bitcoin would fail and so would essentially all other crypto.  PRNG while not truly random are designed to make such recomputation infeasible.  They don't just use a timestamp, they pull data from an entropy pool which is filled with sources like # of disk I/O failures in last x seconds,  random noise from sound card DAC, temperature of processor, the timing (in milliseconds) between keystrokes on the keyboard, the mouse movement data, the latency recorded on IDE calls.

To recompute a PRNG value would require not just the timestamp of the value but recreating the system in the exact same configuration as it was at the time the random value was requested.  This is nearly impossible unless there is some flaw in the PRNG and even then you would need some extensive cryptanalysis and a lot of computing power (i.e may take quadrillions of attempts to recompute the target value).

Of course it is also possible to generate private keys using a true hardware random number generator (quantum random number generator is one example).  For those there is no method, not even theoretical to recompute the generated number.

That subject is an easy one: Whomever cracks them, gets them. It couldnt be any other way, unless we start talking about "tainted coins" again.

See this post on ways for tracking who has the coins.
https://bitcointalk.org/index.php?topic=494761.0

I'm sorry about your loss, but the only owners of those BTC are the ones who presently hold them. There is not a shred of evidence that those coins are "lost", meaning those private keys are destroyed by MtGox. I know this sounds harsh, but any attempt to try to return those coins to previous owners by some technical method would totally destroy Bitcoin. It's the exact opposite of everything Bitcoin stands for. There are legal paths that affected people can turn to, trying to use any other means would bring the end of Bitcoin. It's not fair (as life often isn't), but those coins are someone else's now.

Speaking of legal means, it's unclear to me that it's so hard to find people who allegedly stole them through malleability. There are server logs with IP addresses, there are ton of personal data including email accounts, all those data can be accessed with court orders in almost any country of the world. I don't believe those criminals were that good they didn't leave a single piece of evidence behind them. That's your biggest hope to return those coins IMHO. I refuse to believe that all of them were stolen, someone calculated that in order to steal 750.000 BTC from june 2011 till now you have to steal them at a rate of 1000 BTC a day. There's almost 0 chance fraud of that size can possibly go unnoticed.

If the current fiat currency model allows you to destroy money by burning banknotes, then there's something wrong in the current fiat currency model.  ::)

In such case one can also rob Satoshi's coins. Yes, you will get your bitcoins back, but they will be totally worthless.

Haha. Very funny.

"With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party."

Bitcoin is supposed to work without the need for a trusted third party. If that were true, we wouldn't be here discussing MK's evil deeds.

Bitcoin works fine without a trusted third party.

Bitcoin users who refrained from trusting any third parties lost exactly zero bitcoins.

Bitcoin promises to let your "be your own bank". If you decide to be your own daytrader then you're on your own.

Bitcoin does work without the need for a trusted third party.   That being said you can't by technology prohibit people from using a third party.  Satoshi never outlined a system which would prohibit voluntary association.  Sadly many people opts out of the trusted third party model by using MtGox.  Not just using them as a temporary exchange service (and yes even in a model which has no trusted third party there is a level of trust needed between consumer and merchant/service provider), but using them as a long term storage of coins.  In essence using them as a bank without insurance or oversight.   

MtGox is dead.  Bitcoin still functions.  I made transactions all week long and none of them failed or were delayed because of MtGox.  Bitcoin is a revolutionary technology and for many concepts like


until now have seemed like quaint phrases.  Many people will never see the risk until after the catastrophic event.   It has now happened.  Hopefully people (collectively) will learn from this and use Bitcoin as Satoshi intended.  Keep control of your own wealth and don't hand that responsibility over to an untrusted third party.

Bitcoin works perfectly without a trusted third party.  People chose to ignore that bitcoin does not need a trusted third party, and put their trust in a untrustworthy third party - MtGox. 

It has been said many, many times, but if you do not have your private keys, you do not own bitcoin. At best you have a ledger entry on someone's books saying that they owe you X BTC.  It is the difference between owning gold or owning GLD; or holding cash in your hand or holding an IOU for cash from someone.  This is not a bitcoin protocol problem, but a problem with an exchanges interface with bitcoin which they eff'd up royally.

