A consensus network, or how to stop a big lose (fork it!)

[Buffer Overflow]

My thesis is that Mt.Gox lose 850,000btc three weeks ago.

No. Gox lost those years ago. They've been in deficit since.

How do you know that? I based my thesis on what they said in their last press conference.

I don't know that, it's just my guess. Another thread around here was speculating the theory, sounded good to me.
I've been suspicious of Gox for a while, too many red flags, something didn't add up, hence my post last year:

I have my doubts if Gox will even exist a year from now.

I based my thesis on what they said in their last press conference.

I would take anything Karpels says with a large pinch of salt.


Anyway, it doesn't really matter what theory is correct. The end result will be the same.
Any coins left on Gox won't be returned to their owners. That you can be quite sure of.

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[BurtW]

I think we went almost a week between threads suggesting we fork the block chain for someone pet complaint or another.  A new record.

I agree with the above - every single one of the hundreds of threads suggesting a fork for one reason or another should be burried in the alt section of the forum.

No, I am not talking about modifying the protocol, nor maintaining a parallel blockchain. Please read my posts again.

You many not know it but you are talking about an alt coin by definition.  You could try to call it Bitcoin but that would be a lie.

[Zooey]

You do understand you will never convince miners to erase 3,000 blocks of the blockchain however if you did, then Bitcoin is done.  Remember over those 3,000 blocks, newly mined coins have been involved in transactions and this action would double spend all of those.  The coins originally minted would never exist and thus the coins spent wouldn't.  Merchants, other users, exchanges would all see the downstream transactions (which have 6 ro 3,000+ confirmations) suddenly go unconfirmed and invalid.

While this in theory could be done at any time it is generally accepted to be impossible.  I mean if miners by decree can double spend transaction not 1 or 2 confirmations into the blockchain but 3,000 then no receiver can EVER be sure that the transaction is irreversible.  There is a certain level of faith in all currencies that create the perception of value, and Bitcoin is no exception.  Among those faiths, Bitcoin users believe that while it is possible in theory to 51% the network and undo transactions thousands of blocks deep, that it would have such an economic cost that it infeasible.  All users accept this faith or they wouldn't be using bitcoin (or would require 10,000+ confirmations before concluding the transaction).  Your proposed action (although I think it has no chance) if successful would break that faith.  Without faith in the irreversibility of transactions, there is no value or utility to Bitcoin.  Bitcoin would be dead.  I am not talking the exchange rate goes down a bit and recovers, I mean completely abandoned as a worthless experiment and development moves on to future systems which don't have the vulnerability (likely some floating checkpoint system which acts as a check to the proof of work).

How do you use a currency that at any time could simply be "undone" and erased from your wallet by the actions of a third party?  Would you use that currency?  I know I wouldn't.

This.

[Buffer Overflow]

These blockchain 'rollback' threads keep popping up clearly illustrate the lack of understanding why bitcoin has any value in the first place.

[BurtW]

Anyway, it doesn't really matter what theory is correct. The end result will be the same.
Any coins left on Gox won't be returned to their owners. That you can be quite sure of.

I am not so sure.  If there is anything there then some of it may be returned to the verified account holders, but I would not hold my breath.

On April 15th of 2011 the poker site I was using, Full Tilt Poker, was taken over by the government.

Today I just got notice that the government will be returning the full value of my account.

It took a while for the case to grind through the justa-system but I am very happy with the outcome in the case!

So, you never know.

[pera]

You are all missing that we ALREADY had hard-forks, do you know that right?

And also if you think that a fork is an alt-coin you are ignorant: as I already said every day we have several small forks (ie orphan blocks).


I understand your fear DeathAndTaxes, but the reality is that Bitcoin is already fucked: it's not distributed anymore, it's just decentralized. We have big mining pools with huge percentage of hashing power, we have few exchanges saving hundred of thousands of bitcoins, we have web services with virtual wallets getting hacked every month...
But Bitcoin could still be used as a currency if we stop being so archaic. Sometimes you need to fork core devs + mining pools already did that.


