Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[LFC_Bitcoin]

Choo Choo?

No?

 

Closing in on 600.

Not sure about choo choo but the price is certainly recovering from the panic dump after the bfx hack. It always would do though, sure it's unfortunate people got burnt but it's an unlicensed exchange that had the problem. No reason for people to lose faith in bitcoin.

[JimboToronto]

Good morning Bitcoinland.

I see the recovery from last week's fiasco is continuing nicely. Over $600 according to Bitcoinaverage.

It's only Sunday. Lets get this thing rolling again.

Hope everyone bought last week. It was pretty much a no-brainer.

[BlindMayorBitcorn]

BitGo and BitFinex are both very keen to point out that none of the blame lies with BitGo. Finex apparently had a custom setup with BitGo, unlike any other BitGo customer. [...]
Perhaps there is something else going on and I haven't read about it or it isn't public knowledge?

Jeesh, for people who seem to value outside-the-box thinking, you guys are thinking smack-dab inside the box.
BitGo implementation was used so that BFX could continue p2p lending (needed for leverage trading), without having to commingle the customer funds in a wallet it controlled (reason for the CFTC fine they paid).

So BitGo did exactly what was asked of it, allowing BFX to keep doing what it was already doing, without the need to become a licensed futures exchange.

The 64% thing is brilliant. I hear it's basically about what would come from receivership, minus lawyers and years of litigation. Taking a shave off USD deposits was a bold move, tho.

[LogHangingConsortium]

Not sure about choo choo but the price is certainly recovering from the panic dump after the bfx hack.

BFX buyin' BTC with filthy fiat and ... inferior coins? Wonder what'll happen once they open the floodgates...

It's only Sunday. Lets get this thing rolling again.

https://youtu.be/Q_nFwwjBlEc

Taking a shave off USD deposits was a bold move, tho.

-But I don’t like strawberries and cream.
-Comes the revolution, you’ll eat strawberries and cream. And like it. Socialized losses for everyone, Comrade!

[Meuh6879]

Bail-In at bitfinex ...
http://www.zerohedge.com/news/2016-08-07/first-bitcoin-bail-all-bitfinex-users-lose-36-shared-loss-after-historic-hack

Bitfinex announced it would pull a page right out of Europe's bank resolution mechanism, saying that all of its users will lose 36% of their deposits after it concluded its review the massive hack, in what is set to be the first ever "bitcoin bail-in."

[European Central Bank]

Bail-In at bitfinex ...

just goes to show it's those goddamn humans who have to ruin everything despite bitcoin's best efforts. I really hope the bitfinex victims are made whole and then they sue that shithole until it squeals.

[Holliday]

BitGo and BitFinex are both very keen to point out that none of the blame lies with BitGo. Finex apparently had a custom setup with BitGo, unlike any other BitGo customer. [...]
Perhaps there is something else going on and I haven't read about it or it isn't public knowledge?

Jeesh, for people who seem to value outside-the-box thinking, you guys are thinking smack-dab inside the box.
BitGo implementation was used so that BFX could continue p2p lending (needed for leverage trading), without having to commingle the customer funds in a wallet it controlled (reason for the CFTC fine they paid).

So BitGo did exactly what was asked of it, allowing BFX to keep doing what it was already doing, without the need to become a licensed futures exchange.

I don't see how separating wallets by individual depositor requires ignoring proven security methods. Are you suggesting that security and appeasing the CFTC are mutually exclusive?

[AlexGR]

This needs a meme...

Bitfinex haircuts users 36%
Bitcoin wallet user not affected

[Meuh6879]

clearly, virtual wallet ... will be always a trap.
trading will be always ... trapped.

[JayJuanGee]

its really TO BAD, that bitgo didnt have some stupid logic saying if bitfinex asks for >1000Coins to be moved reject it.

It seems like a very obvious thing to do. Suspicious activity should trigger a lockdown and require manual intervention to OK it. The system shouldn't just go "yeah, no problem" when somebody asks to empty out half the Bitcoin vault.

Probably most of us here are novices, and even we can think of various solutions that would put checks on these kinds of likely attacks...

I personally believe manual /human intervention should have been triggered for smaller transactions....

So for example, any time that 50 coins or more is requested to be moved from one account at once or anytime that an accumulation of 1000 coins are requested to be moved in less than 30 minutes... maybe not exactly those triggering levels, but some level that is both manageable and safeguarding.  

