Bitcoin Forum

So, obviously, criminal-minded hackers are abusing the bitcoin economy by way of these DDoS manipulations, reaping profits for themselves while bringing down exchanges, market viability, public perception. Like gangsters they only care about enriching themselves and give no thought to running their victims into extinction in the process. Nothing new here, crooks is crooks, but this is my thought...

The hackers seem to be attacking the exchanges separately, targeting them at random times. Each exchange seems small enough to be vulnerable, yet the the entire bitcoin economy would be too large to effectively manipulate as a whole (unless they keep running it down like recently, then eventually even its entirety will be diminished to an easily manipulated size) Conversely, no one wants to see a single centralized exchange, and the idea of a decentralized p2p exchange is ...  I don't know enough about this to know if it is even possible? BUT... here's an idea, maybe I'm missing something (or many things), but what if the separate exchanges entered into a sort of agreement... like they could pass the traffic from one to the other, when under attack, and keep the trade moving despite all these random attacks. The idea of a safety valve/co-operative agreement whereby exchanges A, B, C and D agree to carry the locked out volume for each other whilst any one of them are being targeted. i.e. MtGox is getting DDoS hard, so they pass all traffic to the other exchanges, and vice versa. I know this might seem far-fetched, like why would they give business to their competition, and all users would need to be registered with every exchange, not everybody trusts every exchange (or any for that matter). There would have to be a huge leap of faith, and some sort of unifying bond or agreement. I don't know how it would look if it did exist exactly, but the idea of forcing the hackers to have to spread their resources so thin seems like a ok idea to my n00b brain. These gangsters are just going to get richer and stronger, and they will steal everything until nothing is left.

So I guess the TL;DR is "united the exchanges will stand, divided they will fall."

Maybe I'm hopelessly naive, maybe this resembles the "central Bank Authority" too much, IDK! Go ahead and have at me. We need to do something because every attack seems to come with the reply from the exchanges of "we have got it all under control and are working to make everything more secure" then 12 hrs later BOOM! Another DDoS and some Russian Mobster gets that much more millions of dollars to launch that much huger a DDoS next time (like a few hours from now)

No you are definitely not missing anything. Look up National Best Bid and Offer (NBBO) on wikipedia or wherever. The kind of arrangement you describe is actually mandated by law in the US. between broker-dealers, although not in the DDoS context. But low-liquidity is basically the same thing as not being able to provide quotes to your clients for technical reasons.

I suppose the exchanges would have to agree to a similar pact unanimously, AND in a transparent manner. I'm studying that NBBO wiki now! cheers!

The only answer to all of this is a completely decentralized exchange. Peer to peer, like bitcoin itself.

All other answers automatically fail.

So who wants bitcoin to survive? Get programming.

Just eliminate day trading. Let FOREX do that. Only allow brokers to use exchanges like mtgox. QED.

One word: Adapt.

It would be the logical first choice. I am no coder, but someone who can deliver, and puts forward a workable model, I would help fund such a thing.

+1

Bitcoin is decentralized and making it centralized in markets is probably not what Satoshi visualized. Decentralized markets will make a "central point" of attack disappear. :)

satoshi left bitcoin long ago because he facepalmed at you greedy mofo's who only care about how much usd your bitcoin is worth.


read his lasts posts

I love all this DDOS stuff. I would love to be a fly-on-the-wall at Tibanne, Inc.

I just hate seeing crooks run all over nice things like they do. I'm startin' to feel that satoshi guy now.

I might be shooting from the hip here but it seems like as long as all the major exchanges make themselves "gateways" what you describe and desire is called Ripple.    Am I Right?  Note: I'm not particularly wedded to the idea of Ripple, it just seems like what you describe fits that bill.

If you do that no one will buy Bitcoins. Honestly day trading cannot be eliminated and isn't the problem.
The problem is lack of infrastructure to support it. Blaming day trading is like blaming miners when in reality day traders are an important piece to the puzzle if Bitcoin will ever be a success. Perhaps Bitcoin should regulate itself through it's code or perhaps decentralize.