I have a question for all you: would you use a pre-mined cryptocurrency? because right now we have practically the same shit.

[crocko]

No fork and no Bitcoin Code Authority please !

Bitcoin is Bitcoin not Gox-coin !

[DeathAndTaxes]

It isn't a "fear" (your proposal was DOA before you wrote it) but you are talking about wilfully double spending wealth (let me use simpler words STEALING) from existing users in order to "undo" a mistake which has nothing to do with Bitcoin itself and everything to do with the actions of a private party and the people who mistakenly trusted them.

That is your solution?  The solution is a thousand times worse than the problem and the problem has nothing to do with Bitcoin and everything to do with a private party that people voluntarily chose to use.

Saying the network has been forked before that is a strawman.  Orphans are short lived and are known in advance to miners as a cost of mining.   Patches to the network normally do not produce long running forks and have been used to CORRECT FLAWS IN THE NETWORK NOT COMPENSATE THE LOSS OF A NEGLIGENT OR CORRUPT PRIVATE PARTY (i.e. NOT A BAILOUT).   The one notable exception was the berkeley db bug which caused a long run split in the network.   Miners did decide to switch to the shorter fork however it is important to note that the abandoned fork was only 78 blocks long which means the coins were immature and couldn't be spent.  No user could have received coins from miners and then had those coins erased by the miners as a result.   Making the fork before block 100 was a big factor in the decision to move when quickly.  If the major fork had gone longer than 100 blocks it is very likely the other (older) fork would have been abandoned instead.

You are talking about STEALING FUNDS from innocent third parties by undoing 3000+ blocks of transaction data.  "Fixing" the losses from MtGox, by cluster fucking the entire network.  Merchants, users, and exchanges who did nothing wrong and had no connection to MtGox would suddenly see coins vanish and you think that will be ok?   You think that will make people trust Bitcoin?   You think that anyone would use a currency where a user can do everything right, wait 3,000 confirmations and still have wealth erased by a third party through no fault of their own?  Are you insane?  Would you use that system? Would anyone who is informed of the risks?

[Buffer Overflow]

Bitcoin. Bailout free since 2009.

[pera]

No fork and no Bitcoin Code Authority please !

Bitcoin is Bitcoin not Gox-coin !

Maybe you say that because you think that 850,000btc is not so relevant. What would you say if BitStamp, BTC-E, Coinbase, and Huobi get hacked or "gaged"?

Let's say that now 40% of all coins are owned by one single hacker, would you fork?

[Buffer Overflow]

Let's say that now 40% of all coins are owned by one single hacker, would you fork?

NO. Absolutely not.

What would happen if I legitimately bought £10,000 worth of coins 2500 blocks ago? According to you it would be okay for the transaction to be rolled back. Now I don't have my coins or the money!

[pera]

It isn't a "fear" (your proposal was DOA before you wrote it) but you are talking about wilfully double spending wealth (let me use simpler words STEALING) from existing users in order to "undo" a mistake which has nothing to do with Bitcoin itself and everything to do with the actions of a private party and the people who mistakenly trusted them.

That is your solution?  The solution is a thousand times worse than the problem and the problem has nothing to do with Bitcoin and everything to do with a private party that people voluntarily chose to use.

Saying the network has been forked before that is a strawman.  Orphans are short lived and are known in advance to miners as a cost of mining.   Patches to the network normally do not produce long running forks and have been used to CORRECT FLAWS IN THE NETWORK NOT COMPENSATE THE LOSS OF A NEGLIGENT OR CORRUPT PRIVATE PARTY (i.e. NOT A BAILOUT).   The one notable exception was the berkeley db bug which caused a long run split in the network.   Miners did decide to switch to the shorter fork however it is important to note that the abandoned fork was only 78 blocks long which means the coins were immature and couldn't be spent.  No user could have received coins from miners and then had those coins erased by the miners as a result.   Making the fork before block 100 was a big factor in the decision to move when quickly.  If the major fork had gone longer than 100 blocks it is very likely the other (older) fork would have been abandoned instead.

