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

[Dragonkiller]

@thelema93

[10:58] <JonWickedFire> Is that Crisis Strategy Draft even legit?
[11:04] <MagicalTux> more or less
[11:05] <MagicalTux> as the name suggests it's a draft, and it's a bunch of proposals to deal with the issue at hand, not things that are actually planned and/or done

which channel is this from?

http://www.wickedfire.com/shooting-shit/179038-my-conversation-mark-karpeles-mtgox-2.html

http://www.foxbusiness.com/markets/2014/02/25/mt-gox-ceo-says-on-internet-chat-hasnt-given-up/

From reading this chat log (if its authentic) I immediately come to the following conclusions:

• They did not have a cold wallet, it was one huge hot wallet, implemented by MT.
• Occasionally it lost (or failed to store correctly or deleted¹) private keys of its own change outputs ('not "lost" just yet, just temporarily unavailable')
• He seems to believe the keys are still there somewhere buried deeply somewhere in his database server ('We haven't given up')

_____________________
¹) This is how I imagine their wallet worked (and how it fucked up):

User initiates withdrawal:

* debit amount from user account
* generate new private key for change address and create tx
* store tx in database (indexed by txid)
* store private key in database (indexed by address, foreign_key=txid)
* push tx to network

a week later (cron job)

* for all unconfirmed tx older than 1 week:
*     credit BTC back to customer account
*     delete "invalid" tx
*         -> cascaded delete "unused" change address and its private key (ouch!)

run 2 years until wallet is dry, all supposed UTXO turn out to be STXO and all real UTXO are in nirvana already.

so no one has access to those coins? their private keys have been lost?

[1714810113]

1714810113

[Denton]

I've got a feeling the market behavior to the MtGox failure will be like the reaction to the Silk Road closure.

Confirmed!

[theonewhowaskazu]

I've got a feeling the market behavior to the MtGox failure will be like the reaction to the Silk Road closure.

coming from my you I
LOL ed

I think so too, but shouldn’t mention it until my fiat clears hopefully before Friday.  750,000 XBT the market thought was sloshing around just got removed, from the Bitcoin pool.

Why do people keep saying they are gone? Just because I steal a coin from you it doesn't make it any less of a coin? What am I missing?

If there is an exchange,

and it has 10k coins on it say.

And then, 10k get stolen.

The 10k is still on that exchangers books.

but another 10 k belongs to a hacker.

So the hacker will maybe send the 10k to another exchange. Now there's 20K for the original 10k.

Now picture that for 750k. That has the potential to make a big difference.

No, it's not.

That argument would work, except for the fact that its factually incorrect. If there weren't BTC in gox that were fake, people wouldn't have lost anything in the crash, lol. There were coins on Gox's books, and at least some of those are lost now. Those lost coins could easily be on some other exchange, effectively being double-counted.

[Arcas]

Silk Road and MtGox were providing about 90% of Bitcoin's bad publicity. Now they are both gone.



Next stop, Moon.

[creekbore]

Have caught up from yesterday, but I'm wondering about the statement from Jeff Garzik from about 20 hours back -- was that confirmed as being fake or has it been forgotten about -- I haven't got the link but I seem to recall it saying "keep the faith" etc etc and was generally positive in terms of a Gox outcome.

[Spaceman_Spiff]

¹) This is how I imagine their wallet worked (and how it fucked up):

User initiates withdrawal:

* debit amount from user account
* generate new private key for change address and create tx
* store tx in database (indexed by txid)
* store private key in database (indexed by address, foreign_key=txid)
* push tx to network

a week later (cron job)

* for all unconfirmed tx older than 1 week:
*     credit BTC back to customer account
*     delete "invalid" tx
*         -> cascaded delete "unused" change address and its private key (ouch!)

run 2 years until wallet is dry, all supposed UTXO turn out to be STXO and all real UTXO are in nirvana already.

