You need to examine the possibility of this being meatspace theft.

You said something about a work computer.  A co-worker with a keylogger would have defeated an encrypted wallet (he'd have the encryption password).  Get over the encrypted wallet thing.  Also not windows fault.

You don't know that this was a due to a windows exploit.  As for an old wallet.dat file on some internet host?  Possible.

Meatspace is more likely.

It seems to me that you are imagining internet boogiemen and pimply faced russian script kiddies and placing your fear on windows exploits and unencrypted wallet files.

Sounds to me that you are much too trusting of people you meet in meatspace, because your fear is placed in the unknown in cyberspace.

None of that matters in a meatspace attack.  Physical access.

You told people about your BTC activity.  Meatspace.

Work computer?  Meatspace.

My point is that you don't know if it was a meatspace attack or a cyberspace attack.

But if it was a meatspace attack, you'll have a much better chance of tracking him there than in cyberspace.

It might be somebody you work with.

I'd be equally suspicious of an inside job (someone in meatspace with physical access to your computer).

If it was a trojan or malware theft, they probably would have already deleted it remotely.

Call your ISP and try to get logs of all of your activity.  Maybe you can trace it to a proxy or C&C server.

If you don't see any suspicious activity in the ISP logs, then start interrogating your friends or friends of friends.  But don't lose them over this.  Some are trustworthy but trust nobody.  Maybe it was a stranger down who found out through the grapevine of your BTC activity, and walked in your dorm room while you were on the pot.

I sympathize with you.


Don't get stuck in the past.  I know its no comparison, but I'm sure any trader is kicking themselves for not selling at $30 and buying back at $10, (triple their holdings).  Many more traders are probably kicking themselves for selling at $10 and buying back at $20 (lost half their holdings).

Move on.  If you were rich once you can get rich again.

Move on.  It is hard to get rich trading.  Start an exchange.  MtGox once again having technical problems.  With the volume of BTC moving, wouldn't take much share of the trading volume to start making $2k per day.  After 10 days of that you'd have it back.

Move on.  If you let this stop you, it will.  Shit happens.  Some people were overnight millionaires because they started mining in 2010.  I knew of bitcoin then.  Why fall into a deep depression for not being an even earlier adopter?  In retrospect, its the same thing as losing coins.

Don't live in retrospect.  Will be very hard to move on.  BTC is still a wonderful opportunity.

My bitcoin will get me dollars, a lot more dollars than I paid for them (at the moment).  Maybe others are not so lucky.  They should probably just wait, like I did.

I would see your point if you think the string of numbers in your paypal/dwolla account, or the string of numbers of on your bank statement are equally useless.  I guess for some people it takes a leap of logic to understand that there are some strings of numbers which can get a person a lot of Coke Zeros.



What a multi-polar world.  Bitcoin proponents are greedy geeks peddling a crypto-scam.  Bitcoin buyers are foolish speculators with less sense than five-year-olds.  And bitcoin detractors can't read on an elementary level.

Which brings me back to bubbles.  Bubbles burst when they run out of foolish buyers.  So by the bubble analysis, the bitcoin bubble has less to do with the supply and demand of bitcoin and more to do with the supply and demand of fools.  When the supply of fools exceeds the demand, the price of BTC goes up.  But when there's no more fools to sell to (demand for fools exceeds the supply), BTC crashes.

Therefore, anyone predicting an imminent crash of the bitcoin bubble believes the world will soon run out of fools.  But the only thing on which everyone can agree, is that they are all fools.  

What a paradox.

You can buy dollars with BTC (repeat this to yourself 10 times).  Sometimes you can buy more dollars than you paid for them (which is the whole point of buying BTC).  Sometimes less (cut your losses or wait it out).

This ability means BTC is not your average virtual currency (Liberty Reserve, PayPal USD, facebook credits, amazon gift cards, WoW gold, iTunes points, smurph berries, farmville pigs, zynga poker chips, etc. etc.)

And FYI, this is the fundamental backing bitcoin: http://bitcoin.sipa.be
(not the number of bitcoin merchants)

It was a heck of a call, if a little premature.

Weak hands being shaken out now.

Dear buttcoin.org,

Nice effort.  It is a funny drama, I have to admit. 

And thanks for bursting the bubble.  A lot more could've gotten hurt (or rich).

Now permit me to add something about bubbles?

Quoting you: "Oil hasn’t crashed (it did, also in the 80′s)?"

And in 2008.



Bubble come, bubble go.  and Bubble come.

This is not the last you've seen of the Bitcoin Bubble.  Lucky you, you'll probably get the chance to do another "told you so" dance in the near future, when BTC falls from $100 to $30.

Of course, I could be wrong.  But the market will be right.  At the least, we can agree on that.

I would contract the CIA (or whoever) to make the operators of the largest exchanges "disappear" and leave all bitcoin users with the impression that said operators ran off with everyone's money.  Any new exchanges would have already lost all trust before they even opened.

Sorry, sometimes I say difficulty when I mean estimated difficulty, or projected difficulty, which like you say  is just the network hash rate (in a different unit of measure).  I prefer to the use estimated/projected difficulty because the actual difficulty factor lags by 2016 blocks.  Its like a view into the future.

It is hard to do a realtime ratio chart because the difficulty is hard to estimate over short intervals.  Less than 3-day averages and it is quite choppy.

But it is a back of the envelope calculation which is quite easy to do.

Look at the difficulty chart: http://bitcoin.sipa.be/

Even with the price crash over the past 48 hours, the 8-hour difficulty estimate (at the moment) is rising to touch 1.2 million.  The 3-day estimate is nearly 1 million.  By the historical ratio, $10 dollar BTC is 1:1 and way down in the bargain basement.  Would have to reach a weighted average below $7.50 to set a new record low.

