Getting some terrific action at the moment.  Would be a terrific burn-in of the new code (if it's in yet.)

I'm glad you are not the moderator.  Did you read the rules?  There seem to be none (refreshingly!)

The speculation board is all kinds of fun to watch and good for a cheap laugh when I am in need of a break.  Mostly it's just people trying to manipulate public perception to their own benefit...and probably with less success than they might be thinking they are having.

OP:  Your scenerio actually sounds to me like a much closer match to capitalism.

The main real difference I see between $/gold/whatever and BTC is that with Bitcoin, it is a handful of clever peons rather than a mass of ignorant ones who do the work.  In both cases, a bulk of the wealth ends up in the hands of a few who do little or nothing particularly useful.

Not enough said at all.  A DDOS would typically somewhere between unnoticed and terminal for a gateway machine, but I would not expect that in any but the most primitive of architectures that would have any impact on their back-end machine(s)...except to free the backend machines up from some fraction of trades (from people/bots that could not get in) and allow them to run faster.

Whether they are using MySQL, Reddis, or whatever for their processing engine, I cannot imagine that it is subject to failure of their gateway machine(s).  If so, that's mighty sad.

It seems to me a bit difficult to understand how a DDOS would impact an exchanges ability to make trades on their books.  Or even publish their books for that matter.  My guess is that they must be scrambling to rectify balance issues associated with some of the other money problems over the last few days.

I think that it is perfectly appropriate and expected that people will postulate about issues on non-official message boards which are considered unimportant enough by the exchange to not bother participating in.

I just put in a pretty big and very low buy order on another exchange just in case MtGox turns out to be the next big domino in the string of Bitcoin enterprise misfortunes...So if TPTB here wish to move this to speculation, knock yourselves out.

Sounds like the best bang for the buck is to co-locate in the same datacenter.

I'm buying again.  Got various bids in at different levels.  Just waiting for another shakeout like a few weeks ago to see if they get hit again.  I missed my big purchase by about 40 cents last time.  Oh well...maybe better luck next time.

I personally see Bitcoin as being most useful as a 'reserve currency' of sorts.  I think it would be most useful as backing for a myriad of alternative currencies each with different inflationary properties, transaction fees, etc.

The alternative currencies would compete with one another and win or lose based on the usefulness to the users, and exchanges can easily keep track of things.  The bitcoin backing the alternatives would rise or fall in value accordingly.  This would produce a situation where the holders of the backing currency would be induced to use it in a way which benefits the users as well.

I believe that we are approaching the end-of-life of our current debt-based monetary systems and for a probably brief transition period will have a non-debt-based currency. Relative to Gold, I prefer bitcoin in the role of a reserve currency.  The reason why is that if the reserve currency is abused to huge degree, and it is bitcoin, a majority of real users can render it useless by updating their software.  This cannot be said for Gold which is inevitably hoarded and abused (and very difficult to shake out of the hands of abusers.)

These are, of course, my own personal thoughts on Bitcoin at the present time.  I realize that they do not match the thoughts of others.  I did not formulate or develop the Bitcoin solution.  But then neither did almost any of you.

Traders use exchanges to transfer value from someone else's pocket to their own...and good ones succeed.  The flip side is that a fair fraction of the user base needs to be able to be induced to lose money.

Sounds like Tradehill, for whatever reason, simply lacks the user base that you traders are after at this point in the game.  If I were a trader I also would be looking for greener pastures.  Sad day for Tradehill, but it seems that they have recognized the problem and are diversifying.

As a BTC accumulator (at present) Tradhill has proven to be a reliable playground so far.  IOW, I have gotten what I wanted, and usually in a timely manner.

If I don't send BTC to someone's address then it would be difficult to prove that I did and pester me about my connections with the holder of that address.  This redresses some of the deficiencies of Bitcoin relative to cash.

If a wallet.dat (encrypted) got on to a lot of people's computers somehow, and I got the password to whatever entity managed to provided me with something that I wanted, it would be cumbersome and expensive to trace the relationships between different individuals.

A reason I am sensitive to issues such as these is that I believe that in todays world there is a huge amount of effort expended to track individuals and the relationships between individuals.  In my opinion these efforts either starts out unhealthy or rapidly becomes that way.  The damage that can come out of such databases is, to me, a much greater threat than 'terrorism' most of which is, I believe, pretty phony.

To those who worry about someone retaining a copy of a wallet.dat...

I expect that at some point I may pay someone by giving them a wallet.dat  (or access to a wallet that they may already have whether they know it or not.)

I would not expect it to be a major problem that I may have kept a copy.  I would expect that the recipient would immediately open the wallet and at least verify the addresse(s) in it with block explorer, and they may as well go ahead and empty it at that point in whatever way they choose.

It would be possible that I give someone a wallet.dat for a legal transfer and it is passed around in that form for a few more transactions before being drained.  This would provide a pretty good amount of (plausible) separation between me and the next time the coins popped up in the transaction logs.

bitcoind only and I run it on a Soekris box (or at least my 'main' bitcoind with my spending wallet.)  Last time I compiled it was maybe a month ago and it's been running since.  FreeBSD.  Been modifying my own Makefile to keep up with changes (obtained by syncing to Trunk as desired due to code changes I want or general maintenance windows.)

I REALLY appreciate that it is a simple binary that can be run without 'installation' so I can run it fine from my build dir.  Also that it runs well on minimal hardware and is stable.

I VERY MUCH hope that a simple and stable executable remains a basic option as the codebase evolves.

