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Question: Economically speaking, the current situation is:
just ok, bitcoin is strong - 42 (22.6%)
not good but everything will be fine - 104 (55.9%)
terrible, the end is near! - 40 (21.5%)
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Author Topic: A cracker owning 850,000btc. How bad is that?  (Read 6616 times)
pera
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February 28, 2014, 03:47:40 PM
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So MagicalTux and his lawyer confirmed that some cracker gained illegal access to their systems and stole 850k coins, don't ask me how that is possible...

Since many old bitcoins are most probably unspendable, what real percentage of bitcoin's market cap is now owned by a shady cracker? I would say something between 10% and 20%, which means that now one person with no moral values could destroy the economy at any moment.

I'm really worried. I saw a lot of bad things over the last 4 years but nothing like this.

Bitcoin as a technology is still amazing, but the economical impact of one bad guy owning a loooot of coins is pretty scary  Sad

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"In a nutshell, the network works like a distributed timestamp server, stamping the first transaction to spend a coin. It takes advantage of the nature of information being easy to spread but hard to stifle." -- Satoshi
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Rawted
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February 28, 2014, 03:55:31 PM
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It really all depends on when the coins were stolen. If it truly happened back in 2011, it may very well have been one person. If it happened with the recent tx malleability issue, it had to be a group effort.

The thing that worries me more is if the US government actually has those coins from Gox (If they seized the coins under the premises of money laundering/drug sales from darknet). Gox coins + darknet coins would equal the US government holding ~10% of all minted coins. This is devastating if true.

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February 28, 2014, 03:56:54 PM
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crackers and governments and shit having 850k coins

my reaction to these threads https://www.youtube.com/watch?v=HS7cMrIxghg
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February 28, 2014, 03:57:08 PM
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I'm going to ask. How?

There is no bubble.
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February 28, 2014, 04:00:25 PM
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If the coins were stolen a while ago like back in 2011 then I doubt its any bad for us now.

If all the coins went missing now and someone is still sitting on them then it could be the death blow to bitcoin.
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February 28, 2014, 04:13:42 PM
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How does a hacker seal coins in cold storage ... they don't. 
pera
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February 28, 2014, 04:14:11 PM
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I am assuming that those bitcoins were stolen from their "cold storage" a few weeks ago, iirc gmaxwell said that they automatically send coins from their "cold storage" to their hot wallets when their hot wallets were empty Embarrassed

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February 28, 2014, 04:15:34 PM
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I am assuming that those bitcoins were stolen from their "cold storage" a few weeks ago, iirc gmaxwell said that they automatically send coins from their "cold storage" to their hot wallets  Embarrassed
Then they need a refresher course on the meaning of cold storage. That is deplorable if true.

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February 28, 2014, 04:16:27 PM
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The thread title sounds a little racist  Undecided
pera
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February 28, 2014, 04:19:07 PM
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The thread title sounds a little racist  Undecided
Huh sorry I am not sure if you are trolling, why "racist"? (english is not my first language, obviously)

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February 28, 2014, 04:21:38 PM
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The thread title sounds a little racist  Undecided
Huh sorry I am not sure if you are trolling, why "racist"? (english is not my first language, obviously)

Sorry! More of a joke than a troll...

In 'murica, a cracker is a derogatory name for a white person. I thought you were referring to Mark Smiley)

Carry on!
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February 28, 2014, 04:22:24 PM
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The thread title sounds a little racist  Undecided
Huh sorry I am not sure if you are trolling, why "racist"? (english is not my first language, obviously)

Sorry! More of a joke than a troll...

In 'murica, a cracker is a derogatory name for a white person.

Carry on!
oh i see, no worries Smiley

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February 28, 2014, 04:23:01 PM
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The thread title sounds a little racist  Undecided
Huh sorry I am not sure if you are trolling, why "racist"? (english is not my first language, obviously)
He is referring to the term cracker. It's a slang for white people that dates back to the days of slavery. The white plantation owners would punish the black slaves with whips if they felt they did something wrong. They became known as whipcrackers, which over the years was shortened to cracker.

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February 28, 2014, 04:24:12 PM
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I am assuming that those bitcoins were stolen from their "cold storage" a few weeks ago, iirc gmaxwell said that they automatically send coins from their "cold storage" to their hot wallets when their hot wallets were empty Embarrassed

automatic and cold storage can't be used in the same sentence unless you have some sort of semi-aware robot involved.
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February 28, 2014, 04:25:52 PM
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I am assuming that those bitcoins were stolen from their "cold storage" a few weeks ago, iirc gmaxwell said that they automatically send coins from their "cold storage" to their hot wallets  Embarrassed
Then they need a refresher course on the meaning of cold storage. That is deplorable if true.

That really is mind-boggling...
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February 28, 2014, 04:37:42 PM
 #16

If the coins were scammed in 2011, then they probably have been already absorbed by the market.

If they were scammed in 2014, then a shitload of them is going to hit the remaining exchanges.
Assuming Bitstamp is now the leading exchange for good, and there are about 20k coins on the ask side,
if a significant number (let's say only 100k) of scammed (and tumbled) coins would show up there,
the price could enter a death spiral similar to the one seen on MtGox before shutting down.
Considering Bitstamp has added to their KYC questions this one: 'What is the origin of the deposited Bitcoins?',
they probably suspect some of the scammed MtGox coins were already sold there.

Sometimes, if it looks too bullish, it's actually bearish
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February 28, 2014, 04:43:21 PM
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I think people are skipping over the implications of this.

If one single persons owns 6% of the money supply and closer to 8-9% with the current number of btc in circulation it is a terrible thing.

Nobody seems to be addressing this point. Somebody tried to answer with "well Satoshi has that many coins". Well yeah but he didnt steal them did he.

I mean imagine if btc went to 10k the real world spending power of that criminal would be insane. Far more than any cartels or other gangs have so that should be deeply concerning.
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February 28, 2014, 04:54:00 PM
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Satoshi would never try to destroy Bitcoin, nor "criminals" from the onionland, but a cracker?...
The person who stole 850k don't give a shit about Bitcoin, this person don't have ideals, this person only cares about money.

back to the "cold storage" thing, I am not sure if this is real but:

Quote
gmaxwell: wumpus: yea, I understand they had timed automatic reissues... Sad this was also something I didn't know prior to monday before last and is one of the other reasons my "they couldn't have lost much!" position softened to "I have no freeking clue."
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gmaxwell: alpha125: from mtgox staff and magicaltux ... I had assumed previously that any reissues were manual via customer support but apparently it was just timed.
http://pastebin.com/DaSph9uT

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February 28, 2014, 05:02:57 PM
 #19

Hoverer, the cracker still suffer from the same market mechanisms as your standard whale. If he floods the market with 850 k he will in effect kill the golden goose, making all his coins worth zero. Unless he wants to destroy bitcoin what would be the point of that?
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February 28, 2014, 05:15:27 PM
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Hoverer, the cracker still suffer from the same market mechanisms as your standard whale. If he floods the market with 850 k he will in effect kill the golden goose, making all his coins worth zero. Unless he wants to destroy bitcoin what would be the point of that?

What is the liquidity of all the current markets?

That is how much his short term profits are... And that might be sufficient for one person to live nicely for a while...

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