zedicus
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CryptoTalk.Org - Get Paid for every Post!
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February 25, 2014, 02:51:36 PM |
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^^ well it said other virtual currency's not litecoin but thats what i translated it as!
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WompRat
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February 25, 2014, 02:55:40 PM |
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"The cold storage has been wiped out due to a leak in the hot wallet."
BULLSHIT ALERT
Yeah, Wow, Nothing related to the "hot wallet" could have caused a "cold storage" wallet to malfunction in any way shape or form He's running with the "cold storage" money We know that they are not a very professional operation. There are substantive claims that until recently they had very limited development and testing infrastructure and were making a number of patches directly to the production system. In this environment is it hard to believe that a staff member tasked with continually having to go and retrieve bitcoins from cold storage, instead transferred in large amounts in one go to save himself a few trips? I doubt it was Mark himself, but someone who was focused on a quick fix and not the cause. |
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mybitcoincharts
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February 25, 2014, 03:00:12 PM |
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"The cold storage has been wiped out due to a leak in the hot wallet."
BULLSHIT ALERT
Yeah, Wow, Nothing related to the "hot wallet" could have caused a "cold storage" wallet to malfunction in any way shape or form He's running with the "cold storage" money can some senior/ advanced member try to explain that? i do not get how the cold wallet can be affected? Thats easy: Suppose they have - automated withdrawals from cold wallet to hot wallet in case hot has less than X BTC
- automated deposits to cold wallet from hot wallet in case hot has more than X BTC
- due to the malleability problem hot wallet constantly shrinks
- they only check the BTC transactions in their database, and do not double check whether the real BTC holdings are equivalent
Done. With a system like this money from the cold wallet could automatically trickly down into the hot wallet, and nobody noticed anything until it was too late. |
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MrPiggles
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Decentralized Ascending Auctions on Blockchain
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February 25, 2014, 03:04:33 PM |
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This is what SilkRoad2 claimed isn't it?? |
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zby
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Merit: 1001
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February 25, 2014, 03:10:39 PM |
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"The cold storage has been wiped out due to a leak in the hot wallet."
BULLSHIT ALERT
Yeah, Wow, Nothing related to the "hot wallet" could have caused a "cold storage" wallet to malfunction in any way shape or form He's running with the "cold storage" money can some senior/ advanced member try to explain that? i do not get how the cold wallet can be affected? Thats easy: Suppose they have - automated withdrawals from cold wallet to hot wallet in case hot has less than X BTC
- automated deposits to cold wallet from hot wallet in case hot has more than X BTC
- due to the malleability problem hot wallet constantly shrinks
- they only check the BTC transactions in their database, and do not double check whether the real BTC holdings are equivalent
Done. With a system like this money from the cold wallet could automatically trickly down into the hot wallet, and nobody noticed anything until it was too late. That would not be a cold wallet - but with MtGox anything goes. |
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mp420
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February 25, 2014, 03:13:19 PM |
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That does not add up at all. Their trading fees from Apr 1 2013 to today were WAY more than $1.3 million. $13 million would be more believable.
Either these figures are fake or Gox has been scamming everyone and only 10% of trades have been real.
When you say $1.3m, do you mean the number in first row, first column? That was the year 2012. 2013-2014 is on the second column, totalling $10m. Oopsie. $10M could actually be believable. |
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st4nl3y
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February 25, 2014, 03:15:31 PM |
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Just viewed the source of mtgox again and I have just seen about 20 lines of code with the phrases "mark" ,"my account id: ,and my correct ip address showing in one of the lines, when i refreshed the page to make a screenshot it was gone and now back to this again:
<html>
<head>
<title>MtGox.com</title>
</head>
<body>
<!-- put announce for mtgox acq here -->
</body>
</html>
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Wilhelm
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February 25, 2014, 03:15:48 PM |
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"The cold storage has been wiped out due to a leak in the hot wallet."
