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JonasKohlheim
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June 21, 2011, 01:11:11 PM
 #1

NOTE: Ignore this topic for the time being, sorry
So here is an explanation of:
1) What has happened on Sunday
2) Why a rollback is the only right call

I've decided to put this in a seperate topic so that this information can reach a slightly larger audience.

Here is what happened on Sunday 19th of June
All of the following buy orders got executed on Sunday 19th of June, causing the price to crash from $ 17.51 to 0.01 $ in a minute
http://pastebin.com/J0HXBjWu

Now, it's simple.
Count the amount of coins that people wanted to buy in the range from $ 0.01 up to $ 17.51
The only way that the market price can go down to $ 0.01 is that all these buy orders had to be cleared.
In order to clear all these buy orders, a total of 51 million bitcoins had to be sold by someone.
This is what happened on Sunday.
Someone sold almost 51 million bitcoins at MtGox, causing the execution of all these buy orders, all the way down to $0.01

But today only 6,6 million bitcoins truly exist. Nobody has 51 million bitcoins, and nobody will ever have 51 million BTC as you all must know...


That explains the question:
Was it a real trade? Where the trades real? Answer: no

What was it then?
Answer: A software exploit. This could have happened on many different levels. It could've been a SQL Database attack, it could've been an exploit in the website code itself, etc....

Banks
This happens in real banks as well, when a programmer has made an error in the code of transactions. A programmer could've written a bug in the software the causes money to get credited from account A, but not debited on account B.
If such a bug occurs in banks, they will always perform a rollback. A rollback will undo all the incorrect transactions up untill before the bug.
If they wouldn't do that, then money is being created out of nothing, or money is being deleted into nothing. In such a case, a rollback is always necessary.

This is why MtGox needs to do a rollback. This is why MtGox's single correct answer on the situation is a rollback.


"I did a great deal at $0.015 !! It's my right to keep them !!"
For all those who think they have done awesome deals between $ 0.01 and $10.00 and are now being ripped off by MtGox because of the rollback. Sorry folks, but you bought something that didn't exist. Nobody was truly selling bitcoins at $ 0.01
So you didn't buy bitcoins at $ 0.01

MtGox doesn't rip you off.

I hope this post helps.

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June 21, 2011, 01:16:22 PM
 #2

So here is an explanation of:
1) What has happened on Sunday
2) Why a rollback is the only right call

I've decided to put this in a seperate topic so that this information can reach a slightly larger audience.

Here is what happened on Sunday 19th of June
All of the following buy orders got executed on Sunday 19th of June, causing the price to crash from $ 17.51 to 0.01 $ in a minute
http://pastebin.com/J0HXBjWu

Now, it's simple.
Count the amount of coins that people wanted to buy in the range from $ 0.01 up to $ 17.51
The only way that the market price can go down to $ 0.01 is that all these buy orders had to be cleared.
In order to clear all these buy orders, a total of 51 million bitcoins had to be sold by someone.
This is what happened on Sunday.
Someone sold almost 51 million bitcoins at MtGox, causing the execution of all these buy orders, all the way down to $0.01

But today only 6,6 million bitcoins truly exist. Nobody has 51 million bitcoins, and nobody will ever have 51 million BTC as you all must know...

That explains the question:
Was it a real trade? Where the trades real? Answer: no

What was it then?
Answer: A software exploit. This could have happened on many different levels. It could've been a SQL Database attack, it could've been an exploit in the website code itself, etc....

Banks
This happens in real banks as well, when a programmer has made an error in the code of transactions. A programmer could've written a bug in the software the causes money to get credited from account A, but not debited on account B.
If such a bug occurs in banks, they will always perform a rollback. A rollback will undo all the incorrect transactions up untill before the bug.
If they wouldn't do that, then money is being created out of nothing, or money is being deleted into nothing. In such a case, a rollback is always necessary.

This is why MtGox needs to do a rollback. This is why MtGox's single correct answer on the situation is a rollback.


"I did a great deal at $0.015 !! It's my right to keep them !!"
For all those who think they have done awesome deals between $ 0.01 and $10.00 and are now being ripped off by MtGox because of the rollback. Sorry folks, but you bought something that didn't exist. Nobody was truly selling bitcoins at $ 0.01
So you didn't buy bitcoins at $ 0.01
MtGox doesn't rip you off.

