Ah... 70 more minutes before we get to watch the pigs get slaughtered.

Of course the price will rise.

You and others will try to sell immediately.  The savvy investor knows the suckers will be trying to sell.  CASH has been tied up in Mt. Gox for a week.  (Bitcoins were freed yesterday, but not so much the cash.... hard to move your whole cash position to TradeHill... easier to wait until today's Mt Gox open).

Savvy investors will be buying up Bitcoins from the amateurs.  And some of you will sell your whole position at 15.  And when you see the price hit 17, and then 18, and the world didn't end, then you'll be buying back in at 18... And you'll drive the price up over 20.  Before it's all over, some amateurs will be out at 15 and back in at 25.  Sell low, buy high.  Good move!

Then again, what do I know!  Trust your instincts!  Others will appreciate it.


Why would you not have a poll option greater than 10?  Like "It will rise, not fall."

Probably not a perfect example, but how about
Stolen Fidelity Laptop Contained Info on 196,000 HP Staffers

This is the most insightful post in this thread.

Here are a few things to think about:

1) It's a LOT easier for people to SELL Bitcoins now than to buy them.  (If you had Dollars and Bitcoins tied up in Mt. Gox, you could move your Bitcoins in minutes, but Dollars can't be quickly and easily transferred.  I guess I'd have to take it to Dwolla and then to TradeHill.  Sounds hard and a lengthy process.)

2) If there was a run on withdraws at Mt. Gox, you'd probably see it in the BlockExplorer.  But the 424,242 BTC that they moved the other day haven't been touched.


A few people are selling.  Tomorrow cash will free up, and a few people will be buying.  It'll all sort out over time.  And you can probably make a few bucks buying them cheaply today.

Let me get this straight.  This isn't a trick?  You aren't going to get me on some technicality... like "I said 'paste it here' meaning paste it in MY message".

You're telling me if I can paste your TradeHill Referral ID into a message post of my own, that you'll give me 100 Bitcoins? 
If you are serious, I'll take on this challenge.  I am absolutely positive I can do this, but I don't want you to say that you were only kidding.

Maybe we should have a contest to add a company slogan or tagline:

"Not a single withdrawal for over six days!"
"We built a successful website, where there are no barriers to entry."
"Loved by hackers worldwide."
"Website Audited for your Protection."
"In times of crisis, we lead the pack."
"From the Land of the Rising Sun to the Land of the Falling Bitcoin."
"Implemented using Open Source software and Open Database technologies."
"We put the douche in 'fiduciary'."
"Where the value of your Bitcoin investment is your last concern."
"Endorsed by Little Bobby Tables."
"We proudly publish the list of our happy customers."
"Protecting your Bitcoin investment for over a fiftieth of a week."
"Trading Available 24x7, except bank holidays of 6/19-6/24."
"Our security speaks for itself."
"Featuring the Privacy of a Swiss Bank Account and the Security of their Cheese."
"Where else can you buy Bitcoins for a penny?"
"Exchange with us and prepare to get Mounted."
"We're the final word in 'websites unable to be hacked'."
"We make sure all our security issues are discovered."

Nasdaq peak March 10,  2000 at 5048
Nasdaq a decade ago:  2035

If you had been "predicting the dot-com crash over the last decade", you would have predicted a crash, as the Nasdaq went UP from 2035 to its current 2652.

In other words, "predicting the dot-com crash over the last decade" means you did it after the crash.

The OP was entertaining, to say the least.

First, you can look at Bitcoins in a lot of ways.  But to compare it to Digicash and Beenz really shows that you haven't done your homework.  Probably a lot like predicting "the dot-com crash over the last Decade".  (That would have been a little more impressive if done in 1998, and not over the last decade.)  Digicash and Beenz have only a very little bit in common with Bitcoin.

If you look at Bitcoins as analogous to the Gold Rush of 1849, it might provide a better parallel.  Early miners made a lot of money, while later miners "made a living".  If you had never heard of a gold rush, and 1849 hit, and you heard of a lot of people getting rich on gold, you (as an uneducated person) might be tempted to buy gold.  This, of course, would be silly, except that a lot of people buying gold drives the price of gold up, and so as gold gets attention, people see that others have made money buying gold, and so you get the bubble.  People buying Bitcoin is a lot like people buying gold in 1849 - it doesn't make a lot of sense, unless you believe that it either is a) a good store of wealth, or b) going to rise in utility /value in the future.

