So it was just luck that the thief ended up transferring to strongcoin instead of a private wallet. 

Where do we go from here?  It's kind of an ethical dilemma, because while we'd all like to think that bitcoins are unpoliced, there are definitely 3rd party services that can do this and seize funds as they see fit.  Are we going to end up with a Network of Trust between large-scale bitcoin processors that attempts to detect and intercept grand-scale thefts?  Or are we going to have to eschew the very centralization we're trying to create?

is it true? im starting to doubt now...


[/i]

full article here:
http://nerdr.com/bitcoin-exchange-scam-bitcoins-are-worthless/

What does bitcoin-central have to do with btc-e?

I think people who are hating on strongcoin are taking away the wrong thing from this.  This is the reasonable and expected outcome.

I suggest meditating on some words from Satoshi:

Used correctly Bitcoin is secure no matter how good the "excuse" is and in this case the excuse is exceptionally good:  Someone who ripped off infrastructure important to many of our community members, screwing both the users and a the operator (a rightfully well respected member of our community)— is utter scum. It would be wrong of us to expect anyone to protect him, he didn't protect Bitcoin— he didn't protect Ozcoin's users— he didn't look out for anyone but himself.  I agree that this can begin slippery slope of "excuses"— but Bitcoin has an answer to that that slippery slope: Build systems that don't depend on trust. But Bitcoin's trustlessness can't protect you if you go around delegating the actual use of Bitcoin to third parties.

When you use a webwallet you're trusting that the JS is not replaced out from under you— you're trusting that any 'validator' tool validates against something useful (and not just some copy the same operator can replace), and that no additional JS is being inserted which e.g. rebinds half the JS language and keeps the validated code the same while changing its operation, that the web browser environment— which wasn't designed for this kind of security at all and lacks basic features like mlocking data to keep it out of swap— is secure. You're trusting that the operator doesn't phish your passphrase— as they trivially can— or brute force it. You're trusting that the site gives you faithful information about the blockchain as none of the webclients have even SPV security. You're trusting that the site operators description of their service as secure is truthful and that there aren't subtle weaknesses that you don't personally understand. You're trusting a lot of things ... and especially if you're a disreputable thieving source there can be no basis for that trust.  It would have been wrong of us to demand that the operator of a service turn down a well substantiated request in a case like this, it would make them a villain to the kind and honest people their decision harmed. We shouldn't create a world where people have to make choices like that.

The webwallet wasn't the only problem here: For example, the address reuse made identifying the wallet vendor trivial.  These aren't new security issues, but a lot of people won't believe them without concrete examples.

Ultimately the problem here is one of introducing trust needlessly. Expecting this not to fail for a villain would be to expect inhuman behavior from the site's operators... and even a wallet service operated by the least human most profit oriented sort would have some "excuse" that was sufficient: Perhaps for some it's a crime that ought to be solved, for others it an attractive bribe, someone else might be motivated by a court order— or by a literal gun held to their head. Whatever the exact contours of the breaking point is— it exists.  Bitcoin was designed to liberate us from so much dependance on trust, but it can only do that if we use it— and not thin-clients that kinda-sorta-approximate it.

I'm glad that the example here is one where a really obvious thief gets screwed over and not someone less deserving. Hopefully the honest folks will learn and change their behaviors faster than the thieves do.


[I'm sure this is going to get discussed in a dozen different places— I'm not going to bother trying to track them all down. If you see it discussed elsewhere and you thought my comments were interesting, please feel free to drop a link back to here]

It's because of fear. And greed.

Those who already have Fiat (the government) don't want any competition (from Bitcoiners).
Those who already have Bitcoins (Bitcoiners) don't want any competition (from Alt-Coiners).

Both want to protect their assets.

But Altcoiners are no different: Those who already have Litecoin don't want any competition (from Feathercoiners)  

PLEASE READ POST BY MOBO DICK



According to http://blockchain.info/charts/blocks-size we're aproaching 6 gigabytes for the blockchain.
According to http://torrentfreak.com/bittorrent-and-netflix-dominate-americas-internet-traffic-111027/ Netflix is 34% of total...

I can't find numbers on exact transfer rate of the internet. But lets say ~1 exabyte per day (someone got a source to the real data?) so we're looking at netflix transfering 333,000 terabytes per day. This means that even if you had 55,500,000 bitcoiners downloading the entire blockchain every single day... you'd still be consuming less than netflix does on a daily basis.

