Connecting a few dots

[Clipse]

Ok, the new ones are crypt MD5 salted hashes. But 2 months ago they were all plain MD5 unsalted.

Let me try to go more descriptive here, to see if you understand my line of deduction:

Notice there the evolution in the prices 2 months ago:



My theory goes around that by such time MtGox's db was already compromised.
At this point the hacker would start to get pwds and entering some accounts to check its users' activity. Allowing him to sort some dormant accounts with credit. Those with BTC on it were probably just wiped out, those with USD the hacker used it to buy BTC (bringing the price up this way) and later cashed out the BTC resulting from those trades.
Some of those users started to complaint to M'Tux who decided to implement his crypt(pass,salt) function. Up to this point, and up to yesterday M'Tux was most likely believing it was about users' giving away their passwords not his site fault.

Lately the thief tripped some wires or the legit owners checked their accounts making a load of requests to MtGox who came forward and put that thread on the forum. Seeing this, the robber decides to go on his final blow... and here we are.

ASSUMPTIONS ARE THE MOTHER OF ALL FUCKUPS, just had to quote that.

So you just deduced without any facts or actual reasoning that thousands of $ and BTC were spend across multiple mtgox accounts from as far back as 2months yet the owners of these accounts would not have realised it? Are you on crack or just fear mongering now?

I believe users could have been compromised from the USERS side and not from MTGOX side at anytime since mtgox launched because that is possible with any user/pass from any site if the user is a total imbecile.

Yes the robber went on his final blow to steal a GRAND TOTAL of $1000, what a brilliant plan he worked on for 2 months and got away with absolute squat.

This whole heist looked alot more like something that was planned and executed within a 2day span(perhaps even same day) and not thoroughly thought out at all unlike your conspiracy of a 2month heist in progress with jacking up prices then crashing it.

[Torminalis]

In order for this to be true, there would have to have been a fortune in dormant cash laying around on MtGox servers, being spent unoticed by the actual account owner.

If you had half a million bucks in MtGox and noticed the price going up, would you check or just shrug your shoulders and move along. I think, like I was, you would be watching in awe as your money dissapeared as the price went up. This forum would have been alight with indignation.

I think your theory is both flawed and slightly paranoid.

[BCEmporium]

@Clipse

Being active 24/7 was mostly your protection (and not a super-duper password), if my theory checks and the robber was smart to carry on with his scheme for all this long.

Yes the robber went on his final blow to steal a GRAND TOTAL of $1000, what a brilliant plan he worked on for 2 months and got away with absolute squat.

This is plain bullshit, and this is the point that made me believe more how untrustworthy mtgox is, by staging he just lost 100 or 200 btc, whereas the blockchain and people lucky enough to buy those cent bitcoins and withdraw them claiming here to have withdraw it with success. Losses are certainly way above the 1K USD. If it was for 1K, mtgox would be open by now.

[hugolp]

I fail to see how a hacker with access to the DB could have created the price bubble.

You and everybody else. The state of the forum is sad, but I think this thread is a new low.

[BCEmporium]

OK, I see no point on speculate more.
Be happy, cheers...

[DamienBlack]

This is plain bullshit, and this is the point that made me believe more how untrustworthy mtgox is, by staging he just lost 100 or 200 btc, whereas the blockchain and people lucky enough to buy those cent bitcoins and withdraw them claiming here to have withdraw it with success. Losses are certainly way above the 1K USD. If it was for 1K, mtgox would be open by now.

In order to withdraw them they would have had to be active during the 20 minutes after it happened (all of those orders were there before the sell off, no one could get in orders during the sell off) and during that time mt gox's website was moving at a crawl. On top of that, there is a $1000 withdraw limit. I know, from experience, that this withdraw limit is based on the 24 day weighted average. At the end of the sell off that average was about $4, or about 250 bitcoins.

So if 50 people got to withdraw the full 250 bitcoins that they didn't have in there account before the crash, then mt gox will have to cover 12,500, or about $150,000. The daily volume lately has been around $400,000. Mt gox gets about 1.3% of that $400,000, or $5,200 a day. That means that this incident cut in a little bit to this months profit.

We know mt gox has over 400,000 bitcoins on hand (it is right there in the block explorer), so even if they don't have money to cover it, and go on a sort of "fractional-reserve", the fraction would be almost 1. (400,000-12500)/400,000 = 0.96. That just isn't a worrisome fraction. And even if they take a 70% hit in volume, they will be able to make up that fraction in a month or two.