Bitcoin is going to get more attention primarily because it has solved a problem that has never been solved before - Beenz and Digicash didn't solve it.  Paypal and Mastercard didn't solve it.  Cash doesn't solve it.  Bitcoin has a very clever solution to a very difficult problem.  And it's the first to solve it.  So Bitcoin is going to get attention.  And with attention comes investment.  And with investment comes a rise in value.  As long as Bitcoin continues to GROW in the attention it gets, chances are good that people will try to figure out how to invest in it.  And to see that there were only 61,000 accounts in the Mt. Gox leaked database, that shows how truly tiny the Bitcoin community is.  In fact, there were less than 10,000 prior to May 15th or so.

It will take YEARS for the Bitcoin infrastructure to approach that of regular currencies.  That's obvious.

Many people who have taken a close look at Bitcoin from a mathematical standpoint see the beauty of it, and instantly want to "invest".  Unfortunately, there's no "Bitcoin Corp" that is a reasonable investment, so the best they can do is buy the currency.  This will continue until some obvious leader becomes "invest-able" at which time, a significant amount of "Bitcoin speculative investments" will go that route.



Currency speculation isn't the best way to make money in Bitcoin.  Building the infrastructure is.  (There's a reason why the remnants of the Gold Rush of 1849 are Wells Fargo and Levis Jeans.  They made sound investments "around" the gold rush, not in it.)  But there's a short term opportunity to make some cash on speculation, and there's nothing wrong with that.

If Bitcoin reaches Paypal's level of success in a decade, then you can do the math - there's a limited number of Bitcoins, and that number needs to support the sort of environment that Paypal supports.  So that means they will be worth over $100 in about 7.5 years.   Not thousands.  Not mllions.  But between $100 and $200.

But if you build a nice Bitcoin Company that will benefit from this trend, and go public, the public will flock to you (assuming you have a decent plan, and Bitcoins keep gaining in mindshare.)

Give information regarding activity prior to the passwords being leaked - especially information that only you would know (and not someone who hacked your Mt. Gox account and email).

For instance, if you did a deposit or withdrawal before 6/15, give the details.
Or if you have information about one of the Bitcoin addresses used prior to 6/15, tell them that you will do some activity in that account, that they can verify in the blockexplorer (example:  "on 6/5, I withdrew bitcoins to account number 1xxxyyyxxxyxxyxyxyx.  In 2 hours I will send .42 Bitcoins from that address to 1zzzzzzzzzzzzzzzz to prove that I am the person who controls that account".


The key, I think, is to try to go back several weeks ago, and use information that a hacker wouldn't know.  Keep in mind that a hacker who signed in could have dumped your account history, so simply naming the transactions isn't much proof.

IP addresses could be good proof too. 

I'm no cheerleader for Mt. Gox, but I think it's hilarious that no matter what they do, they can't win.

According to you, he was totally responsive to the request that he prove that he still controls all the Bitcoins, doing a visible transfer within an hour.  And now you act as if that's a bad thing!

These are really two different problems.
Problem #1, create a valid address that has a certain set of characters in it (i.e. to throw away money)
Problem #2, create a valid address that has a certain set of characters in it, that I know the private key to. (i.e. vanity addresses)


In problem #1, simply start with the characters that you are trying to create a valid address with. Get the right checksum at the end, and you're all set.

In problem #2, you have to create a valid key pair, and check to see if it has your desired string in it.  A much more difficult problem!

Keep in mind that the Bitcoin network has a giant ledger that keeps track of which accounts have which coins.
Your wallet.dat file is your proof that you are the owner of certain accounts.

"-rescan" option will look at the whole ledger (called the Block Chain), looking for coins that belong to your current wallet.dat file.

if you have two different wallet.dat files and you are trying to get the mess straightened out, simply record the "Bitcoin Address" of one wallet, and then open Bitcoin using the OTHER wallet, and pay all your coins to the first one.

You are still an early adopter.

Mt Gox' leaked password file was only about 61,000 users.  I know of several people who signed up after the file was grabbed (so they didn't appear on the file).  So let's assume it's less than 70,000 traders. 