I hope this post helps.
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Pieter Wuille
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June 21, 2011, 01:17:10 PM
 #3

I'm not going to argue about what is the right thing to do, but If I add the numbers in that file I get 237457.099 (237k BTC).

aka sipa, core dev team

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DamienBlack
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June 21, 2011, 01:20:24 PM
 #4

Indeed, how the hell did you get 51,000,000? My calculations from earlier show about 400,000, and your own document doesn't support it. How did you get your numbers?

51 Million BTC of buy orders, at and average of $4 would mean that mt gox is holding 200 millions dollars. That is just crazy and can't be right.

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Klestin
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June 21, 2011, 01:20:47 PM
 #5

I got 211531.18.  Where does this 51 million number come from?
JonasKohlheim
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June 21, 2011, 01:24:32 PM
 #6

I've just done a re-check and I still get a total of 51 044 103 bitcoins when I do the calculation.
I'm not sure how you guys end up with these other numbers. What am I missing?

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DamienBlack
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June 21, 2011, 01:26:19 PM
 #7

Are you multiplying by the dollar price? There is no point to doing that if you are trying to count the bitcoins. AKA, add up the "amount" column, not the "total" column.

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Maxxx
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June 21, 2011, 01:28:01 PM
 #8

"I did a great deal at $0.015 !! It's my right to keep them !!"
For all those who think they have done awesome deals between $ 0.01 and $10.00 and are now being ripped off by MtGox because of the rollback. Sorry folks, but you bought something that didn't exist. Nobody was truly selling bitcoins at $ 0.01
So you didn't buy bitcoins at $ 0.01
MtGox doesn't rip you off.

I hope this post helps.

So you're going to "rollback" those who have already withdrawn to their personal wallet then? Wink

Time is money. This means that if you have spare time, you can use it to make money.

Modular, open, and stack-able miner case.
Klestin
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June 21, 2011, 01:29:01 PM
 #9

I've just done a re-check and I still get a total of 51 044 103 bitcoins when I do the calculation.
I'm not sure how you guys end up with these other numbers. What am I missing?
Good question.  I've tried a few things and can't come up with a way to calculate 51 million.  The actual calculation is simple - just sum the "Amount" column. 211531.18
JonasKohlheim
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June 21, 2011, 01:30:11 PM
 #10

I've just done a re-check and I still get a total of 51 044 103 bitcoins when I do the calculation.
I'm not sure how you guys end up with these other numbers. What am I missing?
Good question.  I've tried a few things and can't come up with a way to calculate 51 million.  The actual calculation is simple - just sum the "Amount" column. 211531.18

I'm doing the same. But it looks like excel is seeing the "." as ","
In this case, something like 21652.252  shows up as 21 million in here  Undecided i just noticed. Damn american formats and conversions   Roll Eyes

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DamienBlack
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June 21, 2011, 01:31:07 PM
 #11


So you're going to "rollback" those who have already withdrawn to their personal wallet then? Wink

Some people who withdrew to their wallets still have enough to cover their withdrawal in their account. For example, if I had 1000 bitcoins, made another 2000 bitcoins during the crash, then withdrew 500, after the rollback, I'll have 500 left. (The original 1000 - the 500 I've withdrawn).

Some peoples' accounts might be 'negative' because of withdrawals. Mt gox will have to cover these losses if the users don't return the funds. I'm sure it isn't that much.

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June 21, 2011, 01:37:27 PM
 #12


So you're going to "rollback" those who have already withdrawn to their personal wallet then? Wink

Some people who withdrew to their wallets still have enough to cover their withdrawal in their account. For example, if I had 1000 bitcoins, made another 2000 bitcoins during the crash, then withdrew 500, after the rollback, I'll have 500 left. (The original 1000 - the 500 I've withdrawn).

Some peoples' accounts might be 'negative' because of withdrawals. Mt gox will have to cover these losses if the users don't return the funds. I'm sure it isn't that much.

I'm sorry but this is a laughable solution in my opinion. Mt. Gox needs to cut their losses and compensate this alleged owner of the original alleged user account that was allegedly compromised.

If you expect people to take Mt. Gox seriously when their account balances go negative, then you're just as crazy. Mt. Gox does not control the exchange rate and they will no longer be a central exchange. They cannot dictate market value of the BTC any longer. What sort of accuracy can we expect from a rollback? I mean honestly.

Time is money. This means that if you have spare time, you can use it to make money.

