Bitcoin Forum

Pfft. Not me. I am buying as many as I can. This is bullish! To the moon!

I got the hell out...

For now.  ;)

I shorted as insurance to cover my holdings

Nice. Already in the green.

The question I am now thinking about is how low will it go? I will easily wait for < 4USD per BTC.

This, ideally, is what I want to see...

You make a good point but would not a smart guy realize the price would go down a lot
and wait until then?

Also when you create a website like he did that caters to people who want leverage... and
you have a lot of newbs join who never used leverage before.. it must have been a huge
windfall as they lost 2-100 BTC in bunches just learning how to use the website/shorting/going
long/etc...

But this is just speculation. You made an excellent point.

I don't think the hacker(s) would sell right away as it'd be easier to catch them maybe?

Maybe. But if it was me i would have no problem mixing them up by sending them around and testing the waters by selling 500 here and 500 there over the next several days. Then really start unloading. Keep in mind all the other hacks no one was caught...

Except moving all my money to my bank account.  I didn't do anything.

It was to be expected that speculators are going to short sell like hell after the hacking event and that is pretty much the only reason we had a price drop now. This is very understandable.

I'm here to remind the long term players what this recent event means.

First of all, once again no regular Bitcoin users lost anything. Thanks to Slush and Zhou they are the only ones who lost anything. This proves once again that there are legitimate and trustworthy people in the Bitcoin economy, not everyone is out there to scam people.

Second of all, this will lead to much more secure Bitcoinica and all other service providers in the Bitcoin economy will be worried about this particular type of attack which is something we haven't seen before. I hope everyone remembers what happened to Mt. Gox a while back and how it affected them - they have really boosted security ever since. Mt. Gox is the biggest exchange and by far the biggest target, and they've had no issues whatsoever after the infamous hack.

And finally, the third aspect of this is that attacks like these can be made near-impossible with multisignature support. Gavin wrote about this in his blog (http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html) and explained how it would work for the faucet. It's true that encryption alone would've helped in this particular attack, but multisig would make any attack very difficult to pull off. I feel that the pressure from this event could be enough to finally get multisig into Bitcoin.

That's it. My conclusion is that for the long term this event is actually positive for Bitcoin, not negative. That's why I will call any further drops an overcorrection. That means that there still could be a drop but we will bounce back once people chew on this thing a little more.

We're going back to 4US$ it seems. Not a big deal IMO. In fact prices seem very stable considering that some of the biggest names in the Bitcoin community just got hacked (including Bitcoinica, Slush and Gavin).

I don't have a position on bitcoinica right now, but I am out of BTC on MtGox.

This is true but I think it's because every sane person understands that this event truly is more positive to Bitcoin than negative. Selling only makes sense in the short term because a price drop was to be expected.

The one to blame for the hacks is Linode and people should start one hell of a shitstorm on them, not Bitcoin. Each and every server at Linode could have been compromised, there was access to everything. They attacked only servers running bitcoind, though. Regardless of that the issue is mainly with Linode, not Bitcoin.

Of course the security that Slush and Zhou had requires more effort, for example Tradehill was also hosted at Linode and they still have a lot of BTC. Tradehill lost none because they had more advanced security systems.

This event does nothing to undermine Bitcoin, it simply puts the security issue in the spotlight where it should be. Bitcoin can be used in a secure way but it requires significant effort. Multisig would make it easier to implement secure systems and this will probably help in pushing that feature through as well.

I won't even mind answering Blitzboom, if that is truly what he thinks I can only assume that not everybody is thinking logically.

Then you have no clue about markets, no clue about economics, no clue about social dynamics and no clue about what currencies are built upon.

I’m serious.

I'm confident that I have more of a clue than you do. This event is negative in the short term, that much is obvious, but in the long term it will clearly help make Bitcoin more useful and more secure. If you disagree with this then offer logical counter-arguments, but wait, you never do.

Did it ever occur to you that the long term consists of a bunch of short term timeframes?

Currencies are built on trust. Trust in the money supply, trust in the acceptance, trust in the institutions that handle it. Trust in its security (NOT technical security, but actual, practical one).

Bitcoin’s value is built on speculation and projection into the future. Speculation that it will get more popular, be more trusted, more useful.

We know there are 4 out of 8 people who lost ~50k BTC to a malicious attacker. We know that there is no way to prevent the coins from eventually diluting ours, one way or another. (Except the attacker is stupid to have MtGox intercept them directly, haha.)