BULLSHIT ALERT
Yeah, Wow, Nothing related to the "hot wallet" could have caused a "cold storage" wallet to malfunction in any way shape or form He's running with the "cold storage" money can some senior/ advanced member try to explain that? i do not get how the cold wallet can be affected? Thats easy: Suppose they have - automated withdrawals from cold wallet to hot wallet in case hot has less than X BTC
- automated deposits to cold wallet from hot wallet in case hot has more than X BTC
- due to the malleability problem hot wallet constantly shrinks
- they only check the BTC transactions in their database, and do not double check whether the real BTC holdings are equivalent
Done. With a system like this money from the cold wallet could automatically trickly down into the hot wallet, and nobody noticed anything until it was too late. If you can automate it, it is not cold since it is available. If it is available and automated you could in theory hack it. The only safe method for a cold wallet is an off-site safe where you go with an encrypted paper wallet. Preferably a bank or other secure location. The guy transporting doesn't have the password and the dude with the password doesn't have the offline wallet. Password gets saved somewhere else offsite. My 2 cents |
Bitcoin is like a box of chocolates. You never know what you're gonna get !!
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nmersulypnem
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February 25, 2014, 03:19:52 PM |
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I think the rampant obvious insider trading we've seen, along with the leaked documents, and a complete lack of communication point to one very obvious conclusion: Inside job. Either Mark himself, or someone on his senior staff was complicit with stealing the 700K coins, and covering it up for so long.
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WompRat
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February 25, 2014, 03:25:36 PM |
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I think the rampant obvious insider trading we've seen, along with the leaked documents, and a complete lack of communication point to one very obvious conclusion: Inside job. Either Mark himself, or someone on his senior staff was complicit with stealing the 700K coins, and covering it up for so long.
If you wanted to steal some bitcoins, getting a job at MtGox was definitely the way to go. |
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crazy_rabbit
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RUM AND CARROTS: A PIRATE LIFE FOR ME
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February 25, 2014, 04:17:37 PM |
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I don't think they lost 740,000BTC in the sense of "they had it" versus maybe they were selling Bitcoins they never really had in the first place. :-/
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more or less retired.
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Voodah
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February 25, 2014, 05:02:41 PM |
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I don't think they lost 740,000BTC in the sense of "they had it" versus maybe they were selling Bitcoins they never really had in the first place. :-/
Yes but still... how can you not notice that amount? If you've ever run any kind of website you know there's just no way... |
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coinage
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February 25, 2014, 10:14:54 PM
Last edit: February 25, 2014, 10:39:40 PM by coinage |
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I don't think they lost 740,000BTC in the sense of "they had it" versus maybe they were selling Bitcoins they never really had in the first place. :-/
Yes but still... how can you not notice that amount? If you've ever run any kind of website you know there's just no way... No, c_r is saying they might have intentionally sold fictitious coins to customers -- in other words, a fractional bitcoin depository. Many users (such as traders) left a lot of real coins on the exchange for long periods, so there was always a sizeable reserve gox could draw against to fill withdrawal requests. Gox could have injected their own trades into the order book (violating their written promise to never take either side of any trade). They would then pocket the real fiat that had been deposited, and update the "coin" buyers' accounts to show bitcoins which were not actually on deposit. An extensive review of the blockchain (with access to company records) could probably tell whether they actually received all coins that were "held" by accounts. A simple way would be to create regular trading accounts, held by them, that were credited at some point with fake bitcoin balances ... then using those accounts to trade fake coins for customers' fiat, perhaps via Tor or a VPN. With over a million customers in the database, this might be easy to hide even from any forthcoming auditors. Especially if the software & accounting was as disorganized as it seems. At least one employee/contractor would realize many "coins" in the system were never in the wallets. That person would have been motivated to hide the imbalance by adjusting the internal bookkeeping software. That takes one line of code (or a handful to obfuscate it well). People later taking over the company could find the discrepancy, though. So far we have no evidence this happened, and the claim instead is that many coins that were in wallets no longer are. It does seem an easy theft for any current exchange to do -- except the decentralized ones which are just getting started. Future exchanges can be designed (using multisignature transactions) to give customers full control over their coins and the ability to track them at all times. |
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coinage
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February 25, 2014, 10:49:24 PM |
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They would then pocket the real fiat that had been deposited, and update the "coin" buyers' accounts to show bitcoins which were not actually on deposit.