Modular, open, and stack-able miner case.
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June 21, 2011, 01:41:45 PM
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So you're going to "rollback" those who have already withdrawn to their personal wallet then? Wink

Some people who withdrew to their wallets still have enough to cover their withdrawal in their account. For example, if I had 1000 bitcoins, made another 2000 bitcoins during the crash, then withdrew 500, after the rollback, I'll have 500 left. (The original 1000 - the 500 I've withdrawn).

Some peoples' accounts might be 'negative' because of withdrawals. Mt gox will have to cover these losses if the users don't return the funds. I'm sure it isn't that much.

I'm sorry but this is a laughable solution in my opinion. Mt. Gox needs to cut their losses and compensate this alleged owner of the original alleged user account that was allegedly compromised.

If you expect people to take Mt. Gox seriously when their account balances go negative, then you're just as crazy. Mt. Gox does not control the exchange rate and they will no longer be a central exchange. They cannot dictate market value of the BTC any longer.

If you withdraw more than you have, your balance goes negative. I doubt anyone with a negative balance will return it when they can just open a new account, but that is just how math works. I don't see what is laughable. If you had 1000, and withdrew 500, you have 500 left. This isn't a "solution" this is the way numbers work.

And how could they "cut their losses" by coming up with 400,000 bitcoins. I don't even think there are 400,000 available for purchase. The price would be more than they can afford. When you "cut your losses" you are supposed to lose less, not more.

Mt gox never "controlled the exchange rate", that is set by buyers and sellers. Do you understand how any of this works? Am I talking to a 13 year old?

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June 21, 2011, 01:44:30 PM
 #14


So you're going to "rollback" those who have already withdrawn to their personal wallet then? Wink

Some people who withdrew to their wallets still have enough to cover their withdrawal in their account. For example, if I had 1000 bitcoins, made another 2000 bitcoins during the crash, then withdrew 500, after the rollback, I'll have 500 left. (The original 1000 - the 500 I've withdrawn).

Some peoples' accounts might be 'negative' because of withdrawals. Mt gox will have to cover these losses if the users don't return the funds. I'm sure it isn't that much.

I'm sorry but this is a laughable solution in my opinion. Mt. Gox needs to cut their losses and compensate this alleged owner of the original alleged user account that was allegedly compromised.

If you expect people to take Mt. Gox seriously when their account balances go negative, then you're just as crazy. Mt. Gox does not control the exchange rate and they will no longer be a central exchange. They cannot dictate market value of the BTC any longer.

If you withdraw more than you have, your balance goes negative. I doubt anyone with a negative balance will return it when they can just open a new account, but that is just how math works. I don't see what is laughable. If you had 1000, and withdrew 500, you have 500 left. This isn't a "solution" this is the way numbers work.

And how could they "cut their losses" by coming up with 400,000 bitcoins. I don't even think there are 400,000 available for purchase. The price would be more than they can afford. When you "cut your losses" you are supposed to lose less, not more.

lol... nvm

Time is money. This means that if you have spare time, you can use it to make money.

Modular, open, and stack-able miner case.
nathanrees19
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June 21, 2011, 01:47:04 PM
 #15

That explains the question:
Was it a real trade? Where the trades real? Answer: no

What was it then?
Answer: A software exploit. This could have happened on many different levels. It could've been a SQL Database attack, it could've been an exploit in the website code itself, etc....

What information is this based on? The current "official" story is that read-only database access was obtained through a side channel.

No further information is needed to explain the observed sales. That is simply the effect of filling every single open buy order.
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June 21, 2011, 01:53:00 PM
 #16

That explains the question:
Was it a real trade? Where the trades real? Answer: no

What was it then?
Answer: A software exploit. This could have happened on many different levels. It could've been a SQL Database attack, it could've been an exploit in the website code itself, etc....

What information is this based on? The current "official" story is that read-only database access was obtained through a side channel.

No further information is needed to explain the observed sales. That is simply the effect of filling every single open buy order.

If this were true, as the OP is suggesting and claiming. Then performing the rollback would make the Mt. Gox balance sheet "solvent" but they would be insolvent.

OP, yes, this is all numbers like you say. Yet, if people do not come back to pay their "negative balance" then what you are suggesting would mean Mt. Gox is likely insolvent and cannot honor all withdrawals.

Edit:

Ah, looks like you want the topic closed. Makes sense.

Time is money. This means that if you have spare time, you can use it to make money.

Modular, open, and stack-able miner case.
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