I agree. However it's a fact that an inordinately large number of people chose to entrust their bitcoins to an unreliable third party such as Mt.Gox. The resulting disaster and those that may follow along the same lines can be tackled either

a) by pointing out , not without reason, that this is a non-issue, since in the bitcoin world it's every man for himself. That's fine , but it may scare off the naive adopter, i.e. the vast majority of people, compromising bitcoin's success.

or

b)  by introducing regulation for exchanges, i.e. turning them into banks, transforming the current bitcoin model into something quite different.

Many people have withdrawn their money since last June. The red flag was there for months. People staying there were either playing with fire, lazy, or simply ignorant.

Although that might be a good idea to regulate bitcoin exchange, that is irrelevant to the bitcoin as a currency or protocol. You don't need an exchange to spend or receive bitcoin.

or

c) Better software (http://bitcoinism.blogspot.com/2013/12/voting-pools-how-to-stop-plague-of.html)

All this talk about regulation is a smokescreen for convincing the community to surrender to the vampire squid. Everybody pushing this line of shit can fuck off.

Many people believed in bitcoin and got badly burnt. If you are suggesting that only sophisticated investors should use bitcoin, so be it.

Anyways, regulation can be enforced only by governments and in ways that they see fit. If regulation comes into the bitcoin world, I expect it to be intrusive and impose rules on the way bitcoin works. NB When I refer to the bitcoin model I don't mean just the intellectual and technical marvels of the bitcoin protocol, but to the way bitcoin plays out in the practice of people's lives, which IMO is what matters.

Believers in Bitcoin were not burnt.

Believers in MtGox were burnt.  The warnings were obvious to me 2 years ago.  By 6 months ago even a gadfly like the Winkelevii knew to get out of the way.

MPOE-PR said it best over a year ago.  MtGox must die for Bitcoin to move forward.

Perhaps I'm just inherently paranoid, but I have never kept coins online since my beginning with bitcoin. They are stored in my wallet, on my computer, a couple CD's, some flash drives, etc. I hold the keys, and my password is ridiculously random and highly encrypted.

I have used online wallets as a temporary measure, such as exchanging them for fiat or 1 day portability, but never more than 24 hours and never my whole wad. I use banks in the fiat world because I have little choice, but in Bitcoin, what's the point?

This seemed obvious to me even before I looked into Mtgox. What I saw there, two years ago, was a company that was either no good with money or deliberately fraudulent. People tend to forgive the former, but frankly I have less contempt for the fraudulent! Being stupid at your PRIMARY business is just inexcusable. In either case, they deserved to fail. Their customers did not deserve to be bankrupted along with them, though they should have exercised better diligence given Gox's history.

Edit. Former for latter. Oops.

Or c) Holding people accountable for their actions, and requiring a high level of thought, diligence, and TRANSPARENCY from those we choose to be custodians of our treasure. Prior to being owned by governments (or the reverse, if we're to be honest) banks were beholden to their customers FIRST. Those who failed in that ceased to exist.

Those of you seeing this as a failure of a free market system need to educate yourselves on how the "invisible hand" actually works. This is a failure of a sub par company, which is a SUCCESS for the free market. A bad actor has been removed. Not bailed out. Not being "too big to fail".

If their intent was good, they were too incompetent to be in the business they were in. If they were fraudulent, then they deserve to be caught, fleeced as much as possible, hung out to dry, and consigned to the dustbin of history as a fine example of how not to run a business. Free markets are self correcting, and as in the case of most things in life, Stupidity on any actor's part is often painful and frequently fatal. The lesson to be learned from that is not to be stupid.

I'm gonna run with this, speaking for myself rather than the OP. I think that investors should be more sophisticated. I am not good at exchange games, therefore I play them very cautiously with a goal to learning. And I EXPECT to lose, thus I do not lose that which I cannot afford. I don't INTEND to lose, but I am a novice and I know it and act accordingly.

