mtgox under Distributed Denial of Competence attack

[dutt]

You can all still buy/sell/trade here:  http://bitcoin-otc.com/vieworderbook.php    <-- The only decentralized exchange besides LocalBitcoins.com.

Thanks but I don't day-trade. In the case of bitcoin, I don't even year-trade.

That's good then because OTC is probably the worst way to day trade

[1715490619]

1715490619

[1715490619]

1715490619

[moni3z]

[aantonop]

How exactly would you scale out any architecture having to quadruple its capacity within less than a month? Including the relevant human resources, not just machinery.

Is that a serious question? Because if it is, then it is the question mtgox did NOT ask of any serious professional.

You see, I *CAN* answer the question: How do you plan for 10x, 100x, 1000x scalability. That's what a systems architect for financial trading systems does.

It is a very answerable question. The only question is how much money can you spend and how quickly can you hire experts. They've had 2 years and had not anticipated 4x growth? Seriously? A proper capacity plan for something like this would anticipate and accomodate 100x growth not 4x.

Business do this stuff ALL THE TIME. I know, I do this kind of data center work for large companies.

There is no excuse. It's plain incompetence

[DataPlumber]

FWIW, I contacted Bitfloor and asked if they have their papers in order and if they could handle an exodus from Mt. Gox.

According to the email that I received, they are registered, and—of course they would say this—they believe that they could scale.

As I say, FWIW, but there it is.

The last hour or two has disputed that allegation.

FFS.

[moni3z]

When you have multi-millions in trading fees you'd be surprised what good trading engines you can buy, or people you can hire. Or don't hire anybody and run a 2 man show and outsource the rest to India

[koobie]

I didn't notice anyone complaining when the price was going up.  When the bubble burst, as (almost) everyone knew it would, the blame get's thrown on the exchange.
Yeah, they underestimated capacity.  They did not cause the bubble or its inevitable burst.

[aantonop]

I didn't notice anyone complaining when the price was going up.  When the bubble burst, as (almost) everyone knew it would, the blame get's thrown on the exchange.
Yeah, they underestimated capacity.  They did not cause the bubble or its inevitable burst.

You didn't notice anyone complaining when there was no lag and you noticed people complaining when the lag reached 1.2 HOURS. Your point?

I actually made quite a lot of money yesterday from the crash. Personally, I gained, but did so under tremendous uncertainty and only because I can code more resilient code. My trading app was able to continue to make trades even under tremendous lag and so I made a bit of money.

The point here is that mtgox didn't just fail, they failed spectacularly, in a way that was entirely predictable and seriously damaged the market's ability to rebound and adjust. It fed the panic uneccessarily.

It will only get worse. You can pretend this is just sour grapes, but for me the grapes were sweet and I still SPIT in mtgox's face.

[koobie]

I didn't notice anyone complaining when the price was going up.  When the bubble burst, as (almost) everyone knew it would, the blame get's thrown on the exchange.
Yeah, they underestimated capacity.  They did not cause the bubble or its inevitable burst.

You didn't notice anyone complaining when there was no lag and you noticed people complaining when the lag reached 1.2 HOURS. Your point?

I actually made quite a lot of money yesterday from the crash. Personally, I gained, but did so under tremendous uncertainty and only because I can code more resilient code. My trading app was able to continue to make trades even under tremendous lag and so I made a bit of money.

The point here is that mtgox didn't just fail, they failed spectacularly, in a way that was entirely predictable and seriously damaged the market's ability to rebound and adjust. It fed the panic uneccessarily.

It will only get worse. You can pretend this is just sour grapes, but for me the grapes were sweet and I still SPIT in mtgox's face.

My point is that this is a new level for BTC.  I'm not excusing mtgox for their failure.  I'm hoping this will wake up the other exchanges and services and even the community as a whole to the fact that there are systems out there that will fail under extreme loads.  I don't know if it will get worse or if this will scare off a good number of speculators.  I am confident it will happen again at some point.  Maybe people will be more cautious.

[darkmule]

Maybe I'm in tinfoil hat territory, but I find it hard to believe any entity that claims to have 80% of BTC exchange traffic is not going to leverage its market position for its own personal profits at the expense of its customers.  That is just too much for any entity to have.

I don't have any proof they're personally doing blatant pump-and-dump scams, but the temptation to make self-interested choices, or even to take the exchange down just to protect their own market position, seems as if it will inevitably be irresistible.

I've never dealt with Mt. Gox though I have an account there, and other than being up, coinbase.com frankly did not do much better, having a spread between their buy and sell price of over $40 while Gox was down, a ludicrous spread.  This is why I generally don't keep anything in these untrustworthy exchanges other than when I'm actually buying or selling.  It cuts my nimbleness a bit in responding to sudden swings in the market, but also keeps me from ending up with a lot of money in some belly-up scam operation.

[repentance]

Many decentralized exchanges would be even better as there is no single point of failure, but this industry in brand new and undeveloped yet.

Demanding that much is like going into a newly discovered forest and getting angry because there is no fast-food!!!

How much longer are we going to continue accepting "Bitcoin is new" and "these are start ups" as an excuse?