[LogHangingConsortium]

BitGo and BitFinex are both very keen to point out that none of the blame lies with BitGo. Finex apparently had a custom setup with BitGo, unlike any other BitGo customer. [...]
Perhaps there is something else going on and I haven't read about it or it isn't public knowledge?

Jeesh, for people who seem to value outside-the-box thinking, you guys are thinking smack-dab inside the box.
BitGo implementation was used so that BFX could continue p2p lending (needed for leverage trading), without having to commingle the customer funds in a wallet it controlled (reason for the CFTC fine they paid).

So BitGo did exactly what was asked of it, allowing BFX to keep doing what it was already doing, without the need to become a licensed futures exchange.

I don't see how separating wallets by individual depositor requires ignoring proven security methods. Are you suggesting that security and appeasing the CFTC are mutually exclusive?

"Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. When an investor decides to invest in the forex market, he or she must first open up a margin account with a broker."

Bitfinex needs to be [a de facto] broker, without having the corresponding license. This is made possible by having p2p lending, but without the central (cold) wallet under BFX control like the good old times (because CFTC). Problem: neither Investor Bob, nor Lenders Alice [through] Zack, are a licensed broker. And yet the full amount of this "p2p loan" must be readily accessible by BFX (to enter and close positions).
Wat do? (This needs to happen in real time, not "in a bit, once we had time to run it past the suits upstairs" because real time trade engine.)

Read more: How does leverage work in the forex market? | Investopedia http://www.investopedia.com/ask/answers/06/forexleverage.asp#ixzz4Gfag38YP
Follow us: Investopedia on Facebook

P.S. " proven security methods" for this sort of thing involve third party security audits (which BFX refused), and a license (so don't have to exploit insecure but technically compliant 2-of-3 implementation).

[Elwar]

I'm ok with the idea of only losing 36% with the alternative being losing everything as they go bankrupt with the chance to get maybe 1-2% back after a long lawsuit and fight to get anything.

They say we'll get BitFinex "tokens" which will be turned into shares of BitFinex stock...but the key here is the way these are issued. If tokens are not fixed to a percentage of the company that represents the current value of the loss then they can just print tokens like dollars and the value of each token would go away quickly.

If, instead, it is a fixed percentage of BitFinex as the value of the company then I'm ok with that. I'd only lose about 10 bitcoins that are converted to shares in a major Bitcoin exchange which could do well in the future.

I'm in this for the long term so risking 10 bitcoins for exclusive access to owning shares of BitFinex is fine with me. It won't break me and I can hope that over the long term it does well.

[LogHangingConsortium]

I'm ok with the idea of only losing 36% with the alternative being losing everything as they go bankrupt with the chance to get maybe 1-2% back after a long lawsuit and fight to get anything.

Promise of 64% of your money back is not the same as 64% of your money back. Count your blessings if you get anything back. The money BFX is spreading around is not theirs to spread. It's their client's money. This seems like a a legal quagmire.

They say we'll get BitFinex "tokens" which will be turned into shares of BitFinex stock...

Why didn't GOx thik of that, amirite? Those tokens are meaningless. BFX is not a public company, it can't legally issue shares (or tokens, or thigamabobs). It's also bankrupt. The SEC will take them down/shut off their $$$ supply (legacy banks).

P.S. How are you liking your socialized losses? Though totally pointless question, not like you have a choice, you'll eat your strawberries and cream and like it, Comrade Elwar

[Holliday]

BitGo and BitFinex are both very keen to point out that none of the blame lies with BitGo. Finex apparently had a custom setup with BitGo, unlike any other BitGo customer. [...]
Perhaps there is something else going on and I haven't read about it or it isn't public knowledge?

Jeesh, for people who seem to value outside-the-box thinking, you guys are thinking smack-dab inside the box.
BitGo implementation was used so that BFX could continue p2p lending (needed for leverage trading), without having to commingle the customer funds in a wallet it controlled (reason for the CFTC fine they paid).

So BitGo did exactly what was asked of it, allowing BFX to keep doing what it was already doing, without the need to become a licensed futures exchange.

I don't see how separating wallets by individual depositor requires ignoring proven security methods. Are you suggesting that security and appeasing the CFTC are mutually exclusive?

"Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. When an investor decides to invest in the forex market, he or she must first open up a margin account with a broker."