I think the moral hazard inherent in the funny money that has been foisted upon us since the early 20th century has made most of us complacent and unsophisticated in a manner that would perplex our ancestors to no end. I guarantee that when money was still golden, people were MUCH more circumspect with whom they trusted. And those so trusted earned it. Those who didn't quite often ended up on the wrong end of a rope or a gun. Hard consequence? Yes. Effective? Yes. It was and remains a good model. The fact that bitcoin functions on that same model is a STRENGTH of the concept, not a weakness. There is little moral hazard involved in the circulation of bitcoin, as it IS scarce, it IS irreversable, and it DOES require the individual actor to have a brain. I think this makes it superior to most other currencies. I don't think it superior to gold, but it does have some advantages even there. Mainly easy portability.

If you look at it from a market point of view, this is a good thing in the long run. It's a wake up call for the complacent, a loss of malinvestment, and a good chance for all bitcoiners to clean their own house. Exchanges are necessary, but they are now going to be under far more scrutiny FROM US than they were previously. Those who prove themselves will do well for us and for themselves. Those who try to cheat will have a much harder time of it, and the incompetent will either shape up or fail.

Bitcoin is not harmed by this event. Mtgox is slain and a lot of individuals are harmed. Bitcoin is strengthened, and the harm done to the poor bastards who lost their coin is not permanent. They made the money in the first place, and if they are competent they will overcome the setback. Doesn't make what Mtgox did right, but it does set a perspective.

Don't harm the blockchain to bail out a bad actor. It killed the dollar, and it will kill bitcoin.

In my opinion people need to take responsibility for their own actions. You deposited with Gox? You lose when they go under.

Anytime I send funds to an exchange, I understand that these are not dollars and are not backed or protected by anything or anyone.

It is a trust arrangement between me and the exchange, and we both serve to benefit from this relationship. But if I lose my coins, thats on me.

It called being a grown up, and not acting like a baby. I feel bad for those who lost on Gox, but its insane to argue they should have their coins restored because of their bad choices.

I made (what now look like) good choices, and didnt put any coins on Gox. If people who lost on Gox had their coins "reissued" that would radically devalue all existing coins and I would probably leave Bitcoin.

A great series of posts there Biomech, well said.

Ok, this makes perfect sense to me. Thanks.
So then I don't understand how to make a computation feasible.
If I am calculating right, when we use the whole network hashrate for one year we would have only 2^80.

PS: Just to recreate the lost coins with a hard fork would be like a reinventing of the current banking system. So I hope there will be never any significant majority for that.. (but I think this is hiiiighly unlikely)

All exchanges are doing fractional....

just force every exchange to do all deals in the blockchain...thats not going to happen---cause the big fish want to cash out of the ponzi and the bagholders are waning !

Cheers

Fractional is tempting. But in that sense Gox was a good thing to happen. Maybe in a few month or a year, exchanges will proof to their customers, that they have 100% reserve. But I think this is only feasible on the basis of btc but not fiat. This would cause a premium on the btc price. hm.

at this point only the second coming of satoshi could bail-out gox.  :(
and yes, karpeles is a fat liar and deserves to die.

If lucky, someone else will take over gox, give everyone a hair-cut and re-start the exchange.

FTFY. And yes, if one do not have half a brain to understand the difference between gox and bitcoin, they should not invest in it.

Thank you everyone for all the input, I think there's a lot of good input here.

I will make a few bulletpoints to clarify my position:

- I don't think MtGox is 'too big to fail'.
- I agree personal responsibility is #1, and I see it's very common in society today for many not to realize this.
- I'm not asking for anyone to 'bail' MtGox out.
- I'm not asking for a blockchain fork or otherwise a technical solution involving the blockchain/bitcoin.

And I'm pretty sure everyone that has been burnt by holding any significant amount of money at MtGox by now pretty well understand that what they did was foolish..

While all your input makes logical sense, how do you expect all people to become sharp and sophisticated? Do we want Bitcoin to become mainstream, or do we want it to be some kind of niche thing?

