When checking whether a transaction had confirmed, I was surprised to see my home town on a map on blockchain.info.  My actual IP was listed with the transaction.  A quick search on the IP gave me many of my old transactions as well.

I am using the Satoshi client (and Armory), so I am running a full node.  As blockchain.info is very well connected, we are all likely to connect to one of their servers.  Your client may do the same, and then blockchain.info gets your IP, stores it forever, and makes it publicly available.  Not cool!

Of course if I truly had something to hide, I would use Tor.  But I don't, I just don't like to see my IP publicly associated with my transactions.  This info is not stored in the block chain, and although anyone could pick it up when you transmit the information, it is not normally available for later analysis.  You could argue that this just shows the lack of anonymity of bitcoin, and that anyone could do the same thing as blockchain.info.  And yes, they could, but it would require a significant effort.  And they cannot analyze the past before they decided to spy on you - except that blockchain.info has done it for them.

Don't get me wrong, I normally think that blockchain.info is a great site.  I just don't think this feature is a good thing, to say the least.  It is also a bit inconsistent on one hand to offer a bitcoin washing/anonymizing service and promise not to keep any logs of its use - and then publish the IP of the originator of the incoming transaction.

Let this be a warning to all of you running full nodes - and a suggestion to blockchain.info to stop registering IPs of individual transaction, please!

Apparently, Armory (and the Satoshi client) will face a tremendous challenge very soon.  In a very worrying post in these forums (can't find it now, sorry), the poster plotted the blockchain size versus time on a log scale.  It was a nice, straight line: exponential growth.  And much faster than Moore's law, the size growth by a factor 10 every year.

This is really bad news.  Today, the block chain is 5GB.  That is big, but manageable.  Next year it will be 50 GB, and take a significant fraction of the SSD space on my main laptop.  In the spring 2015 it will be 500 GB.  Armory will need a really good database structure, and preferably be able to not store all the block chain, but only unspent transactions.  Of course against exponential growth we all loose, and soon no-one be able to run a full node.  Assuming a solution is found to that, the amount of data that need to be stored by Armory is still going to be formidable.  People worry about whether future versions of Armory will exist and be able to restore their paper wallets.  They should not, instead they should worry about whether they will be able to find a computer able to run Armory

Of course there is a limit on the size of a block, which would switch the growth to linear.  But there is going to be a tremendous pressure to release that limit, as otherwise it will be the transaction fees that grow exponentially, killing bitcoin.

While writing I also want to throw in another comment:

Etotheipi, you should really consider 2112's suggestion to use an abstraction level seriously.  The Satoshi client has long been suffering from a badly performing database engine, obviously it has not been easy to replace it.  I suspect that the choice of engine was both rational and sensible when it was made, but was overtaken by the development.   An abstraction layer might have made it easier to replace.  Of course you worry about the performance penalty of such a layer.  However, most database applications use huge amounts of data in a performance critical way, so I would expect most popular abstraction layers to be quite efficient, otherwise they would have died out.  Unfortunately, I cannot be any more specific or helpful, as my knowledge of database technology is minimal:  I have heard that MongoDB should be worth looking into.

Too weird for my taste

When they started they really did not give the impression that they knew what they were doing.  But following the discussion is interesting, they are clearly experimenting and trying to find a good way to run it, learning a lot in the process.  It will be interesting to see where it ends, their platform might end up being an attractive place to trade (though I have my doubts).

But until then I will stick with ICBIT.  I tend to do better on markets that I understand, and futures are not that hard to grasp. :-)

There is of course no guarantee for a max spread on a futures trading platform either.  I do not understand the argument about why it would be harder to get out of CFDs when the volume goes up (but of course that does not mean that it is incorrects), however right now it might be pretty difficult to get out of some of the futures contracts.  Anyone being long on gold on icbit would have had a hard time getting out of those contracts these last weeks - although the events currently unfolding on mtgox might change that

As a "customer", I must say that I find that futures and CFDs supplement each other.  Diversification is good!

Good to hear. 

It looks a bit worrying from the outside, but I really hope that you are right because:
Indeed! 

And I do wish you luck (but limit my exposure, as I do with icbit, too).

And while we are at it: I must say that it is a lot easier to get into or out of a position on 1broker compared to icbit, mainly due to the relatively low volume and corresponding high spread at icbit.  But I guess that it is also partly due to the nature of CFDs versus futures.

1broker.com has the same problem now (apart from the bizarre numbers).  Icbit, on the other hand, is a "real" market.  You buy and sell futures to other customers on an exchange.  The flipside of the coin is that a "futures contract" is slightly more complicated than a simple leveraged buy/sell, and that the price can depart significantly from the spot market.

I have used icbit for half a year now, the site works well and the operator (Fireball) appears both honest and competent (neither is a given in the bitcoin world, unfortunately).  However, past performance is not guarantee for future performance, the site may be hacked, closed by the authorities, scammed, shut down and run, taken over by the mafia or suffer any other unfortunate fate tomorrow.  So as always when you place your bitcoins on a website, take care and don't gamble everything.  :-)

2^128 = 3 * 10^38

And the chance that a random key is a palindrome is 1 divided by that number, that is zero for any practical purposes (the number of nanoseconds since the creation of the universe is only 2*10^19, i.e. 10000000000000000000 times smaller)

Of course you can create a palindromic private key easily, if you want to.