Bitfinex needs to be [a de facto] broker, without having the corresponding license. This is made possible by having p2p lending, but without the central (cold) wallet under BFX control like the good old times (because CFTC). Problem: neither Investor Bob, nor Lenders Alice [through] Zack, are a licensed broker. And yet the full amount of this "p2p loan" must be readily accessible by BFX (to enter and close positions).
Wat do? (This needs to happen in real time, not "in a bit, once we had time to run it past the suits upstairs" because real time trade engine.)

Read more: How does leverage work in the forex market? | Investopedia http://www.investopedia.com/ask/answers/06/forexleverage.asp#ixzz4Gfag38YP
Follow us: Investopedia on Facebook

P.S. " proven security methods" for this sort of thing involve third party security audits (which BFX refused), and a license (so don't have to exploit insecure but technically compliant 2-of-3 implementation).

So you are telling me that Finex settled positions via the block chain with these segregated wallets? This doesn't jive with "readily accessible/real time" as confirmations on the block chain take time. If they didn't settle each position via the block chain, but internally or on paper, then why couldn't they use actual security for actual block chain transactions?

P.S. "Proven security methods" only require that they actually be implemented. Third party audits and licenses are only for verification and compliance.

[LogHangingConsortium]

...

So you are telling me that Finex settled positions via the block chain with these segregated wallets? This doesn't jive with "readily accessible/real time" as confirmations on the block chain take time. If they didn't settle each position via the block chain, but internally or on paper, then why couldn't they use actual security for actual block chain transactions?

While the numbers are tallied " internally or on paper," who actually holds the funds? Whose wallets?
How would you do it? Walk me through.

"Proven security methods" only require that they actually be implemented.

But there are no "proven security methods" for an unlicensed futures broker, they don't exist. That's why other exchanges don't offer the stuff that made BFX great. BFX "security measures" were a bluff that got called.

[savetherainforest]

Bail-In at bitfinex ...
http://www.zerohedge.com/news/2016-08-07/first-bitcoin-bail-all-bitfinex-users-lose-36-shared-loss-after-historic-hack

Bitfinex announced it would pull a page right out of Europe's bank resolution mechanism, saying that all of its users will lose 36% of their deposits after it concluded its review the massive hack, in what is set to be the first ever "bitcoin bail-in."

Name of the actor next to R.Kelly ? ... hmm?? (*Edit: nvm... found him... Eric Lane is his name.. )


Also the so called "bail in" ... did they also promised that 36% to be refunded in time back to the users? ... Or ... ? what?  ... I mean did they just went full commies on everyone's asses or they are just doing this temporarily and in time they will refund 1% every month or so? ... And what happens if that person removes the amount 64% that they still have in their account... will they be getting that 36% back in time even if their balance is 0$ / 0BTC ?

[BlindMayorBitcorn]

Those tokens are meaningless. BFX is not a public company, it can't legally issue shares (or tokens, or thingamabobs). It's also bankrupt. The SEC will take them down/shut off their $$$ supply (legacy banks).

But tokens  

[LogHangingConsortium]

^Getting dangerously close to altcoin discussion.

But back to the walls, any rumors on when BFX plans to refloat the Titanic restoke Chernobyl bring the site back online?  Heard something about Monday in zombie mode, should we start painting victory stripes yet?

P.S. watching huobi chart on bitcoinwisdom, look over to the other markets in the top bar, and "huh, finex is up to 604 already ... ? Doh!"

[adamstgBit]

Also the so called "bail in" ... did they also promised that 36% to be refunded in time back to the users? ... Or ... ? what?

bail-in means that you simply use ( take with or without  permission ) other customer deposits to make yourself solvent again.
this is what BFX will do, they will take  36% of all customer deposit from all accounts and assets in order to cover the missing 119K BTC.

are just doing this temporarily and in time they will refund 1% every month or so?

no this is a one time deal which will make BFX whole again. everyone losses 36% and thats all there is to it.

what happens if that person removes the amount 64%

they can't, they can't access their accounts right now, when they do access there account, they will find the BFX  settled all there margin positions and took 36% of their holdings.


i hope this makes it clear.

[adamstgBit]

^Getting dangerously close to altcoin discussion.

But back to the walls, any rumors on when BFX plans to refloat the Titanic restoke Chernobyl bring the site back online?  Heard something about Monday in zombie mode, should we start painting victory stripes yet?

P.S. watching huobi chart on bitcoinwisdom, look over to the other markets in the top bar, and "huh, finex is up to 604 already ... ? Doh!"

my guess is: "zombie mode" as early as monday, and back to full operation by friday.

provided things go smoothly and no one try to sue them or somthing.