Most inventions that has become mainstream has been made so that you do not need to know the underlying technology, and you don't need to be sophisticated to use it. Although most people in 'Development & Technical Discussion' at bitcointalk.org probably are rather smart and intelligent, that's not true for the majority of the population. And it never will be.

Sure, education is good, but at what cost? Although I'm leaning to the camp of personal responsibility, and I'm not emotionally involved in MtGox because my losses were negligible (I saw the MtGox demise coming like a boat drifting towards a river fall for a long time - and that's without trying to sound like a smart ass), I don't think those naive enough to invest with MtGox deserves their huge losses.

I am not sure about all the rest of you, technical minded males are not often the ones with the most amount of compassion, but I genuinely feel sorry for those that have their lifes affected to a serious degree. There might be suicides, relations that are ruined, opportunities that will be lost. Cynically if anyone kills themselves over this, or if their relationship shatters to pieces, ultimately they do have themselves to blame. And a cynic could point to someone killing him self for whatever reason that this is only nature cleaning up the gene pool, that person failed and will not bring forward his genes.

It's easy not to care about someone you don't know. They're distant, their lifes doesn't affect you. What if it was your friend, what if it was your spouse, your daughter or your son? Maybe you would've been so involved in their lives already that you advise them in all matters, and help them not make mistakes, and what if there was a major mistake on their part - and you would suffer yourself. Then shit just got real.

I'm not saying that we should have a society where we need to lead everybody by the hand at that all errors should be wiped out without pain, what I'm saying is that we should have a society where those having the knowledge, resources and wisdom to help those less fortunate.

For instance, once there was a small girl coming knocking on the window of our living room. My wife opened the door and wondered what it was all about. This girl was terrified and frozen up. It was icy cold outside. She had originally been on a trip with a horse, the horse had bolted away, and she was confused to as where she was, she had agreed to meet her father at a designated meeting point, but now she was emotionally upset, didn't think clearly, was hungry and tired and desperate.

The cynic could've closed the door and said: Well, people who are not smart enough to take responsibility for their own actions deserve to face the consequences.

Her father did an error for letting her be alone out in the cold weather like that, she might've done an error making the horse get away and so on. There were a whole line of fuckups, but this girl was young and inexperienced, and the father probably didn't think this would happen.. Call them stupid, deserving or whatever..

But we took our car, and drove the girl to the designated meeting point. The father was a total wreck, and there was also a police car there, and they thanked us, and we went home. We did the right thing. We acted in a morally and ethically right way, although we did not have a legal obligation to help that girl. We were simply humans. Humans mostly operates in groups and helps each other.

Now, turning this to Bitcoin. While people need to be aware of their personal responsibilities, a lot of people trust in authority. In the bitcoin world, people who have prominent positions, or make themselves into prominent persons have a larger responsibility than others. If you vouch for a bitcoin business, people will trust you and put their money there.

When the Bitcoin Foundation has MtGox as a gold member, and does not kick them out before far too late, that's also one way to give them credibility and instill trust in normal people, or the sheep, as many would call them.

One could say that every person investing with MtGox is 100% responsible for what they do, and they are. And the fuckup of MtGox's part, be it incompetence, fraud or both is 100% MtGox's responsibility.

In the same breath I think it's the foundations responsibility, and likewise the responsibility of all other known persons in the bitcoin community to not vouch for or to prop up MtGox when they simply don't can't know that they're solvent and running well. At best, when the Bitcoin Foundation does not set up a big warning and kick them out for being Gold Members when problems keep surfacing, and they (Gox) show no sign to improve their act even after repeated requests, negligence is the only word that I can think to come by.

This is not a blame game. It's not The foundations fault that people invested with MtGox, it's not the fault of prominent bitcoin people that customers invested with MtGox, but it is surely the fault of these people embracing MtGox when they KNEW that everything was not well.

A Bitcoin Foundation seeking to protect and promote bitcoin should be on the ball in events like this, ask very hard questions, and be persistent, and demand answers and proof. If this does not happen, then any membership association with the foundation should be removed, and there should be put up a warning about that company.