That scenario would be seriously bullish long term

[Dragonkiller]

¹) This is how I imagine their wallet worked (and how it fucked up):

User initiates withdrawal:

* debit amount from user account
* generate new private key for change address and create tx
* store tx in database (indexed by txid)
* store private key in database (indexed by address, foreign_key=txid)
* push tx to network

a week later (cron job)

* for all unconfirmed tx older than 1 week:
*     credit BTC back to customer account
*     delete "invalid" tx
*         -> cascaded delete "unused" change address and its private key (ouch!)

run 2 years until wallet is dry, all supposed UTXO turn out to be STXO and all real UTXO are in nirvana already.

That scenario would be seriously bullish long term

Yeah, I was under the impression that the coins had been stolen, but in this scenario, 750,000 coins have been permanently removed from the monetary base.

[derpinheimer]

not to mention someone who sold 1k coins into buy wall at 550, he's gonna get butthurt pretty quick if he thought he would be able to buy back in cheaper

550 will be seen again, guaranteed.

You.. wanna bet on that?

If you are going to bet, bet on the market. If you believe that its not going to go past $550, buy buy buy then right now.

I just think saying we wont see 550 again is silly. I wont make much by betting on that in the market.

Actually, he said it will be seen again

Wow I need to get more sleep.. LOL!!

[bitclown]

Silk Road and MtGox were providing about 90% of Bitcoin's bad publicity. Now they are both gone.

There's still a lot of sad stories to be written about the 0.75 million BTC that honest, clueless traders lost on Empty Gox. I'm extremely happy that Gox finally outgoxxed themselves, but were losses of this magnitude really "priced in"?

[ChartBuddy]

Explanation

[Ivanhoe]

4H MACD crossover in 3...2...1....

[analytics]

¹) This is how I imagine their wallet worked (and how it fucked up):

User initiates withdrawal:

* debit amount from user account
* generate new private key for change address and create tx
* store tx in database (indexed by txid)
* store private key in database (indexed by address, foreign_key=txid)
* push tx to network

a week later (cron job)

* for all unconfirmed tx older than 1 week:
*     credit BTC back to customer account
*     delete "invalid" tx
*         -> cascaded delete "unused" change address and its private key (ouch!)

run 2 years until wallet is dry, all supposed UTXO turn out to be STXO and all real UTXO are in nirvana already.

That scenario would be seriously bullish long term

Yeah, I was under the impression that the coins had been stolen, but in this scenario, 750,000 coins have been permanently removed from the monetary base.

I seriously doubt they lost keys, this sounds like FUD and doesnt seem to match the stated words.   It was explicitly stated coins were stolen.  Either the trans. malleability or through an insider there.   My guess is an insider at the company was involved in discovering it (bug) and hiding the thefts thereafter (coverup).  Anyone who stole who thinks they will get away I think will be in for a rude awakening.   The internal data on user accounts involved and IP's, btc addresses needs to be made public so the public can trace it.   Almost seems certain an insider was involved (perhaps not Mark)...there is no way they wouldnt have noticed it without some coverup going on.



  

[deadfi$h]

@thelema93

[10:58] <JonWickedFire> Is that Crisis Strategy Draft even legit?
[11:04] <MagicalTux> more or less
[11:05] <MagicalTux> as the name suggests it's a draft, and it's a bunch of proposals to deal with the issue at hand, not things that are actually planned and/or done

which channel is this from?

http://www.wickedfire.com/shooting-shit/179038-my-conversation-mark-karpeles-mtgox-2.html

http://www.foxbusiness.com/markets/2014/02/25/mt-gox-ceo-says-on-internet-chat-hasnt-given-up/

From reading this chat log (if its authentic) I immediately come to the following conclusions:

• They did not have a cold wallet, it was one huge hot wallet, implemented by MT.
• Occasionally it lost (or failed to store correctly or deleted¹) private keys of its own change outputs ('not "lost" just yet, just temporarily unavailable')
• He seems to believe the keys are still there somewhere buried deeply somewhere in his database server ('We haven't given up')

_____________________
¹) This is how I imagine their wallet worked (and how it fucked up):

User initiates withdrawal:

* debit amount from user account
* generate new private key for change address and create tx
* store tx in database (indexed by txid)
* store private key in database (indexed by address, foreign_key=txid)
* push tx to network

a week later (cron job)

* for all unconfirmed tx older than 1 week:
*     credit BTC back to customer account
*     delete "invalid" tx
*         -> cascaded delete "unused" change address and its private key (ouch!)

run 2 years until wallet is dry, all supposed UTXO turn out to be STXO and all real UTXO are in nirvana already.

