Kevin Day, New Bitcoin Multimillionaire worth 5 Million dollars

[Bit_Happy]

Strong passwords are difficult or near impossible to crack(?), so the fat cat is a "dummy" (his money is gone & MtGox not clearly at fault (?)) and all the lucky little people should win.*

It's quite likely that whatever password was cracked would've been more than strong enough had Mt Gox not royally screwed up by losing a copy of their password database and failing to notice for several days. Creating passwords that are brute-force proof once someone's leaked the hash isn't very practical these days as the resulting passwords are too long to remember, especially if you're using different passwords for each site. This is even more true if it was an older password because Mt Gox foolishly stored those as unsalted MD5.

Oh, please do(!) go there, as I asked in another thread:
MtGox has the $1,000/day limit to withdraw, so...
Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

Because they bought them or put them there some time ago in or prior to the 10,000 BTC pizza era and haven't managed to get them out since due to the withdrawal limit? They may not even have logged into Mt Tux or used bitcoins in a long time, for all you know. In fact, given that older passwords are significantly easier to crack than newer ones, it's quite likely that whoever this is hasn't been back in a while.

(The other use for large sums like that is, of course, stabilising the market.)

Also, I'm amused by the sudden outbreak of hate for the Bitcoin super-rich.

MyGox almost certainly did not exist during the 10,000 BTC pizza era.
If you actually believe the words you typed AND you honestly think that I showed any hate for the Bitcoin super-rich, then there is nothing more I could possibly want to talk to you about. Enjoy your day makomk.




  


@Anyone else

1) This question is important.
2) This question is unanswered.*
3) This question is for people who do not put words in my mouth or falsely accuse me.
4) It is based on what we are being told about the meltdown, so I do not need to provide evidence.


To be clear: *Unanswered = Actually, someone helped verify it is an important question, and someone else said "the crash was a great thing" (or very similar)

Why would any real person keep over 250,000 coins (or 500,000 ?) in an account unless they were setting up to intentionally crash the market?

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[jgraham]

1) This question is important.
2) This question is unanswered.
3) This question is for people who do not put words in my mouth or falsely accuse me.
4) It is based on what we are being told about the meltdown, so I do not need to provide evidence.
5) Bit_happy isn't just looking for any answer but is looking for an answer that is in his exact words decent ergo it must meet some criteria.  Ergo he must provide said criteria otherwise attempts are moot.

Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

Fixed it for you.

[Bit_Happy]

Fail.
Any rational answer will do. Any answer other than setting up to crash the market. Can anyone else provide an answer?

[kjj]

I am being respectful and trying to keep a civil tone, I would very much appreciate if you did the same.

You are indeed, and I usually don't default to that mode.  Don't take it personally.

You quote anti-counterfeiting laws, when you should instead have dusted off your copy of Black's and looked into money, currency and current money.  Bitcoin is neither a banknote, nor a currency, as so defined, and makes no claims to be either.

Black's? Really? You do know that Black's is simply used for basic definitions, right? It is mostly used in law school. I don't even know where my copy is! If I remember my days from law school correctly, he may even have used Bouvier's own outdated definition of currency as "The money which passes, at a fixed value, from hand to hand; money which is authorized by law."  

Nowadays currency is recognised as a generally accepted exchange of value, this arises from Friedman and Schwartz famous paper, "The Definition of Money: Net Wealth and Neutrality as Criteria Journal of Money", Credit and Banking, Vol. 1, No. 1, Feb., 1969. I would also refer you to this definition in Ellinger, Lomicka and Hooley's "Modern Banking Law", Oxford Univeristy Press, 2002, p.362.

The legal definitions of currency keep coming back to "authorized by law", which makes the law you quoted against issuing currency a law against counterfeiting.

To be sure, we talk informally on these forums, and toss around the terms "money" and "currency" with wild abandon.  Our informal words don't change the reality of the situation, nor their legal status.