You can always download first, and check signatures manually.  But if you are really paranoid: no.  But have you checked that the homebrew script actually checks the gpg signatures instead of just pretending to do so and install something nasty?

The GPG stuff is only used to validate the downloads.  In a previous post in this thread he gives a command line option to disable the check, hopefully that will also disable the dependency of gnupg.

Does anyone have any experience using Armory together with the 0.8rc1 version of the Satoshi client.  I would like to try out the new client, mainly in the hope that the usual "wait for the Satoshi client to catch up" ritual can be shortened.  But I don't really want all my funds to be inaccessible until I find a way to migrate backwards.

Yes, a sufficiently old MacGPG will cause that kind of problems.  I uninstalled mine and allowed Homebrew's gnupg to install, but then I have never been able to get MacGPG to work even in a remotely satisfactory way, and the newest version does not yet support Mountain Lion.

Do not worry about your private GPG keys, surely you have them backed up in three different places already.  
Joking aside, uninstalling MacGPG should not uninstall them, they should be kept in ~/.gnupg but you certainly want to back up that directory before experimenting!

+1 to both.

I think it is only fair that Fireball earn some money for his efforts too.  I also want to be paid for my job.  
Of course the customers will be shopping around if it gets too expensive, but right now icbit seems more attactive than bitfinex, 1broker or mpex.

You know the fee beforehand, so I really think it is unfair to call it looting.  Bitcoinica lost all its customers' money, the customers did not know beforehand (obviously), although it looked more like incompetence than looting.


If the price of potatoes drop dramatically, a potato trading company would not be able to keep the same fee/markup in whatever currency they use, but would have to lower it proportionally to the dropping price.

+1

It won't.  It is not a 100% solution, you can certainly shoot yourself in the foot.  But it will solve the problem of a process dying due to a bug or being killed by the user.


EDIT: In case you don't think the solution is elegant: it is because it ain't!

I think it is quite normal to feel a bit uneasy about the ultra-libertarian stereotype often promoted in these forums

And no, gold and silver are not necessary mental stepping stones for bitcoin.  Fascination with cryptography is a good alternative.  Gold is just too damn impractical.

Thank you very much for your clear and honest answers.  I am not too worried about getting scammed, I am more worried about you guys folding when everybody goes long on BTC and the price skyrockets.  This will not keep me away, but it will certainly limit the how much I am willing to gamble on your site.  I would be very worried if I were you, you could end up loosing a huge amount of money very quickly.

Nobody does, yet it happens all the time.

Much better in my opinion is 2-of-3 paper backups: Three pieces of paper hidden three places.  You need any two of them to recover the backup, but alone they are useless.  I think they are on their way into Armory.

It cannot.  You can only place bids/asks within the limit, and cannot accept bids/asks outside the 10% limit either.  But as I understand it, Fireball reserves the right to make an extra clearing (and thus start a new trading session and move the 10% frame) in case of extraordinary volatility. 

I am a latecomer trying out the site with a trivial amount, and have a number of worries and questions, that I hope you can address.

My main worry is this text in the FAQ:
I am mainly worried about what you do not write: You do not write that you actually back our positions 100% automatically (or manually, although that is more risky).  If you do not, then that introduces a significant counter-party risk to your users.  If a lot of users go long, and prices go up, you may not be able to honor their winning and all users' funds are in peril.  I guess that is what is normally meant by a "bucket shop" (*).  On the BTC/USD market, you can easily back your users' positions, on the other markets that seems a lot harder.  This is different in a futures market like icbit.se, where the number of short and long positions are always balanced (by the market price changing to make the popular choice more expensive).

A related question: When I trade on margin, I am essentially borrowing money to trade for.  From whom do I borrow?

The rate that is displayed on the BTC/USD market, is that the instantaneous MtGox rate, or is it somehow adjusted to balance the positions? (if so, how?)

How do you profit without fees?  Is that from the spread, and is that spread fixed by you or is it the MtGox spread (possibly plus a bit)?  Note that there is nothing wrong with you guys making a profit, in fact that is your only motivation to keep the site running and thus in our interest too - I just like to know what my expenses are :-)

Finally, how is profit and loss treated: If I open a 10 BTC position, and the market moves my way so it becomes worth 11 BTC, do I then have a position equivalent to a newly opened 11 BTC position, or do I still have a 10 BTC position but now with a 1 BTC profit?  And in the latter case, what happens to the profit; is it paid out daily at a "clearing time" or only when the position is closed?

I hope you do not feel that I accuse you of being scammers by mentioning "bucket shops".  If I did not think that you are legit, I would not bother writing.  But margin trading and trusting bitcoins to websites are both risky - and I need to try to assess the risks before going in.


(*) Note that "bucket shop" does not mean scam, just that trades go "into the bucket" (i.e. are not backed by real market trades),  http://en.wikipedia.org/wiki/Bucket_shop_(stock_market).  This is forbidden in the US as it induces high counterparty risk and opportunities to scam the customers.  I think you site is sufficiently transparent to eliminate the latter risk.  "Bucket shop" appears to be a US term, where it is forbidden.  Incidentally, CFDs are forbidden in the US too, but I do not know if is because of the bucket shop law.  CFDs are legal in many other places.