For real numbers, number of tx * number of nodes * time = transfer rate of bitcoin network  ... feel free to include an estimation of non-current blocks being transfered to out of sync clients.


The difficult seems to be that when bitcoin grows the potential for transactions also grows. The more people there are in the bitcoin economy the more there is to transact in the bitcoin economy.
It's related to the problems you get with interprocess communication in networked processing.
I can see that the number of transactions will rise at some exponential number compared to a linera rise in number of nodes.
So the ammounts of transactions wil grow faster than the ammounts of nodes.
If bitcoin becomes anything like important in society then you will pay for your groceries with it, you'll pay for gas with it, you'll pay for the ticket to dysneyland with it. So there will be a lot more transactions per user to be done.
And all these transactions also add up to the block chain, so everyone will need to get the blockchain which includes all the transactions of everyone else in the world.
I can easliy predict that the 6G of chain we have now will be meaningless once bitcoin represents some substantial part of the economy.
The 6Gig will be a daily download for every user at best. It won't take long before you will need to get a gig per minute to be up to date.
We all think the blockchain has been growing pretty fast lately, right?
Well, right now the size is related to about 55000 transactions daily. You need to get up to date with 55000 transactions per day.
Now imagine 1/10th of the world uses bitcoin to pay for their usual things.
We get 1/10th of 7x10^9 = 7x10^8 people participating.
Let's take an average of 5 transactions per user per day. You need to buy gas, you get an icecream, you pay the rent, etc.
(i'm just using some ballpark figures here to see where we get)
This gives us 1.4x10^9 transactions daily. 1.400.000.000 transactions per day.
That means the blockchain will grow about 25000 times faster than it does now.

Lets make an estimate of how much the blockchain grows right now.

In the last 1.2 months the blockchain grew by about a gigabyte.
On average that is about 0.0269 gigabyte per day. This gives us about 27.5 MB per day.
Ok, so now let's multiply this by our projected change in magnitude.
We get 27.5 x 25000 = 672 gigabyte per day !!

So in the situation where 1/10 of the world population does 5 bitcoin transactions per day on average everyone will need to download 672 gigabytes of new blockchain per day to keep up. If you didn't update for 2 days you'll need to download over 1TB . If you didn't touch your wallet for a month you'll be pumping 20TB to get up to date. And all this to be able to use bitcoin as a currency.
After only a year of hoarding blockchain everyone would have about 240TB of blockchain stored locally.

I think this will be problematic from an energy point of view even before the practical problems of storage become too devastating.


THANK YOU MOBO DICK
BULLS BITCOIN IS HORRIBLY  FLAWED, AND THIS ISN'T EVEN INCULDING CONFIRMATIONS, MAINPULATION, NOTHING BACKING THE CURRENCY, PIPE DREAM ON

Yeah. When 0.5% of the world is in, the early adopter phase has ended, and there is a mathematical chance of it being a bubble, given that it is a technology which in all likelihood is beneficial to most, such as the Internet, email, mobile phones and Facebook.

In 1999, 0.5% of the world were Internet literate. The "new paradigm" had arrived. There was a huge bubble on valuations of the internet companies, since people were pumping the money in, ahead of the usefulness curve. A mobile operator was trading at $20,000+ per customer. It was delusional, since you cannot extract that much lifetime value out of a customer in perfect competition or even close to perfect competition. To achieve 10% APR, you would have to make $166 per month profit per customer, which you obviously don't, and never will - I am the top absolute heavy user of mobiles, and I hardly pay that much to them in revenue, corporationwide. $10-$20 revenue per month is the norm.

The bubble crashed and the technology stayed, was developed, and has calmly and bloodlessly revolutionized the world.

Bitcoin at $156 per mBTC, as there is 3mBTC per person in the world, actually more like 1mBTC, since many of the coins are yet to be generated (10MBTC), a good number is lost (~0.5MBTC), and I don't think Satoshi will spend his backbone miner position (1MBTC).

Most bitcoin holders that I know, keep, or plan to keep 80% in paper wallets (6.5MBTC out of 8MBTC). Some (1.5MBTC) play with their stash, though, but these generally lose bitcoins over time, and are replaced by others. It is a giant casino, where nearly everyone wins on fiat and loses on bitcoins, (hope thay have fun).

The active traded stock of bitcoins, 3MBTC, is in accordance with the analysis. Half of it belongs to the trading positions of the long-term holders, and they can increase their stash at several pips per hour. Bitcoin price in the last 8 days has risen 50 pips (0.5%) per hour.