EDIT Where are the people claiming to withdraw with success? I know they didn't withdraw anything huge like the 260,000 that went for a penny, because I would see that in the block explorer.

[Clipse]

This is plain bullshit, and this is the point that made me believe more how untrustworthy mtgox is, by staging he just lost 100 or 200 btc, whereas the blockchain and people lucky enough to buy those cent bitcoins and withdraw them claiming here to have withdraw it with success. Losses are certainly way above the 1K USD. If it was for 1K, mtgox would be open by now.

In order to withdraw them they would have had to be active during the 20 minutes after it happened (all of those orders were there before the sell off, no one could get in orders during the sell off) and during that time mt gox's website was moving at a crawl. On top of that, there is a $1000 withdraw limit. I know, from experience, that this withdraw limit is based on the 24 day weighted average. At the end of the sell off that average was about $4, or about 250 bitcoins.

So if 50 people got to withdraw the full 250 bitcoins that they didn't have in there account before the crash, then mt gox will have to cover 12,500, or about $150,000. The daily volume lately has been around $400,000. Mt gox gets about 1.3% of that $400,000, or $5,200 a day. That means that this incident cut in a little bit to this months profit.

We know mt gox has over 400,000 bitcoins on hand (it is right there in the block explorer), so even if they don't have money to cover it, and go on a sort of "fractional-reserve", the fraction would be almost 1. (400,000-12500)/400,000 = 0.96. That just isn't a worrisome fraction. And even if they take a 70% hit in volume, they will be able to make up that fraction in a month or two.

EDIT Where are the people claiming to withdraw with success? I know they didn't withdraw anything huge like the 260,000 that went for a penny, because I would see that in the block explorer.

BCemporium said exactly how he handles his facts, by _speculation_

He isnt interested in sensible analysis that you provided above however hyped up propaganda conspiracies is the order of his day.

[cypherdoc]

Ok, the new ones are crypt MD5 salted hashes. But 2 months ago they were all plain MD5 unsalted.

Let me try to go more descriptive here, to see if you understand my line of deduction:

Notice there the evolution in the prices 2 months ago:



My theory goes around that by such time MtGox's db was already compromised.
At this point the hacker would start to get pwds and entering some accounts to check its users' activity. Allowing him to sort some dormant accounts with credit. Those with BTC on it were probably just wiped out, those with USD the hacker used it to buy BTC (bringing the price up this way) and later cashed out the BTC resulting from those trades.
Some of those users started to complaint to M'Tux who decided to implement his crypt(pass,salt) function. Up to this point, and up to yesterday M'Tux was most likely believing it was about users' giving away their passwords not his site fault.

Lately the thief tripped some wires or the legit owners checked their accounts making a load of requests to MtGox who came forward and put that thread on the forum. Seeing this, the robber decides to go on his final blow... and here we are.

the $1000 limit withdrawal applied to BTC so why would they convert USD to BTC only to be limited from cashing out? 

your theory is crazy.  stealing either USD or BTC from mtgox would have resulted in a FALL in the price of BTC as liquidity was being stolen out of mtgox, not the other way around.

[BCEmporium]

the $1000 limit withdrawal applied to BTC so why would they convert USD to BTC only to be limited from cashing out?

The 1k limit applies to both, USD and BTC. It's 1k USD or BTC equivalent. Besides to withdraw USD you would need to do it to LR or Dwolla, leaving a trail. BTC just "uploads to network".
The lost of liquidity would take a while to kick him if you use dormant accounts, from long-mid term investors.

@DamienBlack

Look at the blockchain. Even 5 blocks were solved in a row right after the incident. It's hard to tell if the robber had 1 or 1000 accounts and how much was the damage. MtGox's covered in secrecy.



Bottom line: You're all assuming that the hacker was dumb, just grab the db and wrecked the place. I'm putting to THEORY he could run this for a while until see himself cornered and wrecked it up.

[Clipse]

Ok, I will play into your conspiracy game for the heck of it.

Once mtgox goes live and the price wasnt meant to be around 17.50 at this time, I am sure the price will suddenly just go down to about $1-$2 where it hanged about 2months ago.

If this doesnt happen, I will give you atleast a freeroll of 7days, then can we atleast agree you are full of shit and a conspiracy hog?

[BCEmporium]

Actually, by the previous trend I would believe it's price to be around 5 by now.
Still, if I'm right, not even by creating a "fractional-reserve" MtGox will be able to stand up again.

[TraderTimm]

Actually, by the previous trend I would believe it's price to be around 5 by now.
Still, if I'm right, not even by creating a "fractional-reserve" MtGox will be able to stand up again.