But perhaps I'm just being naive, and that the foundation is merely a place for business interests to discuss and further their own agenda. But - and this is the truth - although the Foundation is not an entity that has the legal mean of regulating the bitcoin industry, the demise of MtGox also affexts Bitcoin negatively as a whole. A lot of people have now lost their faith in bitcoin, and they will surely tell their friends and complain to everybody that will listen. If this is irresponsible and stupid, that's kind of irrelevant, as it will happen anyway.

So it's important to raise your eyes, and see around you. Although you're isolated speaking a smart, intelligent and sophisticated investor - most people are not and never will be. And thus I stand by "it is the responsibility of those able to help those less fortunate".

I'm sure you all get my point here. While we must cherish and embrace personal responsibility, and instill this in our children and in everyone around us, we should also help people that have ended up in a bad situation. Although a lot of those people are stupid and naive, I'm sure none of them wished to end up in that situation, and I'm sure that a lot of them learn from it and will never end up there again.

So what I thought those at the top of the foodchain in the bitcoin community could do was to establish a task force, and not just offering, but insisting on helping MtGox, and leveraging everything that they could to have MtGox accept this help. I'm not saying they should bail MtGox out. I think the best might as well be to help them clean up the mess as well as possible, and then dissolve MtGox after customers have gotten back as much funds as possible.

Currently, what the sharks and wolfes in this community is doing is to stand next to a train wreck and not helping the crying and injuried people. They're not legally obliged to help, but if they wanted to, they could at least try to the best of their abilities, as it would be in their own interest. And also by not accting, the Bitcoin Foundation is essentially making themselves irrelevant.

As a last word: Words are cheap and easy, and if I really wanted change, I should start some organization myself that did the things that I'm complaining about in this post, but the truth is that any such organization would take a lot of time to get on its feet, and in the case of MtGox - action needs to happen right now.

My thoughts go out to all those sheep, naive and dumb as they are, but still they lost a lot, and does not deserve that loss.

according to this:
 http://www.reddit.com/r/Bitcoin/comments/1z7krg/japanese_newspaper_asahi_shimbun_has_50_billion/cfr8f61 (http://www.reddit.com/r/Bitcoin/comments/1z7krg/japanese_newspaper_asahi_shimbun_has_50_billion/cfr8f61)

An external consultant is aiding in mapping the theft together with police. I would imagine that it's some one we've heard about before?

I have yet to see evidence of this either.

If people weren't using an exchange for long-term bitcoin storage, fractional would not be possible.

thanks for your post.
that's one of the most advanced posts I've read about cryptocurrencies so far (and one of the longest as well). being guided by the opposite of the dark triad (http://en.wikipedia.org/wiki/Dark_triad) will ensure the future of bitcoin. that said, the value of bitcoin positively correlates to cohesion of its participants. according to that assumption, the highest self-interest would be to help sort things out at mtgox although not affected at first sight (like myself).

I think everyone has sympathy for these people, don't confuse discussing something logically with you as having no compassion for them.  Certainly there are plenty of people who just didn't know not to keep bitcoin on an exchange even though it has been stated by many hundreds of times - in fact I know a technically adept guy who had a few bitcoins at Gox because he just didn't get around to moving them.  Stating the fact that if you don't have the private key, you don't own bitcoin, is trying to help to educate people to the benefits of bitcoin. 

It is always best to educate yourself prior to investing, and a lot of people did not investigate Gox enough.  I've been telling people not to use Gox for more than 18 months because they just seemed inept.

Regarding this:

This is true, but we aren't there yet.  This is like the internet in 1988.  Some people were using it, but it was not easy to use telnet, ftp, and gopher for the average grandmother.  It wasn't for another 10-15 years - maybe 5-10 years after the web became available - that it became pretty easy to use.  Ease and safety will come.  Things like ardware wallets so you don't think you need to store BTC on an exchange, easy, more reputable exchanges.  (Just think though if the USA hadn't had a $20+ million cost to set up an exchange due to all the rules and regs for almost 50 states (iirc 2 don't need a license), Gox probably would have had better competition years ago and not gotten this far!)