The highest "tear speed", which I define as "increase in Bitcoin market cap"/"net investment demand" can be measured at about 10. Expect "bitcoin shortages" to resume, so that there is no meaningful sell side in the exchanges. "Physical"/OTC premium did skyrocket to 25% in early April, it will go back, and higher.

In my short 7 years career as a silver dealer, physical silver was maximum at about +150% compared to spot. Even now it is about 30-50% over.

I am selling Casascius at 1.50 per BTC1, 6 per BTC5, and I am planning to increase the premium. 3 weeks ago I cleared the Casascius supply of the leading Finnish merchant, because of their terms allowed me to buy the casascius' at 3% over melt, and pay with fiat at the close of the second bank day following (T+2). So, I bought like Saturday morning, paid on Tuesday evening, and made 20% in fiat/BTC rate appreciation, instead of losing the same amount by trying to make my money clear in the exchange.

This kind of madness cannot go on for much longer. The ones making money (like I have sporadically done), are making too much of it, and it is pressuring the supply side of bitcoins.

When I was mentioning the "event horizon" yesterday, it is the point of no return, and we are in it right now. NOW bitcoin is the most undervalued during its history, since the wisest brains in the world cannot think of a scenario, that it would not go to $millions in the bubble pop. Therefore they buy in, in the most epic forward escape that the world has seen so far. Since there is still a 100,000% gain available, and the risk has dropped to virtually zero, all the money in the world tries to enter into bitcoins, and the endgame can be rather quick.

Your wallet is safe. If someone understands and accepts what is written above, he can just buy bitcoins and be rich in a few weeks. If he doesn't, he is not interested or capable in stealing your wallet anyway.

I expected blood in the streets and shortages of food when the fiat economy ends. But we did not see either, when Internet, email, and Facebook proliferated. Perhaps I will still be able to buy my weekly bottle of Riesling, and even be able to choose the brand, in relative comfort, despite the fact that I own more money than I ever can realistically dole out.

I can make BTC10 or more, every phone call I take, since people want to buy bitcoins with their fiat, gold, silver, cars and whatever they have, and I can just select what I need.

You can call me if you want, my number is +358-50-3235950. You can talk to me for BTC10 per hour, prepaid. Granted, it is much fiat, but why would you care. You mined your blocks solo, and now you can talk to me 5 hours for the price of one. Realistically, if more than 3 people call me per day, I will need to increase the price due to scarcity of my time available, and the fact that I spend most of my day internet trolling anyway and don't have too much interest in making money anymore

Aren't every day chinese people still discovering production lines and agriculture?

Yes and VHS got accepted because the porn industry chose VHS over Betamax.

So all we need to do is get the porn industry to accept LTC. That'll skyrocket the price.

Betamax had some rather large advantages over VHS.

I am curious why you say that

And as alt coins that are trash are exposed as trash over time by no usage as a means of exchange they will be removed after people lose interest in them.

NVC, TRC, and PPC (we'll see about the last one).

exactly, and when some odd coins in btc-e become less odd, hoarders will tweet magicaltux to list them in gox, and so the cycle continues.

I thought Id start this as it seems everyone is pinning their hopes on Gox accepting LTC. Im all for expansion of the currency but when you consider the facts it does seem a bit of a fallacy.

MtGox have lag issues anyway with Bitcoin traffic, often I see upto 8 minutes lag which aside being shoddy service considering how much they make, does make me feel they manipulate markets and prevent trading when it suits them. The addition of LTC would simply over load their already slow system. If any alt currencies were coming to Gox I would think they would put this off for some time at least until they can scale their servers.

The price of LTC is already pumped to hell, I know a lot of people won't like me saying that but its true. Theres not enough services to sustain this price and when you consider the services BTC had at this price it certainly puts LTC into perspective.

LTC will grow, but not until payment processors are out and no one exchange has the foothold on the market like BTC-e.

Im in LTC for the long run, but cant say I dont expect a big fall to happen soon when buys run out of steam due to lack of confidence.

This particular instance is pretty cut and dry. The hacker started moving the funds immediately from the hacked address and then started using StrongCoin almost immediately afterward. The accused person just needed to publicly ridicule Strongcoin to redeem themselves, but all we've had so far is a few of the regular trolls and SA goons whining about a hacker's right to steal, essentially.

That said, online web services like Blockchain.info and Strongcoin do provide a single-point-of-failure whereby a government could potentially steal your coin. There are a few ways to get around this, but we need more use of Shamir's secret sharing and/or m-of-n wallet creation.