So, yes or no?

Your stance is Mt.Gox fails, and the price stays at 5.00 BTC/USD?

Really, go on, we want this on the record before they re-open.

[BCEmporium]

I'm not betting, this is an apocalyptic hypothesis, but still sustainable by the available data.
And no, I'll NOT be happy if I'm right. Being a pessimistic I'm used to be happy when I'm wrong.

Just by looking at the monitor, I can count 10 blocks solved (maybe more, they're hiding under the trade dots) during the attack. This means the blockchain was on fire with so many transactions going on. And the blockchain doesn't move because there was a trade at MtGox, it moves because someone was inputing a huge load of transactions to it.

[TraderTimm]

I'm not betting, this is an apocalyptic hypothesis, but still sustainable by the available data.
And no, I'll NOT be happy if I'm right. Being a pessimistic I'm used to be happy when I'm wrong.

Just by looking at the monitor, I can count 10 blocks solved (maybe more, they're hiding under the trade dots) during the attack. This means the blockchain was on fire with so many transactions going on. And the blockchain doesn't move because there was a trade at MtGox, it moves because someone was inputing a huge load of transactions to it.

Okay, so tell us what your stance is. (Before Mt.Gox opens.)

[BCEmporium]

Looking at that piece from the blockchain my best guess would be it to be depleted or nearly depleted and replacing bitcoins with phoony coins to run in fractional-reserve-like for a while in an attempt to restore the lost income.
Due to the confidence lost this is most likely to fail. Time will tell...

Sorry if this doesn't cheer you up guys, keep in mind this is ONLY a theory. And if nothing else helps, maybe they sell Prozac at SR.

[TraderTimm]

Okay, this is like nailing jello to a wall trying to get an answer out of you, but here's one more try.

Do you think Mt.Gox will fail:

A) Yes

B) No

Do you think the BTC/USD rate will be at 5 or lower 24 hours after Mt.Gox re-opens?

A) Yes

B) No

Time is ticking away, let us know...

[realnowhereman]

I'm not betting, this is an apocalyptic hypothesis, but still sustainable by the available data.
And no, I'll NOT be happy if I'm right. Being a pessimistic I'm used to be happy when I'm wrong.

Just by looking at the monitor, I can count 10 blocks solved (maybe more, they're hiding under the trade dots) during the attack. This means the blockchain was on fire with so many transactions going on. And the blockchain doesn't move because there was a trade at MtGox, it moves because someone was inputing a huge load of transactions to it.

Block production does not go up because there are more transactions pending.  Unless you think the hash rate of the network suddenly shot up at the exact moment of the heist?

It's just chance that five were made close to each other.  If one miner accepted all of the transactions that happened around the disaster, then they were all in the first block, the following four were completely redundant.

[BCEmporium]

Q1: Most likely
Q2: Probably not, MtGox was just one exchange, the others will hold its value for a while. My best guess would be a meeting point around 6~7, depends on how long they can stand the inflated btc value.

[BCEmporium]

Block production does not go up because there are more transactions pending.  Unless you think the hash rate of the network suddenly shot up at the exact moment of the heist?

It's just chance that five were made close to each other.  If one miner accepted all of the transactions that happened around the disaster, then they were all in the first block, the following four were completely redundant.

There's a limit of transactions a block can contain I know you can solve empty blocks, but the spike on demand created a spike on supply.
This is actually an unforeseen event, would be interesting, when the dust settles, to study this behavior and its influence in the blocks generated on. I would believe in "chance" if it was 2 or 3, but I count there 10 blocks during the attack and then the 2 following solved blocks appears to be what it does regularly.

[realnowhereman]

There's a limit of transactions a block can contain I know you can solve empty blocks, but the spike on demand created a spike on supply.
This is actually an unforeseen event, would be interesting, when the dust settles, to study this behavior and its influence in the blocks generated on. I would believe in "chance" if it was 2 or 3, but I count there 10 blocks during the attack and then the 2 following solved blocks appears to be what it does regularly.

I'm sorry to say you're confused about how the bitcoin block system works.  Yes, there is a size limit (entirely arbitrarily set), but once that limit is reached it doesn't somehow make solving a block magically easier.  The excess transactions just have to wait.

Think about it: if it were possible to artificially increase the rate of block production in any way then the entire proof-of-work system that bitcoin relies on for its security would be broken.

The transactions are not conceptually part of the blocks; the block stores one hash that represents any number of transactions.  One number.  That's it.

It's better to think of the transactions as a block of random binary bytes that the block system timestamps.