Unless price suddenly recovers, the next weeks will test the theory that difficulty is a fundamental indicator which can drive price, for the second time (first time was the previous low in March).  Will it follow the 50% or greater drop in price, and enter a negative feedback loop?  Or will it stay and support a price over $10? 

Everybody that sold has a lot of USD sitting there (this time I'm not one of them, unfortunately but true to my name for once).  Either the sellers are just waiting for the bottom before going back in, or they are cashing out their millions to leave the latecomers holding the bag.

If there are bitcoin believers, they will keep their rigs mining.  If there are none, we'll be seeing a whole lot of used gaming machines go on sale.

Even if the site is broken, they are still scraping 1.3% off every trade.  When daily volumes are 2 million USD... well let's just say they can afford the lease.

Not to say that MagicalTux won't regret placing high priority on moving into a luxurious office, while letting his customers do the load testing.

Now that BTC has stopped going up for a minute, maybe more wise entrepreneurs will realize that investing in competing exchanges could be more profitable than buying BTC on mtgox (when they aren't experiencing technical difficulties).

Amen!

You are correct, the purchasing power of bitcoin will be more stable when it stores a significant share of more people's value.

But remember that even today the purchasing power of the dominant currencies fluctuates significantly year-to-year (anywhere from 3%-10% depending on the estimate).

As for the fact that greed is what is driving the interest in trading of bitcoin, it will significantly speed up the adoption of bitcoin.  Which is good for every bitcoin user.

I agree.  Price and difficulty are correlated indicators, with price leading and difficulty lagging.  Lagging indicators "confirm the strength of a trend".

The empirical data shows correlation, but there is no control group with which to perform an experiment and determine the causal relationship.

When the difficulty rises to support a higher price floor, difficulty is effectively driving the price.  By this argument, the causality goes both ways (two-way causality).

Yes.  This is correct.

The only suspects who would be motivated by profit to DDoS a pool would be a competing pool.

MtGox's Websocket API is down.

I can't tell if this report at cnsnews.com is accurate, especially the figure of 97%.  No sources cited, and I couldn't find this story anywhere else (I didn't spend too much time looking though).



Yes it is affecting American's lives.  How much, depends on which American.

Most of the inflation here is in gas prices.  Much of America is rural or suburban, and spread out, so it is not uncommon for someone to work one hour's drive from where they live.  That's two hours commuting each day.  And a lot of Americans have trucks, which have low gas mileage.  These Americans are hurting, because when gas goes over $5 per gallon and they have a long drive, now they are spending 30% of their paycheck just getting to work and back.  And now it is hard to sell their truck to get a car with better gas mileage, because nobody wants to buy a truck with low gas mileage when gas is expensive.  Also, with high gas prices, fewer families drive anywhere for vacation, which hurts people employed in tourism industry.

The other thing inflating a lot is food.  But for Americans with steady work who only spend say 10% of their paycheck on food, they can absorb the cost.  Unemployed and poor Americans might spend 50% of their paycheck on food, so this makes life much harder for them.  People so poor they don't have cars obviously aren't much effected by the gas prices.  But the working poor who need cars to get to work, they are really struggling to pay for the rising cost of food plus the rising cost of gas.


The only thing getting cheaper is housing.  Since the housing bubble crashed, houses are relatively cheap.  Rich people who were invested in real estate lost a lot of their investments (screw them - tough luck).  Then there are the average people who took out loans (a mortgage) to buy a house when they were overpriced.  We can separate these average folks into two camps:  those willing to foreclose and those who will not foreclose.  The folks who are willing to foreclose can cut their losses and move on.  Actually, foreclosing can even be great for them because after they file for foreclosure, it can take over a year for the bank to reclaim the house.  In the meantime, they are living in the house for free (not paying on the mortgage loan nor any rent).  News has written about this free "squatters' rent" being beneficial to the economy.  Then there is the second camp of folks not willing to foreclose because it will ruin their credit.  If their credit gets ruined it makes it harder to get loans to buy new cars, a loan to get a new (but cheaper) house, etc..  So because they value their good credit rating and refuse to foreclose, they have to keep paying down their over-priced mortgage loan.  The only way out of that for them is to sell their house instead of foreclosing.  But selling a house is difficult, which brings us back to why houses are cheap.

This is not certain.  When difficulty is higher than the price, coins are cheaper to get by buying than by mining.  So people buy, which pushes the price up.

Ergo, difficulty drives price.  And price drives difficulty.  Two-way causality.

I posted this here:
Time for a hater sub-forum?

I think there should be at least a couple 'skeptic' subforums.  A bubble subforum, and a deflation subforum.

Obviously, the higher bitcoin goes the more of this we are going to see.  Skepticism is welcome, but its getting a little redundant.


Best retort in the fewest words.

I'll explain my perspective not for the sake of the market (which is obviously doesn't need my promotional efforts), but for the sake of the skeptics.

The earth-shattering, paradigm-shifting event that is sending the price of bitcoin sky high is (wait for it..): the adoption of bitcoin.

Bitcoin.  decentralized, p2p, secure, digital tokens.  Once you have bitcoins, no authority can seize them from you.  They are yours forever (barring any undiscovered vulnerabilities, of course, and you still have to protect yourself from theft).

Paradigm-shifting.  This is not Just Another Virtual Currency backed by some dot com that you can't redeem for dollars.  So it has nothing to do with what goods you can buy.  Because with bitcoins, you can buy dollars.  $1 dollar three months ago.  $22 dollars today.

And with dollars you can buy goods.

EDIT:  P.S. Network difficulty is the primary fundamental backing bitcoin: http://bitcoin.sipa.be/