By the way, what do you think of the proposed Gox brand for a bitcoin wallet, Bitpocket? That name may be the single most ridiculous plan listed in the document being circulated. Perhaps it doesn't suggest pickpocket in Japanese. |
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eldentyrell
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felonious vagrancy, personified
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February 26, 2014, 04:26:27 AM |
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My interpretation is that due to the malleability leak, Gox have been topping up the hot wallet with funds from cold storage and then losing them too.
Until the cold wallet was nearly empty? And nobody noticed this? Remember, extracting coins from a cold wallet is, by definition, a manual operation that is not automated. A human being would have to have done this, repeatedly, and not noticed. Simply does not add up. Thats easy: Suppose they have - automated withdrawals from cold wallet to hot wallet in case hot has less than X BTC
That is, by definition, not a cold wallet. It's just another hot wallet. |
The printing press heralded the end of the Dark Ages and made the Enlightenment possible, but it took another three centuries before any country managed to put freedom of the press beyond the reach of legislators. So it may take a while before cryptocurrencies are free of the AML-NSA-KYC surveillance plague.
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eldentyrell
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felonious vagrancy, personified
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February 26, 2014, 04:31:33 AM |
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I don't think they lost 740,000BTC in the sense of "they had it" versus maybe they were selling Bitcoins they never really had in the first place. :-/
Very interesting. I think you've come up with just about the only way that 740,000BTC number could in any way be connected to reality. In other words, they've been fractional reserving and 740,000 is their reserve ratio times their actual on-chain loss. If they were levered 10:1 the numbers start to get believable. It would also provide a believable explanation for why they knowingly and intentionally drew down their cold wallet to a 0 balance (the bullion banks are doing the same thing right now). So it's more Madoff than Corzine. |
The printing press heralded the end of the Dark Ages and made the Enlightenment possible, but it took another three centuries before any country managed to put freedom of the press beyond the reach of legislators. So it may take a while before cryptocurrencies are free of the AML-NSA-KYC surveillance plague.
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hostmaster
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February 26, 2014, 04:35:47 AM |
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This document is simply a hoax
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padawan789
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February 26, 2014, 08:41:21 AM |
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hi guys
what s happened to the lawyer and the class suit action?
i ve sent a pm but never got replied
i have my family money invested in there and need to find a lawyer asap
let me know if someone has succeed in contacting and hiring a lwayer at tokyo
thanks
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gollum
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In Hashrate We Trust!
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February 27, 2014, 05:36:56 AM |
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lol  I think they sold bitcoins they did not have, so the problem is not in their wallets but in their accounting. Based on the numbers in the leaked document I think it is theoretically possible for a venture capital firm to buy MtGox for 560 MUSD and bail out all clients at 500 $/BTC My valuation of MtGox:Net income 14 million dollars PE-ratio 100 (fast growth) PE-Value = 14 x 100 M USD = 1400 MUSD 750 000 coins missing x $500/BTC = 375 M USD PR-damage: 60% of theoretical value = 1400 MUSD * 60% = 840 MUSD Acquisition price (to pay the owners of MtGox) = 1400 - 375 - 840 MUSD = 185 MUSD Acquisition value = acquisition price + missing coins = 185 + 375 = 560 MUSD |
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Zarathustra
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February 27, 2014, 06:52:36 AM |
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For me, the best explanation is this one: Summary
1. A substantial amount of the missing 740k bitcoins are still in addresses that MtGox believed they had control over
2. Transaction malleability thefts did take place, but not nearly 740k coins
3. MtGox believed they were solvent because their watch-wallet continued and continues to show expected cold storage balances
4. MtGox’s deepest coldest-cold storage reserves were never tested until the transaction malleability situation
5. MtGox can not recover the keys to the coldest-cold storage. (possibly a software problem.. custom deterministic wallet? or some other hardware/organization failure)
6. Mark has reason to think that the keys might be recoverable
7. The 2,000 odd coins mentioned in the crisis document represent whats left of the first stage cold wallet/hot wallet coinshttp://letstalkbitcoin.com/somethings-not-right-at-gox/ |
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