There have only been about 400,000 downloads of the Bitcoin software (from sourceforge stats).  Assume that many Bitcoin owners downloaded the software multiple times (as new versions came out).

So MAYBE there are 100,000 owners of Bitcoins.  Probably more like 70,000.

If Bitcoins take off, there could end up to be 100 Million owners (or more).  So you are still very much an early adopter.

Python runs fine in Windows.

The general steps for an adventurous windows user:

1. Download Python 2.7.x from Python.org
2. download Bitcoin tools
3. Exit Bitcoin
4. Back up your wallet.dat file
5. run Python
6. write a few lines (probably 2 to 5) to open the wallet file and extract the key pair and print it


Not saying it's easy, but it's really not that hard either if you want to give it a try.

I like to explain it this way:  The block chain is a ledger, shared on many computers, keeping track of numerous accounts and their current balance.  Your wallet file proves that you are the owner of particular accounts.

Might want to check with the good folks at optonline.net.

And remember, you can have better luck if you call as a network admin, talking to one of their network admins.  As soon as you get the police involved, they'll likely insist on a subpoena.  But if you call one of their network admins, and let them know the time and, if they won't give you the name of the user (I doubt they will), maybe you can have them set aside the name of the user for when the police come.  Preserve the records.

Not sure how you got the IP address, or how reliable that is, but that's what I'd do.

PS  I should add that this was advice given to me by local police about 8 years ago, when I was investigating a hacking incident where I was pretty sure I knew who the intruder was.

The trend that people use a single word "THIS" to indicate that they agree with an earlier post, and how others find it annoying.  Discuss.
::bracing myself for a slew of "THIS" responses::

I can assure you, if it were me, you wouldn't hear me identifying myself publicly.
What is there to gain?  Sympathy for Mt. Gox?

One thing they could do is "man up" to their mistake.  All trades stand, and people who lost Bitcoins will have their accounts returned to the same amount of Bitcoins as there was before the negligent security issue.  THAT would be the right answer.

If I had buy orders in at a penny and a nickle (which I had as recently as 4 days ago), I would feel totally cheated if those orders were filled, and then Mt. Gox took the Bitcoins away from me.  It is VERY possible that my trade was independent of the "stolen" bitcoins - perhaps someone (or their bot) saw the market tumbling, and sold to get out, and I bought... this would be a transaction between me and that individual, and has little to do with the stolen coins.

Bottom line is that Mt. Gox was making BOATLOADS of money before the issue.  They SHOULD HAVE taken steps to prevent this from happening, and they didn't.  So now they should pay, bitcoin for bitcoin, every harmed individual.  No "transaction rollback".  If they couldn't handle the liability, then they shouldn't have taken on the liability (along with the associated profits for the past few months).

Even if it took YEARS to make everyone whole, THAT is the right answer.  

Shoot, I wish I had funded my TradeHill account.... I'd be buying like mad!

My prediction: you're unlikely to see bargains like this ever again.  Potential buyers are stuck with no money in their accounts.  It'll take days to get money into TradeHill.

Then again what do I know.

tldr; I would like to see a "provably honest" lottery, and provide formal step-by-step proof that a lottery without a trusted escrow is not provably honest.


First, realize that this whole thread started with a comment by Joan that said "Lotteries need to be provably honest."  Keep in mind, I didn't start this thread, despite the appearance to the contrary.  I made a comment in response to Joan in another thread, and apparently an administrator thought it was interesting enough (or off-topic enough) to merit its own thread, and moved in into it's own thread, making my message the lead comment.  The original topic was "Re: Bitcoin7 a new exchange" as you can see in some of the early messages starting with message #2.  In an effort to have it make sense on the forum (since the admin forced me into a position of "thread first post" with a message that didn't make much sense as the first post, and made it look like I made no sense), I changed the topic and the intro to the first message, because having it called "Bitcoin7" wasn't logical.  If that appears "dishonest", tell me what you want it to say.  I have already edited it twice in an effort to have it make sense to the casual reader, and in an effort to appease the user Bitlotto's claims that I was being dishonest. I can't guess at what you want.  I have never accused Bitlotto of being dishonest (even though he accused me of that), in neither the current thread, nor the pre-edited post.