Never heard about 'the dark triad' before, but I read that wiki link and learned something new - and I always enjoy learning something new. So thank you for that. I can agree with your conclusion here as well. Thank you for your post.





I'm not up to date on the development of hardware wallets, but I agree that will be great when it goes mainstream and is easy to use. Also, I did not want this thread to turn into a thread where we fights out who's right and who aren't. I'm interested in sharing and learning, not to prove something or to claim that I'm always right. The fact that I pointed out compassion as one of the things I think is important does not mean I accuse the rest of you for not having compassion.

From experience in technical fields  I recognize that quite a few people are very detail oriented, and have a problem seeing the entire picture. And males in general are less compassionate than women, which is hardwired into the genes.

I realize most of you are great persons that have thoughts for more than the mere technical side of things, and as one matures, the realization that one's a part of a whole, and everything is interconnected becomes more apparent.

While some teenagers mine in their basement, and do some satoshi dice and don't really care about the impact on society that bitcoin have, I see a lot of the older participants (30+) in the system do have this in mind, and that's why I'm still involved, even if some of the magic was removed when Gavin called the people in this forum a cesspit. I figured this was greater than Gavin, and as such I should not care too much of his comment, although I really had him in high regard before he said that.

I'm merely trying to direct attention to what I believe is the best. This might not be in line with what everyone else think is the best, but in general I do care about other people and their well being, and I believe in being honest, and honor promises and acting ethically. Not saying that I'm a saint or perfect, as nobody ever will be, but I think having a broader view than mere self interest is beneficial, and while it cannot be expected by young people, I think it should most definitely be expected by older people. And a lot of people are doing great things for bitcoin and deserve praise and a clap on the shoulder, but those who are not 'acting in the best interest' for bitcoin should not be allowed to hold important positions, or given too much credit.

While it always can be discussed what's in the best interest for bitcoin  and who's to decide what is, I think that adults are able to look at my message and realize what my point is.

This thread is one of the more constructive threads I've experienced for a while on this forum, and I thank you all for that. I'm frankly tired of all the trolls and silly posts this forum is often riddled with.

Whereas there are indeed some people that qualifies to be a part of the 'cesspit' Gavin talks about, there are also a lot of very non-cesspit people around here. :) And besides, Gavin is just nothing more than a normal man, and I can imagine it can be really annoying when you really contribute a lot to bitcoin, and then you have all these people contributing virtually nothing and just complaining - but they're still a part of the community and buys bitcoins, purchase goods with bitcoins, trade bitcoins and make it all possible. So the elitist group in the community would be quite lonely if it wasn't for the 'cesspit'. Anyway - that's what was on my mind. Thank you again.

Don't worry, a Task Force consisting of, erm, diplomatic skilled non-judging experts, is right now directed to Japan to extract the truth (or whatever) from Mark K. 8)

http://upload.wikimedia.org/wikipedia/ru/4/44/%D0%9A%D1%83%D0%B1%D1%80%D0%B8%D0%BA,_%D0%A1%D1%82%D1%8D%D0%BD%D0%BB%D0%B8_%D0%97%D0%90.jpg

In the back there seems to be a frenchman, I kindly ask you to replace him with someone else, preferably somebody from Finland.

If the big fish ( TBF ) or the big fail not only wanted to cash out as soon as possible they would not have let this happen and certainly would not just stand by and

tell all suckers atill in the game : Hey get over this....we lost some too...just buy more and put them in cold storage how Mark was cleverly doing ;)

and then be part of our platinum membership !

I empathize.  Up in NY not finding work in my field I worked as a cashier in a typically busy LI supermarket.  Not like down south here where cashiers casually scan items at a snails pace, long lines, loaded carts, we'd have to move products across the scanner very, very quickly and with accuracy.  Counting out at night, EXACT receipts were required.  When a nickel was short there was hell to pay.  You'd be in a small closet with a window to the managers cubical and after a long day on one's feet, to be getting a blast bile and instructions to recount the draw repeatedly ain't fun.  So, there's almost a half billion dollars worth of bitcoins missing.  And he's 'sorry about that'.