You are talking about STEALING FUNDS from innocent third parties by undoing 3000+ blocks of transaction data.  "Fixing" the losses from MtGox, by cluster fucking the entire network.  Merchants, users, and exchanges who did nothing wrong and had no connection to MtGox would suddenly see coins vanish and you think that will be ok?   You think that will make people trust Bitcoin?   You think that anyone would use a currency where a user can do everything right, wait 3,000 confirmations and still have wealth erased by a third party through no fault of their own?  Are you insane?  Would you use that system? Would anyone who is informed of the risks?

chill out dude, you looks mad.. I already said that I am not 100% serious with this thread because three weeks is too much.

But forget about "my fix", just tell me please why anyone would use a currency when the current price is totally controlled by a thief?

[pera]

Let's say that now 40% of all coins are owned by one single hacker, would you fork?

NO. Absolutely not.

What would happen if I legitimately bought £10,000 worth of coins 2500 blocks ago? According to you it would be okay for the transaction to be rolled back. Now I don't have my coins or the money!

I said that Mt.Gox should pay for that.

IIRC last year the Foundation rewarded those affected by the hard-fork.

[bumpk1nK]

But forget about "my fix", just tell me please why anyone would use a currency when the current price is totally controlled by a thief?

Do you seriously think MtGox has all user fiat ballances on bank account and just missing Bitcoins ? I doubt, and Im not sure who is bigger thief, if MtGox or the transaction maleability exploiter.

[Skinnkavaj]

You do understand you will never convince miners to erase 3,000 blocks of the blockchain however if you did, then Bitcoin is done.  Remember over those 3,000 blocks, newly mined coins have been involved in transactions and this action would double spend all of those.  The coins originally minted would never exist and thus the coins spent wouldn't.  Merchants, other users, exchanges would all see the downstream transactions (which have 6 ro 3,000+ confirmations) suddenly go unconfirmed and invalid.

While this in theory could be done at any time it is generally accepted to be impossible.  I mean if miners by decree can double spend transaction not 1 or 2 confirmations into the blockchain but 3,000 then no receiver can EVER be sure that the transaction is irreversible.  There is a certain level of faith in all currencies that create the perception of value, and Bitcoin is no exception.  Among those faiths, Bitcoin users believe that while it is possible in theory to 51% the network and undo transactions thousands of blocks deep, that it would have such an economic cost that it infeasible.  All users accept this faith or they wouldn't be using bitcoin (or would require 10,000+ confirmations before concluding the transaction).  Your proposed action (although I think it has no chance) if successful would break that faith.  Without faith in the irreversibility of transactions, there is no value or utility to Bitcoin.  Bitcoin would be dead.  I am not talking the exchange rate goes down a bit and recovers, I mean completely abandoned as a worthless experiment and development moves on to future systems which don't have the vulnerability (likely some floating checkpoint system which acts as a check to the proof of work).

How do you use a currency that at any time could simply be "undone" and erased from your wallet by the actions of a third party?  Would you use that currency?  I know I wouldn't.

Well put D&T

[DeathAndTaxes]

But forget about "my fix", just tell me please why anyone would use a currency when the current price is totally controlled by a thief?

Well that is an unproven assumption.  MtGox has provided no clarity.  We have no idea how many coins were stolen.  MtGox has never explicitly articulated how many coins were stolen, by how many people and over how long of a time period.

As for "controlling" the exchange rate.  So they dump it, ok now they don't have the coins anymore and the exchange rate will recover.   Bitcoin rewards the "smart" thing to do.  If an attacker had 800K BTC they could sell it off slowly and be rich for the rest of their lives, or they could dump it all, very likely never be able to cash it out due to AML/KYC type requirements, and cause a short term drop in the exchange rate.  Are you always afraid of every shadow?  There is no evidence that a single attacker has all the coins, and if they do there is no evidence they would be downright idoitic with them.  