What kind of company wouldn't keep simple database backups though? Any company that runs a website would do that and definitely one that processes financial transactions.

That would be absolute insanity if MK could be that stupid.

[billyjoeallen]

¹) This is how I imagine their wallet worked (and how it fucked up):

User initiates withdrawal:

* debit amount from user account
* generate new private key for change address and create tx
* store tx in database (indexed by txid)
* store private key in database (indexed by address, foreign_key=txid)
* push tx to network

a week later (cron job)

* for all unconfirmed tx older than 1 week:
*     credit BTC back to customer account
*     delete "invalid" tx
*         -> cascaded delete "unused" change address and its private key (ouch!)

run 2 years until wallet is dry, all supposed UTXO turn out to be STXO and all real UTXO are in nirvana already.

That scenario would be seriously bullish long term

Yes, if current prices do not reflect the true scarcity of coins in circulation. But we don't know for sure that's what really happened.

[Adrian-x]

I've got a feeling the market behavior to the MtGox failure will be like the reaction to the Silk Road closure.

coming from my you I
LOL ed

I think so too, but shouldn’t mention it until my fiat clears hopefully before Friday.  750,000 XBT the market thought was sloshing around just got removed, from the Bitcoin pool.

Why do people keep saying they are gone? Just because I steal a coin from you it doesn't make it any less of a coin? What am I missing?

It isn’t missing, it is trading in the open market or is in cold storage, where ever it is, it’s been part of the status quo, because it wasn’t trading on Gox.  That is the market equilibrium is unlikely to change anytime soon.  

[Walsoraj]

There isn't enough fiat on Stamp to sustain this rally. The order book only shows about 13 mill right now. Sure there is some off book too. But not likely near what Gox had before the malleability issue. I remember ~40 mill on book. I bet 2-3x of that off book.

[mzp]

positive posts to read! The troops look a little beat up, but morale is high…

https://www.youtube.com/watch?v=83bmsluWHZc

[portfail]

Reading the chatlog i came up with a theory that looks increasingly probable to me.
(until i read prof7bit's explanation which came up while typing this and can be even closer to the truth but i can't comment on the technical side)

Someone's gone missing with the second/third key.Either kidnapped or gone rogue,probably blackmailing
"technically speaking it's not "lost" just yet, just temporarily unavailable"

This ties in with the "security concerns" the other guys will need his key also and "third parties involved"
Looks like he sees the coins not spent but he can't control them for some reason.

That can also explain how the document has some real figures and maybe things they were discussing among them if that is what he is admitting with "more or less" but "this document was not produced by MtGox".
[11:13] <MagicalTux> [01:09:51] <JonWickedFire> Do you think it was leaked by someone purposely to hurt you personally or gox in general? <- I have some doubts

Mark has always appeared to me like a shy nerd,currently in deep trouble.
[11:22] <JonWickedFire> How does that make you feel to hear or see people you bailed out yourself and stood up for over the years, turn on you like that?
[11:22] <MagicalTux> not good

Other variation on this is if he is in regulatory trouble (maybe something similar to Charley Shrem situation) which is preventing him from accessing the deposit box in which the keys are stored.

[cbutters]

I hate to bring this up with the stigma... but is it just me or is the volume on btcchina creeping up?

[Loozik]

24 hours lapsed since halting the trading...

Time to bed. Hopefully tomorrows things will be clearlier.