They can be used legally as proof of intent. Bitcoin calls itself a P2P currency, it fulfils the actions of money, namely, it is value exchanged by parties other than the issuer for goods and services.

Bitcoin calls itself nothing.  It has no voice, and it has no inscription.  Promoters of bitcoin make various claims, but so far I haven't seen anyone make any claims that would get them into trouble with counterfeiting laws.  Please observe that if you think bitcoin is illegal because it is "value exchanged by parties other than the issuer for goods and services", then barter is illegal in your world, which is simply not true in any part of this world, so far as I'm aware.

Bitcoin is even better, since there is no such thing that anyone can point to, not even an abstract concept, and say "This is a bitcoin".  What we are really doing when we "send bitcoins" to others is transferring an interest, another word you have forgotten since law school.

Please, could you leave the snarky ad homs? You really want to use the intangible explanation? Really? By that argument, there is no such thing as an EFTPOS because you cannot point to a thing being transferred. There are no funds transfers from bank accounts because no physical bills and coins are being exchanged.

And I can assure you that the courts have been dealing with intangible interests for hundreds of years, and have no problem with the idea.

Interest? Legally interest is nothing more than a payment on balances maintained in an account. Can you please explain how the entire system of interest works on Bitcoin? Who holds the balance? Who pays out the interest? How is it calculated?

You sound more like a banker than a lawyer, and I don't mean any offense by that.

When I say interest, I'm not talking about consideration paid for a debt.  I mean that a person can have an interest in something that they do not own, and that this interest can be defended in court.  An easement is a typical example.

In the bitcoin system, there is no such "a bitcoin".  Not even as an intangible good.  It is an abstraction of an abstraction.  When I say that my wallet has 10 bitcoins in it, I am speaking very informally, and very incorrectly.  What I really have is a set of cryptographic keys that I can use to prove that someone has given me control of a number by giving control of a number to someone else.  Those control relationships, and the value that I can get by using them, are my interest in the system, and at least in the US, the courts will have no problem hearing a case regarding that interest.

[Dobrodav]

  There is at least 90 % chance that IF that mass of BTC was stored in ONE account - that was done intentionally,
to ruin or manipulate market.

  It looks like "hacker" got very little profit, compared to efforts. And we should hope, that this efforts was relatively high - if that was done by 12-yo school boy, or something like that (20 % chance, like i am see the situation - to high),  -  than mtgox done for sure. If profit was nothing to hacker - than it was intentional attack.

- Tin foil hat on
  Dissolving mtgox (20% chance) leaves us in situation , when Bitcoins will be thrown 1 year back in acceptance level. Bad, but not really disaster.

  Where the hacker got the money ? Hacked wallets ? Don`t think so. To much money, - that guys, that have really big sums,  know very well how to store their BTC.
Mass hack of mtgox accounts ? Very possible, it is the most possible answer. But that thing is reversible,  and mtgox can restore accounts, at least to some point in time.
Some old BTC owner died/killed/tortured/drugged  and give up his wallets ? Well, there is some probability of that. It even slightly bigger than probability, that all this mess, was a result of child play on daddy`s computer.
Some old early adopter just forgot, that sometime he mined all that BTC. Than he saw some media article about BTC - "Wow - they even got exchange now! I am a rich !"  And sold all of them out, - now he is confused - " Hm, something vent wrong..." There is a very low chance of this, but that variant is interesting, because than, no rollback should occur.

  Last, most danger, and least possible version - that`s money came from nowhere. Somebody tricked bitcoin protocol and inflate system with freshly "counterfeited" money. Well, that means the end of BTC.  This is very very unlikely. But this version should be studied first, than thrown away, because this is the only version that really damage bitcoin protocol itself.

- Tin foil hat off

[jgraham]

Fail.
Any rational answer will do. Any answer other than setting up to crash the market. Can anyone else provide an answer?

Fail.  People don't always act rationally.