We know that no matter what the HELL we do, someone’s coins always get stolen or scammed and dilute our honest coins. We cannot trust in most Bitcoin institutions.

I bet Bitcoin is the currency with the highest percentage of stolen money supply. How can an economy run like that? How can it be BETTER than a negative sum game for all honest participants?

I'm short now, but that's because I think the whole situation is bearish short-term. Long-term I'm still bullish, for reasons you stated.


Every operating system (Linux/Unix included) had many major, critical security flaws that cost many people a whole lot of money. Yet, people still use these operating systems, because eventually all major holes were fixed and now they are more secure than ever.

I honestly think this is going to devolve into another long, painful price decrease; and as said not too long ago I think continued distrust and more cost efficient mining will keep the price down.

This post is much better, thank you. I just can't think the way you do about this, no matter how hard I try. My own bitcoins are just as safe as they were before this event. My company which deals with bitcoins got a good wakeup call from this and will make sure that it doesn't matter if our hosting provider is totally compromised, we won't lose any coins regardless.

On top of that I see Bitcoin protocol security, service security and user security all improving thanks to this. This might be negative in the short term, even mid term but I see this as really important for Bitcoin long term. This would have happened one way or another eventually anyway, now it's over with and we can continue to work on better security.

I don't buy your claim that Bitcoin has the highest percentage of stolen money supply, that is preposterous. I think that a very high percentage of our dollars/euros have been part of a theft or a scam at some point. With bitcoins it's very likely that the amount of scams and theft will always be much lower than with regular money, simply because bitcoins are not something meant to be trusted to a 3rd party. Everything done in a pure Bitcoin economy requires people to be VERY suspicious about everything, leading to much less stupid usage compared to the regular economy.

It's a sad reality that people are so susceptible to scams and such, Bitcoin is there to teach people. This is one one of those roadblocks on that very long road that teaches people how to take care of their own money. I honestly can't see how this changes much of anything, Bitcoin is different than regular money, it's hard, it's cold. It's currency of the free market. As soon as people REALLY start realizing this first hand, the sooner it will become more usable.

I agree with you that bitcoin's security (of the protocol and infrastructure) will improve as a result of this.  But I don't think that can be construed as bullish for anything other than the very, very long term; and out that far it's just a fact that anything can happen so as far as making decisions here and now it just doesn't enter into it.  We're going down, there's no question about that.  How far and for how long are the only variables, as far as I'm concerned.

Distrust maybe, but mining dynamics simply don't work like that. Difficulty will just adapt to the new equipment really soon. In fact, making predictions about mining is really hard because of all the variables involved - but we do know how many more BTC will be entering the market in the next months perfectly well.

Sorry for being rude, Technomage. I think it’s because I myself was the same during most of summer, and then I kept catching the knives without selling the actual bounce, bleeding USD on the way down.

That just leads to less usage at all, really. :( I agree with you that on a long-term basis this is probably "healthy", but I’m not made for that timeframe. I like mid term.

Proudhon, I tend to agree. Still, I will probably catch some knives. It’s inevitable. I’m too long-term bullish.

You know I did the same thing and I'm intent on not making that same mistake this time.

Well, I think I have learnt to drop the hot potato in the right time and make some USD even. Do you have a good idea to determine a reversal and yet not lose too many BTC?

I really wish I could make use of Bitcoinica. MtGox needs to offer options.

I agree that the fact that Bitcoin is such a hard currency is a large barrier of entry to any mainstream markets. What I love about Bitcoin though, is that there is always a choice. It's perfectly possible to have what the banks provide, what PayPal provides and what Visa/Mastercard provides, on top of Bitcoin. In fact I already see Mt. Gox as a bank of sort, a large portion of the Bitcoin community trust them and are willing to let them hold large amounts of BTC/USD/EUR, at least while they trade.

So it's not like Bitcoin is going to be used only as a hard currency. It will become softer in many ways once we have more established and truly trustworthy companies in the Bitcoin economy. What I love about it is that there is always a choice to use it the hard way if you don't want to trust any third parties. That's what makes Bitcoin great.

Well, last time I bought back in at around $2.45 and I did so because of the volume of selling at $2 and subsequent days of buying that followed.  But, to answer your question directly, no, I don't have a good idea to determine reversal.  I'm just going to try to be more patient this time.