If the guy's story is true, I would vote that Bruce be a trusted third party (in spite of a gigantic potential for conflict of interest.)  Maybe I am particularly gullible, but I would bet several BTC that Bruce would err on the side of caution and even against his own personal interests to see that things were wrapped up as fairly as possible.

...but then I had no account at mybitcoin.com.

Everyone has their own risk tolerances.  But I personally agree with you mightily that in the here and now there is no exchange that is even close to the level of risk that I want to play around with...

...any more than I have had to in order to snap up some BTC before the big boys do the Wikileaks dance on their faces.

Given the small size of the markets and the distribution of wealth in the system at this point, not to mention the proportionally enormous weekly BTC heists, my guess is that a lot of people would get body slammed with short squeezes and margin calls before they could blink.  One would have to have balls of steel to play that game at this point me thinks.  I sure would not...but I'd certainly take some interest in watching the fireworks and observing the battlefield carnage.  C'mon CampBX...let the games begin!

The kind of 'lending' I was thinking about was relatively larger blocks of BTC.  Hundreds to thousands of BTC.  And on some sort of set schedule and agreement.  For instance, they could hold the BTC for exactly three months and the lender would lose use of them for trading or whatever.

This would be an alternative for someone like me who has a block of BTC that I do not plan to trade (or utilize) for some time and would otherwise just let them sit in cold storage.

From the exchange's perspective, the risk model would be vastly simplified vs. using the liquidity in people's individual trading accounts.  A panic or loss of confidence in the exchange or whatever could make that pool quite dynamic and risky I would think.

Thanks, as always, for your clear answer.  I am actually delighted that you guys are taking the time to be extra careful at this point.  A note to the effect that my transfer request was pending extra review would have been appreciated, but I'll survive the trauma


I hope you find actuarials who outside-the-box thinkers.  I sense that Bitcoin has some unusual operators (e.g., gianormous) and some of them with unusual propensities (e.g., altruism and weird shit like that) compared to a lot of other markets.  And that some of these factors could strain the commonly accepted formulas.  I could be wrong...I often am.

I made noise on several posts about lending liquidity to exchanges (because I found myself doing it involuntarily anyway.)  I got the following question:

  "Also, what benefits do you think holding a larger amount of BTC would have for an exchange? At this stage it just seems like a liability but I'd like to hear your thoughts."

My answers, most of which I pulled straight out of my ass just now:

1)  The primary thing I was thinking of was for futures and options, and that is what Jered (Tradehill) mentioned in his gracious response to my whining.  I think that CampBX was projecting something like a 50% margin which leaves need for some BTC to loan out to the (likely suicidal) trader.

2)  If exchanges have need to keep some sort of escrow in the form of BTC, it could be more convenient to satisfy liquidity needs from a different pool.

3)  The exchange could use it as working capital to fund expansions assuming there are not bound by "don't get high on your own supply" type regulations...if there are any regulations at all in this regard.

4)  An exchange, unlike almost any other entity, could give themselves a pretty healthy discount on conversion to 'official' currencies and they themselves fund different enterprises.

3 and 4 are basically a way for someone who has some excess liquidity in BTC to 'invest' in a way.

---

As for myself, I am neither a giant BTC holder, nor a very trusting person.  Before _I_ would do anything like this, I would want to see an established track record and a good bit of visibility.  I cannot see it being worth the time of any exchange, even if they had a need for the funds, to prove that they are trustworthy to my satisfaction.  Not for the kind of money _I_ have to play this angle at the present time.

I also cannot see there being enough value to be had to distribute much back to the 'investor'.  But who knows...I'm not an MBA (and indeed have no business or entrepreneurial experience at all.)

I personally hope not (but obviously am already to late.)  Here's why:

If law enforcement has to get involved with such scams, it will cost money.  That will create a lamentably legitimate argument that the government should be involved with implementation, regulation, transfer, etc, of Bitcoin.  I would have to buy that argument because it is patently unfair to ask anyone to clean up a pile of shit without any ability to regulate it in the first place or stop it from happening again.  Even the government(s).

I am sensitive to the argument that to some extent this is a general cyber crime, but Bitcoin is different in my mind.  When a kid goes to the emergency room with a hand full of bones and no fingers from trying to make a pipe bomb or playing with an M-80, I feel bad for him of course, but still believe that he (or his parents) should pay the doctor bills.  And Bitcoin is a gigantic pipe bomb imho.

Would I feel this way if I lost 100 BTC?  I'm sure I would.  25,000 BTC?  I honestly dunno.  It sucks all around, but my personal feeling is that people should just suck it up and/or participate in efforts to make the specific or general problem less painful going forward.

As always, I can certainly understand if people disagree.  And I would feel quite differently if the organization in question (mybitcoin.com) had obtained a business licence and played ball like some of the exchanges seem to be trying to do.

I agree that it's silly to keep more than one needs on any exchange at this point in time.  That goes double for MtGox by virtue of their reputation.

But I disagree that it is 'entirely' the guy's fault.  If he used good practices as he described then it was almost certainly yet another internal breach or system error.  That is fairly unacceptable.  I must trust my exchange with several k$ at a time if I want to do the type of business I am interested in.

A site which has been breached and/or is careless in one way or another could lose that money in 1 microsecond and that is completely unacceptable.  I choose my exchange(s) as best I could with this in mind, and I would consider myself partially to blame in the event of a loss by virtue of not choosing carefully enough, and partially my fault for being involved in Bitcoin at all, but certain not 'entirely'.