[Bit_Happy]

 There is at least 90 % chance that IF that mass of BTC was stored in ONE account - that was done intentionally,
to ruin or manipulate market.
....

+500,000 BTC  
Based on what we currently know:
There is at least 90 % chance that IF that mass of BTC was stored in ONE account - that was done intentionally,
to ruin or manipulate market.

At this time Dobrodav has answered the important question, IMO.

[kjj]

No.
I don't need standards of evidence to ask a question*, now do I?
*The question is based on what we are currently told about the melt-down.

Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

How about because they stopped caring about bitcoin many months ago, and are totally unaware that their account is now worth some serious cash?

[Dobrodav]

No.
I don't need standards of evidence to ask a question*, now do I?
*The question is based on what we are currently told about the melt-down.

Why would any real person keep over 250,000 coins in an account unless they were setting up to intentionally crash the market?

How about because they stopped caring about bitcoin many months ago, and are totally unaware that their account is now worth some serious cash?

Well it is possible, and explains why his password was broken easly - it was just raw md5 hash.

[Anduril]

holy ####! all other virtual and non virtual currencies not issued by some governments must be illegal

Most of them are, if they meet the definition of currency, and pass themselves off as currency.

lets shut down any site using any sort of credits and tokens, they are clearly have no right to assign you their currencies in exchange for a government issued money, lets start with FB and WOW for starters

Not currency. Credit tokens are credit tokens, they are a separate legal entity covered under consumer credit contracts. WoW and other virtual currencies are not accepted as means of payment by parties other than the issuer (definition of currency). There is a black market for WoW gold, but this is illegal as currency by the very definition of Blizzard's ToC.

lets go after anyone doing any trades and any barters not made in fiat currencies

These are not currencies, they are commodities, they have legal definitions (and are regulated).

lets shut down all casinos and gambling sites for playing and exchanging chips for money

Chips are not currency, they are not accepted as means of payment by anyone other than the issuer.

and lastly lets shutdown communities using their own currencies (there is another town in US using own currency other than what was mentioned earlier in this thread)

If that community is issuing value, then it is illegal as well according to U.S. law.

[makomk]

MyGox almost certainly did not exist during the 10,000 BTC pizza era.

Some quick Googling suggests that Mt Gox started trading bitcoins in July 2010 and the 10,000 BTC pizza offer was open until June 2010, so they don't quite overlap but they're close. Before my time though. The growth in the bitcoin-to-USD price seems to have been frankly astounding.

[Serge]

and lastly lets shutdown communities using their own currencies (there is another town in US using own currency other than what was mentioned earlier in this thread)

If that community is issuing value, then it is illegal as well according to U.S. law.

here is link to the story about Pittsboro town in N.C. using their own currency, this is another one from what has been mentioned about CA town earlier in the thread
http://abclocal.go.com/wtvd/story?section=news/local&id=6747829

would love to hear expert view on their legality. from my understanding they are using it since 09 and Capital One bank does USD exchange there
or is it not a real currency according to US law in your view?

[Epinnoia]

I repeat, legally, all over the world, currency is a means of exchange that is accepted for payment for goods and services. This is what Bitcoin does.

18 U.S.C. § 486

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.

I cannot speak for other countries, but I have followed the Liberty Dollar case closely.

Von Nothaus (creator of the Liberty Dollar) ran afoul of the law by making his coins confusingly similar to legal tender coins.  

Have you ever been to a theme park that passed around "Disney Dollars"?  Or an arcade that gave you 8 game tokens for a buck?  They are not violating the law any more than Bitcoins do.

I have also spoken with an attorney who specializes in commodities law.  Even he said that they're not illegal under US Law.  But if you are a merchant, and you accept them for goods/services, you must STILL PAY TAX based on the value of the thing being sold.  In other words, if you give someone a $1000 item in exchange for XX bitcoins, you will still be legally expected to report that as a $1000 sale, and pay appropriate taxes as though you took the $1000 as cash.