Hopefully as more and more exchanges become active and/or gain a bigger market share, attacks against a single entity will no longer be effective in driving the price one way or the other in sufficient enough amounts to make the effort pay off for the attacker.

In the meantime hang on tight, it is going to be a wild ride as long as MtGox controls 80% of the transactions.

Without "day trading" you don't have price discovery. And you end up with 20% differences in price on various exchanges. (And a great arb opportunity but that's another story.)

If you want stability, you need fast movers.

Ummm... I may be being naive, but why should we care? Those that are prone to panic when faced with a DDoS lose some fiat value, by selling in a panic. Those who ride it out come out the other end with the same number of BTC, worth about the same amount of fiat.

It's a non-problem, AFAICT.

Is, or is not, the bitcoin system antifragile? If not, we need to revisit the drawing board anyhow.

Discalimer: I am unconvinced that these 'DDoS attacks' are not merely traffic of real humans driven by sudden collective interest. Maybe, maybe not. Just sayin'.

The NYSE is not directly open for public trading. They must go through brokers. Electronic trading does go through faster, but the brokers' trades get priority. My point is that competing brokers are better able to handle trades that stabilize price and mitigate abuse on the system. I think Mt Gox is starting to see this and will eventually only allow verified traders and eventually only qualified traders.

I love the term price discovery when used on a virtual currency. Price is not so much about discovery as it is fiat. There is more psychology to the price than observable utility. One does not simply discover Bitcoin price. There is a better way to realize the value of Bitcoin, and that is through its actual use. This is not addressed by trading on only an exchange. Too much trust is given to exchanges. There is way too much opportunity for exploitation, abuse, and manipulation.

Bitcoin does not have enough velocity to be considered a currency...
It was designed as an exotic, rare commodity meant to enrich first adopters.

The only way to price exotic, rare commodities is through dealers or exchanges.

The solution is to have 100s or 1000s of exchanges...
And they are coming fast...
Because at $1 billion cap it's finally worth it for financial Market Pros to get involved.

Yes, they are. I am glad to see someone say this finally. :)

I would argue that you would rather have brokers run "immediate exchange windows" than force brokers to use mtgox.   I would rather do my trade with someone who has a book and can cover my exchange immediately with his reserves.   ie.  Someone that has committed a float of capital (his investment in his business) to allow him to either take fiat or BTC and immediately give you the other side.   and only uses the exchange to balance his book when he needs to.   That would stop the panics you have.   That is what wall street broker/dealers do in times of panic --- they commit capital (and take risk) to keep the stock trading.  Those are the people I want to reward with the spread on my trade -- the people that are fully capitalized and can keep making a market without have to constantly trade it out on an exchange.

Solution is cutting the reliance on mtgox and/or developing technologies that will mitigate ddos attacks.

I honestly don't think this is much of a problem at all. People are beginning to respond to the volatility by refusing to buy into it (or by attempting to profit from it.) Panic sells are diminishing in volume just as market depth is building on either side of the current price. This creates stability in prices.

Essentially, the people who tend to panic are also those who don't have long run faith in bitcoins as a currency, and they're either being driven out of the market or taught a costly but valuable lesson in order to stay in -- that lesson would be to stop trying to be a day trader.

So oddly enough, these attacks are probably very healthy for the long run stability of bitcoins, and that is what better enables the use of bitcoins as a unit of account. By the time the infrastructure is built up enough to handle these attacks, the attacks themselves will cease to be profitable to those engaging in them.

The funny thing about DDoS attacks is that you need an IQ of 80 to execute them and an IQ of 90 to prevent them.

We need an exchange BUILT IN to Bitcoin-QT (and FULLY supported by the bitcoin protocol).

I wouldn't go so far as needing an entire exchange in a client because the client can only handle Bitcoin and not other currencies. The client can provide the information needed by a pricing overlay network. The information can be statistically analyzed (throwing out extreme deviations) with the average price result recorded into the block. This is what can be used for product pricing.

Exchange prices would not require adhering to the current block recorded price, but would be psychologically influenced by it.