Services launching today need to launch with a greater capacity and more resources than those which launched two years ago - that's a given.

MtGox has been the dominant exchange for a long time now and this kind of surge was expected.  It's one thing for an exchange which launched last year and which has a 5% market share to get blind-sided by this kind of surge (although I still maintain EVERY service needs the capacity to scale quickly baked in), it's an other entirely when an effective monopoly has no coherent plan for an anticipated situation.

Again and again we've seen Bitcoin enterprises fail because they lack the infrastructure to handle rapid growth.  When these enterprises are custodians of millions of dollars worth of user funds, such short-comings are simply unacceptable.  You don't take the money and put the infrastructure in place when you feel like it or when you "can afford it".  You limit how many customers you accept and the amount of funds for which you assume responsibility until you have in place the infrastructure to manage all of the risks such growth entails.

[darkmule]

MtGox has been the dominant exchange for a long time now and this kind of surge was expected.  It's one thing for an exchange which launched last year and which has a 5% market share to get blind-sided by this kind of surge (although I still maintain EVERY service needs the capacity to scale quickly baked in), it's an other entirely when an effective monopoly has no coherent plan for an anticipated situation.

If they have an effective monopoly, that's our fault.  Stop patronizing entities like this.

[PuertoLibre]

When you have multi-millions in trading fees you'd be surprised what good trading engines you can buy, or people you can hire. Or don't hire anybody and run a 2 man show and outsource the rest to India

Spot on.

I know I have paid them quite a bit in just two or three trades. So multiply that by several tens of thousands accounts...and you get the idea.

They can afford to hire the right people and buy the right hardware. I am not saying it will be cheap. But guess what? I am (as the rest of the community is) funding it through our fees.

They can afford it. They can even afford to get it done [very] quickly.

Edit: If they haven't hired consultants and have incoming orders for the fastest servers you can place in a datacenter, then they are truly being incredibly [willfully] incompetent.

Consider for a moment that one day in the near future, MTGox will likely be trading several billion USD/BTC and other [crypto]currencies. Their infrastructure costs are going to be a tiny penny on every dollar at best.

[PuertoLibre]

They NEED someone to audit their platform and give them concise and rapid plan for implemented changes. They make it sound like the proper hardware and infrastructure is far above them.

Let them show you their balance sheet on a daily basis and I'd bet no one here would agree with them on that.

If they have a DB problem, they can buy specialized hardware and implementations that can go online very quickly to handle massive amounts of transactions and scale efficiently. If they have front end problems, there are lots of companies they can approach to get that under control in less than a day. No matter how large the demand.

The more you know about large scale business implementations, the more doubtful the words coming from MtGox actually sound. The less you know, the more their story sounds legitimate. Get educated about scaling and you'll quickly know that any problem that can be encountered can be readily solved.

That MTGox is still unable to fix it after this many days just goes to show that priority is being put elsewhere. (IMO)

[darkmule]

The more you know about large scale business implementations, the more doubtful the words coming from MtGox actually sound. The less you know, the more their story sounds legitimate. Get educated about scaling and you'll quickly know that any problem that can be encountered can be readily solved.

That MTGox is still unable to fix it after this many days just goes to show that priority is being put elsewhere. (IMO)

Frankly, their apparent inability to fix what should be the core of their business during a high time of volume almost inevitably suggests that they have some motivation for not doing it.  Since the other reason is pure incompetence, neither bodes well for their future or their trustworthiness.

[repentance]

They can afford to hire the right people and buy the right hardware. I am not saying it will be cheap. But guess what? I am (as the rest of the community is) funding it through our fees.

They can afford it. They can even afford to get it done [very] quickly.

I'm not so sure that they can "afford it".  Revenue and profit are two different things and you're talking about a massive investment in infrastructure which has to be funded upfront.  While I agree that they should have been looking at ways to fund this investment for a long time now, I don't think that it can be assumed they have enough unused capital sitting around to fund it themselves without borrowing/outside investment.

[aantonop]

Getting capital funding for hardware, on proven revenues and growth is about the easiest funding pitch in the world.

So what you're saying is that they CEO is as incompetent as their COO?

ok. I agree.

[shkiser]

How exactly would you scale out any architecture having to quadruple its capacity within less than a month? Including the relevant human resources, not just machinery.

Is that a serious question? Because if it is, then it is the question mtgox did NOT ask of any serious professional.

You see, I *CAN* answer the question: How do you plan for 10x, 100x, 1000x scalability. That's what a systems architect for financial trading systems does.

It is a very answerable question. The only question is how much money can you spend and how quickly can you hire experts. They've had 2 years and had not anticipated 4x growth? Seriously? A proper capacity plan for something like this would anticipate and accomodate 100x growth not 4x.

Business do this stuff ALL THE TIME. I know, I do this kind of data center work for large companies.

There is no excuse. It's plain incompetence

Incompetence, or exploitation?

[aantonop]

Incompetence.

MTGOX could be making transaction fees on billions LEGALLY, all they have to do is not fuck up badly. Yet, they keep fucking up badly.

Totally not worth playing the market manipulation game when your reputation and opportunity for a bigger pie is on the line.

It's not manipulation, they're not smart or capable enough for that.