Second, I have no malice toward bitlotto (the user or the service).  My goal in this thread is simple:  figure out a way to create "provably honest" lotteries, and determine whether there is one already.  The Bitlotto service may be completely honest (and I've stated already that I believe that it likely is), but the challenge of this thread is whether it is provably honest, as stated in the very first message.  It got more interesting when Bitlotto, the user, made a claim that his service is "cheat-proof".  Remember, the goal is to have "provably honest" lotteries, and so if this claim is true, he may have one.  But I don't think so.

I believe Bitlotto wants his service to be provably honest, and I made a suggestion as to why I don't think it's cheat-proof, and how it could be improved with a trusted escrow.

Step By Step Proof

So, as a proof that Bitlotto, the service, is not "cheat-proof" without a trusted escrow, here's excruciating step-by-step proof (sorry so long).  If you disagree, please tell me which particular step in my logic is flawed.

Step 1.  In order for a lottery to be provably honest, the participant's true expected payout must be equal to the published expected payout, which is published by the lottery operator.

Step 2.  It is impossible to tell whether a lottery participant is affiliated with the lottery (either the lottery operator or a shill).  I believe this is self-evident, and user Bitlotto also made the claim that the participants are anonymous.  Even if all participants stepped forward and individually identified themselves, it's impossible to prove that they are not affiliated with the lottery operator.  (It's often impossible to "prove a negative".)

Step 3.  The operator can purchase tickets to his own lottery without being detected.  (Thanks to Step 2)

Step 4.  There is a concept of "finite".  Users have finite lifespans.  Operators have finite lifespans.  Companies have finite lifespans.

Step 5.  There is a concept of "virtual certainty".  (Any supporter of Bitcoin should understand this concept, as the whole Bitcoin system is based on virtual certainty principles, from the confirmation process, to the effort to create unique Bitcoin Addresses.)  There are events whose probability is so high that it is "virtually certain" that they will happen.  And within the context of a finite number of trials, they will almost certainly happen every time.

Step 6.  It is possible for an operator to purchase tickets to their own lottery with virtual certainty of a win.  This step is perhaps best demonstrated with an example.  Using extremes, it's easy to see that this is true.  Let's say Satoshi holds 600,000 Bitcoins, and he holds a random monthly lottery whereby he convinces a single user to wager .01 Bitcoin, with the potential payoff of 600,000 Bitcoins.  Satoshi holds 60 Million times as many entries as the user.  While all lotteries are long shots, you can predict with virtual certainty who will win this lottery every month during Satoshi's finite lifetime: Satoshi.  Note, it's important also to note that a VERY small change from approximately 1 in 60 Million to 0 in 60 Million is the difference between honest and dishonest; Satoshi purchasing that many tickets in his own lottery does not in itself make the lottery dishonest.

Step 7.  It is possible to "launder" Bitcoins such that you can hide your identity and pay yourself, without everyone being able to detect who had the original Bitcoins.  (No need to read this whole step, unless you don't believe that it's possible to launder Bitcoins without "everyone noticing".)  Once again, easy to demonstrate with an extreme example:  Let's say you have 1 Bitcoin that you are trying to launder.  You can transmit 1000 Bitcoins to an account, with that 1 Bitcoin bundled as part of the transaction.  And then transmit 1000 Bitcoins to 1000 separate accounts, and the particular "1" Bitcoin is effectively lost.  No one can say with certainty which of the 1000 accounts holds the "dirty" one (in fact, every accusation is likely to be a false accusation as, in this example, 999 out of 1000 accounts are clean.  If you don't think that's enough laundering, run it through the same process 1000 times).  There are a number of well-documented ways to move money around to launder it.  You may even be able to set up an anonymous Mt. Gox account using Tor, transfer the 1 Bitcoin to the account, wait a week, and then make a 1 Bitcoin withdrawal.  During that week, "your" 1 Bitcoin will likely have been bundled with others and sold, and the one that you withdraw would be clean.  Not everyone would notice that you did that.  In fact, everyone would NOT know - only someone with access to the Mt. Gox logs would be able to tell what the "new coin" was, and if he were a co-conspirator, then it'd be possible that no one else would know.  Laundering money is possible with Bitcoin (even though laundering large amounts is difficult, it is still quite possible to launder money so that not "everyone notices" that the lottery operator is paying himself).

