Bitcoin Forum

Say, I pay someone using Mtgox withdrawal and see the payment getting filled by the following address:

http://blockexplorer.com/address/16eRAfcohaLsTzoDSnLejjqMZMDQezxFEi (http://blockexplorer.com/address/16eRAfcohaLsTzoDSnLejjqMZMDQezxFEi)

What the...? Shouldn't such sums be in cold storage? That's something like 5% of all existing Bitcoins in a single key, who will pay if that key gets stolen?

Edit: hell, didn't Gox have "lol Bitcoins sent to null" before? That transaction transmitted the whole bunch of them, imagine a software error occurs there! Yes, the transfer happened with neat speed, quite fast for an operation that I would manually check if I was in the position of operating on more than 400k BTC.

That's their job. Anyway, how is it possible to withdraw that many coins? Isn't there a daily limit?

LOL ;D

I didn't send the fortune; that was the "change" from my order, and it hopefully stayed with Mtgox. If you look at the transaction, there's 500 BTC going another way, that was the payment.

Hehe, I must appear to be quite the rich guy if you thought I withdrew 437k BTC and made a funny thread about it. ;D

It does seem somewhat imprudent, but it's their business, not mine

We should all be aware that if this goes wrong, nobody can expect to see their BTC on Mtgox again. They can't dig up >420k BTC from nowhere, it's beyond their capabilities.

The moment this key leaks, Mtgox is history. One little string to end it all.

Those coins are moved constantly.

Well played, sir

What if mtgox screws up and sends all those bitcoins to the null address like they did with 2000 BTC a while ago?!
:O

Then all our BTC are instantly worth more?

Unless the majority of your bitcoins are among those 437k.

I really think losing that much would be truly devastating to the economy, if not bitcoins themselves.

In my estimation mtgox has approx. 10k active users, which means an average of 43 BTC per user. I suspect that a large part of that 437k belongs to day traders, who are well aware of the risk.  After all they continue to use mtgox even after being goxed several times.  They are the only ones who stand to incur big losses.

The typical, non-speculating mtgox user would probably only lose a handful of BTC.

I lost a handful of BTC with mybitcoin, which was annoying, but not the end of the world.

yes, should be  ::)

don't see any traffic on that address now, though.

I just hope that if that if 437k were to be lost, that people aren't using mtgox as their personal wallet.

what a terrifying prospect... and it's entirely possible. This is mtgox, after all.

So, let's say 470,000+ BTC go MIA forever...should result in a nice little price increase.

On a related note, how do we know that 1,000,000 BTC haven't already been lost forever?  Is there a way to know exactly how many BTC are in circulation and not just how many have been created?

No.

We don't. Fun fact, a lot of the first 1.000.000 BTC created have a good chance to be lost, since back then they were almost worthless and lot of people just mined some and then uninstalled the software

I can personally attest to this... played with it a bit in late-ish 2009— but since Bitcoin was GUI only it was a pain to use and I didn't bother understanding the technology early, I thought is was some typical p2p crap that is super vulnerable to sibyl attack, on so I didn't realize that it actually had a chance.  Lost interest and sometime later wiped the machine to upgrade the OS.

But mining and computers were also slower back then, so if you're guessing how much someone would have just based on the fact that it was difficulty 1 at that point you're probably assuming too much.

1) Why do we need to know this information?

2) The market determines the value based on buying and selling.  Whether or not there are 1,000,000 BTC lost or not doesn't matter, b/c the supply & demand of the market will still even out.

This the same thing as stating that the federal reserve doesn't know how many US dollar bills have been lost.  It has an effect, but is evened out by captial markets anyway.

To the extent someone would "find" a bunch of coins and choose to sell them, it would hurt the price, but the market would even out.

We probably will never notice that X coins were lost. (except in the case of coins sent to null addresses) They never truly leave the network. I suppose you could check block explorer to find addresses that have been inactive for a long time. There's no way you could no for sure if they could spring back up though.


Well, it wouldn't take someone to find old coins to decide and dump the ones they did have.

What do you mean by "The market would even out"? Are you saying that it would return to the previous trading price? Or that the prices would eventually stabilize at some amount? If it's the latter, that much is obvious.

That is kind of disturbing. It is like a bank having all it's cash in the teller's drawer instead of in the bank vault.

Knowledge of the market affects supply and demand.  If there's the possibility that 1 out of every 21 Bitcoins that can ever be created is lost, that's a huge piece of information that drastically affects the way I trade.

like how? please elaborate

Um. The same number of coins have been made each day since the beginning.  It doesn't matter that the miners were slower because ALL of the miners were slower. There were also fewer miners back then and so less people to distribute the block reward to.

And I agree that those should be stored offline.

I followed the blockchain back and found 500,000 BTC at one address, consolated from 50,000 BTC inputs

http://blockexplorer.com/tx/29a3efd3ef04f9153d47a990bd7b048a4b2d213daaa5fb8ed670fb85f13bdbcf

Question: How do ANY of you know that that is the full amount deposited on MtGox?  You all keep talking as though this is the entire MtGox fund?  What if the cold storage is 1M or 2M BTC, and this is just the amount they like to keep on hand to fill withdrawal requests?

We never said that the address contained the entire MtGox balance, only that is a large balance.

Only $1.5M worth.  It really wouldn't be that hard for MtGox to cover that amount at this point, I think.  They've made bank on trading so far...

Except, how are you gonna buy 500k bitcoins?  MTGox only has around 190k on the order books, and that would jack up the price significantly, making it prohibitive to purchase them. 

They wouldn't have to buy them all at once...

I don't think they would even try, more likely they would reimburse in fiat. 

If someone stole 500k BTC, they'd probably start selling them immediately.  So the thief sells, MtGox buys, the price should stay *relatively* stable, and everyone goes on their way.

Probably though, MtGox would reimburse immediately from their cold storage, so their customers would not have to wait for this action to happen.

Well let's hope we never have to find out. 

No that's not true. Satoshi set the initial difficulty of "1" so that it would generate less than 6 blocks per hour. He didn't want to generate a lot of blocks until more people got involved.

I can't remember the starting rate, and I can't find a reference to it right now, but I'm pretty sure it was less than one block per hour.

After a while, there were enough people generating that "6 blocks per hour" was reached at the starting difficulty of one, and from that point onwards the difficulty "auto-adjusted" to try to maintain that target rate.

Right, well, it was at full rate at the excitement of the initial announcement but soon fell far below one block an hour and stayed there for pretty much all of 2009.

The area under the red line is less than one block per hour, and this is a log scale graph:  http://bitcoin.sipa.be/speed-ever.png

How many coins were generated during that time?  And how many people were mining?

I think my original post would be more accurate if I had said "The same number of coins have been made each day since the time people started caring about bitcoin" which might as well be the beginning.

5000 BTC of this ended up here and is still there:

https://blockchain.info/address/1HB2nvhVp8KweLj3gUEZrpDBiCqGv8GBan