He should offer a reward for information leading to trial and conviction as well as btc return.  He's not going to do that if he's the guilty party.

While I don't think it was directed at me, I'd like to address the compassion issue.

While I think it is indeed necessary and right to discuss and if possible mitigate the human cost here, I also think that any "technical" solution that rolls back the blockchain or otherwise messes with the internal working of Bitcoin is NOT compassionate, even though it appears to be. Because if we do that (and the nature of bitcoin makes it so it is ALL of us if it is to be done), then instead of 6 percent loss, it's one hundred percent. I understand that the op was in fact not suggesting this, but rather trying to find a way to recover the keys. But the idea nevertheless got floated, and in more than one place.

I would suggest that all those who lost money in whatever flavor to MTGOX contact the court officers who are investigating the alleged bankruptcy and DETAIL your losses, with such details as they need to prove it. I doubt that the software and user accounts have been destroyed, and the missing coins do exist in the blockchain. I'm not a cryptographic expert. It's something I have some interest in, but my math skills are sub par. I'm good at merchant's math, but not the advanced stuff. Nevertheless, with the experts and the law all on this, it is likely that a fair amount will be recovered and disbursed to the account holders. I very much doubt that Mr. Karpeles personal fortune will be greatly impacted by this, unless he was foolish enough to keep his personal funds on the exchange and/or is found to have perpetrated or been involved. But his company is going to be either sold at auction piecemeal, or be bought out (price of which would likely include settlement of accounts to the extent possible).

While not physical, Bitcoin shares far more in common with hard monies such as gold and silver than it does with modern fiat currencies. It has to be treated as such. You, me, every bitcoin user needs to understand this. You HAVE to have sole access to your private keys at all times, and if you do have coins on an exchange, it should be a fraction of what you have, or be there no longer than it takes to effect the exchange. I think the people who got burned will learn this. I know it kind of came off like I was saying "they got what they deserved" earlier, but that was not my intent. I have personally lost a small fortune due to similar mistakes in my youth. If you learn from it, it's a painful memory. If you do it a second time, then yes, it is your fault.

I also think there is an opportunity here, and I would encourage former holders of Goxcoins to look into this, of offering insurance to the bitcoin market. One can mitigate quite a bit of risk in that manner, by risking a bit more on insurance :D It's a rather old economic model, and one that works. An honest insurance company (they do exist, or at least have) makes a lot of money for it's operators, and mitigate risk in a manner that encourages commerce and discourages stupidity while protecting it's clients against exactly the kind of crap that just went down with Gox.

I guess what I'm saying is that I think the most compassionate thing we as a community can do is encourage those who lost out to be more careful in the future, and to help build the value of the brand. In adversity lies opportunity. It is my belief that so long as we don't allow our feelings to overcome our logic, that bitcoin and BY EXTENSION it's holders will not only survive this, it will become stronger. Mtgox is not bitcoin, much as some of the media would like it to be. It was a corrupt and incompetent company that traded in bitcoin.

It was only headed by bitcoins early adopters and sat on the board of the TBF which san be considered to consist of the same incompetent corrupted staff

which hopefully will caught red-handed as most of the loot was not gotten back from Madoff but from the PONZ-Pass through operators !

Those gains of the pirate@40 scam are in the hands of the scamming MODS of this forum as well....BTC is fucked in the hand of scammers.

Why baby ? Why all will go for the early adopters. When one newbie loose his/her BTC from a web wallet, u guys do big talk about naive the newbie is. Now u have been Goxed and u want authority intervention ?

No....just asking if the authority is not thiefing themselves and as they do obviously- BTC is a death struck PONZI itself....no fresh blood to be expected for a long time to come....

http://www.marketoracle.co.uk/Article44588.html

Amen. Thanks for your wise input. There's a saying: "The smart learn from his own mistakes, the genius learns from others mistakes". I too have had big monetary losses in the past. It was painful, but I did learn from it.