Step 8.  A lottery operator can shut down his lottery and take all the bets without paying off a winner, effectively stealing money from lottery participants.

Step 9.  A lottery operator can launder stolen money. (see step 7)

Step 10.  If a lottery operator's mode of operation is that under certain circumstances (of even miniscule probability), he will steal money from the lottery participants, and this plan to steal is not published in the lottery rules, then the user's true expected payout is less than the published expected payout, and therefore, by definition in step 1, the lottery is not "provably honest".  (Note, this is regardless of whether the circumstances which trigger the planned theft ever occur in finite time.)

Step 11.  It is possible for a lottery operator to, unbeknownst to the participants, purchase tickets to his own lottery, to create virtual certainty that he will win (Step 6), and have an unpublished fallback plan (which is virtually certain to never have to be executed), to shut down and steal the jackpot, and launder the money (Step 10). 

Step 12.  Lotteries that do not employ trusted escrow services cannot be "provably honest", because such lotteries can have a mode of operation whereby they steal from the participants under certain circumstances (as mentioned in Steps 10 and 11).

Q.E.D.


"Virtual Certainty" means with an extremely high probability, and you can take all of the above steps and apply them with lower probabilities within the context of finite lifespans.  You may be questioning the relevance of this proof (with extreme examples) in the context of one like Bitlotto.

The simple, very practical example that I already gave is that an unscrupulous lottery operator can set up a lottery whereby he runs a monthly lottery selling 1 Bitcoin worth of legitimate tickets and buys 130 himself, with the plan to run off with the money if he fails to win.  He will make approximately 10% annual return on his "investment", and his lottery will have an expected lifespan of ten years before he runs out of luck.  Further, if he pumps his gains back into his lottery, he can extend the expected lifespan of his ruse.  And if his monthly execution is that he buys all of his tickets on the last day, then he ties up his money for very little time (12 days a year), while making 10% annual return on his money.  Over ten years, he never makes a legitimate payout, and every monthly "drawing" is a scam, despite appearances to the contrary.  Low risk, minimal investment, reasonable payback.  You can alter the parameters to achieve the risk/reward that you find desirable, but I contend that an investment returning 10% per year with very little risk and the opportunity to make the risk even less in greater years is an attractive investment. 

I also asked the simple question as to how we could prove that Bitlotto DIDN'T do that already, to which all I got back was that the burden of proof is on me, to prove that he did.  No, that's not my obligation.  I'm not set out to prove that BitLotto is a scam, I'm trying to prove, and feel I have successfully proven, that it's not "provably honest".  And so it's not my obligation to prove that he did cheat; It's my obligation to prove that he could have cheated (which I feel I did in earlier posts, and just did again in this post), and thus far no one has been able to find legitimate fault with my proof.

Changing the subject away from a particular lottery and speaking generally: to me, it's obvious that a lottery that plans to steal the money under certain random events, without disclosing this plan in the lottery rules, is dishonest, regardless of whether that random event ever occurs.  If the Satoshi lottery mentioned above in Step 6 had the published plan of "your odds of a payout are 1 in 60 Million", but with a real plan of "if that 1 in 60 Million chance hits, I'm not going to pay off anyway", then it would be dishonest, regardless of whether the one-in-sixty-million long-shot event ever occurred.  And that long-shot event will likely never occur within the span of Satoshi's lifetime, yet such a lottery is dishonest.

All of this proves that any claim of "It's cheat proof" is false.  And that it is possible for a lottery operator to "pay [him]self without everyone noticing".  These were the exact challenges that were put forth in thread message #4. 

Unless a Lottery operator can prove that the published expected payout is accurate (and that he has no plans to run off with the money), he cannot have a provably honest lottery.  By instituting a trusted escrow, it's possible to reduce the likelihood of an operator being able to execute a plan to run off with the money.

Why am I trying so hard?  Because I want a provably honest lottery.  And to me it seems pretty clear that this is not provably honest (and that it's a hard problem to solve) and I can't believe that I'm having a hard time convincing certain other people to understand what I think is obvious.  And if I am wrong, I want to know exactly where I am wrong, because I am not seeing it, after reading numerous futile messages to enlighten me.


P.S. I'm not sure what the reluctance is to running a lottery through a trusted escrow.  Is it the cost?


:: dead horse, beaten beyond recognition.