[Anonymous]

If mt gox only uses representations of actual bitcoins couldnt someone just add 500 000 fake bitcoins to the database and sell them thereby crashing the market ?

[kjj]

If mt gox only uses representations of actual bitcoins couldnt someone just add 500 000 fake bitcoins to the database and sell them thereby crashing the market ?

Yes, but again, this would be fairly easy to roll back.  A better attack would be to bleed them out slowly, and hope that no one notices.

And if the claims from gox are true, the whole point of the audit that started this fiasco was to demonstrate that the account balances in their system matched the account balances in their bitcoin wallets.

[Epinnoia]

And if the claims from gox are true, the whole point of the audit that started this fiasco was to demonstrate that the account balances in their system matched the account balances in their bitcoin wallets.

Actually, in the interview 2 nights ago, they were asked why the auditor had access to the live database.  The answer given was that it was to make sure that MtGox wasn't manipulating the displayed buy/sell prices -- and thus gaming the entire system.  

[fireside]

Anyone know what country this Kevin guy lives in? If it is some third world country then none of this matters he gets away with it. If it is USA then he is screwed since he admits he knew something was wrong and still attemtped to (steal) as much as he could before the the site was closed. Its like seeing someone rob a bank, drop some money on the ground while he ran away, then grabbed as much as he could before the cops came....

[makomk]

Actually, in the interview 2 nights ago, they were asked why the auditor had access to the live database.  The answer given was that it was to make sure that MtGox wasn't manipulating the displayed buy/sell prices -- and thus gaming the entire system.

Which still doesn't explain why they had access to users' passwords. Pretty much all databases can control which tables a particular user is allowed to read, and even if they did need access to the other information in the user table it's trivial to set up a view with just the non-sensitive columns and only allow access via that. Basically Mt Gox screwed up big time.

[Anduril]

In the bitcoin system, there is no such "a bitcoin".  Not even as an intangible good.  It is an abstraction of an abstraction.  When I say that my wallet has 10 bitcoins in it, I am speaking very informally, and very incorrectly.  What I really have is a set of cryptographic keys that I can use to prove that someone has given me control of a number by giving control of a number to someone else.  Those control relationships, and the value that I can get by using them, are my interest in the system, and at least in the US, the courts will have no problem hearing a case regarding that interest.

Sorry for the late reply, busy day today. I'll keep it short to this point, which I think is important. Sorry if I sound like a banker, I specialise in financial law and e-commerce, hence my interest in Bitcoin, mostly from a European perspective though.

I'm interested to pursue this concept. I completely disagree that bitcoins are abstractions of an abstraction, they fulfil the meaning of an intangible good. They are created, allocated and transferred according to strict rules, encryption protocols and algorithms, 10 BTCs are 10 BTCs, the system recognises that there is such thing and it can be followed in a rather secure manner. True, these are cryptographic keys, but the keys represent an intangible good, just like the bits in a bank's server represent your account's balance. The law is perfectly fine with abstract representations of value. Nowadays, this is really what most capital is.

So, if these units of value are being used to pay for goods and services, that means that someone is pumping value into the economy in the shape of a cryptocurrency. I believe that there is a good chance that this may be deemed illegal by regulators. As of today, EFF has also its own doubts, and have decided to abandon Bitcoin.

I know EFF's lawyers will not have taken this decision lightly, they must be worried by many of the same things that worry me from a legal perspective.

[Anduril]

Anyone know what country this Kevin guy lives in? If it is some third world country then none of this matters he gets away with it. If it is USA then he is screwed since he admits he knew something was wrong and still attemtped to (steal) as much as he could before the the site was closed. Its like seeing someone rob a bank, drop some money on the ground while he ran away, then grabbed as much as he could before the cops came....

Kevin did not steal anything, he completed a trade. Unless he was the hacker, he did not steal anything. We are trying to establish exactly what BTCs are, but one thing is clear, they would not be subject to theft laws.