I mean do you really believe that Bitcoin can be completely annihilated by a single entity acquiring 800,000 BTC and selling them?  If so why are you here?  If Bitcoin can be destroyed by one person selling too many of them too quickly then it was worthless from the first day.  Even if no thief current has that many, at current exchange rates buying a million coins wouldn't be beyond the abilities of a well funded malicious entity.  It would be a tiny fraction of the cost of a 51% attack and your claim is that short of a network killing fork there is nothing that can stop them from destroying Bitcoin by just clicking the sell button.

Some of us believe Bitcoin will do just fine, and the biggest risk is rushing to implementing some dubious "fixes" based on little more than "we have to do something".

[DeathAndTaxes]

I already said that I am not 100% serious with this thread because three weeks is too much.

Then why make the thread to begin with?  Don't bother I won't be able to see it.  Life it too short.

[pera]

But forget about "my fix", just tell me please why anyone would use a currency when the current price is totally controlled by a thief?

Well that is an unproven assumption.  MtGox has provided no clarity.  We have no idea how many coins were stolen.  MtGox has never explicitly articulated how many coins were stolen, by how many people and over how long of a time period.

As for "controlling" the exchange rate.  So they dump it, ok now they don't have the coins anymore and the exchange rate will recover.   Bitcoin rewards the "smart" thing to do.  If an attacker had 800K BTC they could sell it off slowly and be rich for the rest of their lives, or they could dump it all, very likely never be able to cash it out due to AML/KYC type requirements, and cause a short term drop in the exchange rate.  Are you always afraid of every shadow?  There is no evidence that a single attacker has all the coins, and if they do there is no evidence they would be downright idoitic with them.  

I mean do you really believe that Bitcoin can be completely annihilated by a single entity acquiring 800,000 BTC and selling them?  If so why are you here?  You do know that at current exchange rates buying that many coins would be trivial for a well financed bad actor.  It would be a tiny fraction of the cost of a 51% attack and your claim is that short of a network killing fork there is nothing that can stop them from destroying Bitcoin by just clicking the sell button.

Some of us believe Bitcoin will do just fine, and the biggest risk is implementing some dubious "fixes" based on little more than "we have to do something".

In my first post I gave the source in which I based my thesis (Mt.Gox lawyer explicitly said that someone stole 850k from them).
I thought this was not necessary but I just want to make it clear that I don't know if what Mt.Gox is saying is true, in fact Mt.Gox PR have a long history of bs so I don't trust them. I only created an hypothesis based on what they claim.

The problem is that 850k is more than the whole demand of bitcoins in all the exchanges combined. Actually I think it's almost three times the current demand. We don't know the intentions of this bad actor, the only thing we know (in our universe of discourse...) is the amount stolen. The bad actor could manipulate the market for years, for example one could mix those coins and sell otc just small fractions (best case scenario), or send everything to one single address, write some scary message (like "in one hour I will drop 100k in BitStamp") and sign it, get profit from shorts, or talk with some external entity who hates Bitcoin and make some real deals with them. If I were a big bad bank I would try to find the hacker right now, create an alt-coin, destroy bitcoin's economy with occasional drops, let people speculate about future drops.

I already said that I am not 100% serious with this thread because three weeks is too much.

Then why make the thread to begin with?  Don't bother I won't be able to see it.  Life it too short.

you should try to relax asap, otherwise your life is gonna be shorter....

[ninjarobot]

Bitcoin has value specifically because things like bailouts are not possible.

OTOH it is important that the majority of coins do not end up in the hands of a small group of malicious actors. For most people securing their Bitcoins is hard and opportunists/scammers/hackers have exploited this fact. The sooner we can make Bitcoin safe and secure for mainstream users the better.

[CompNsci]

if they lost their BTC 3 weeks ago they sold me BTC they didnt have 1.5 weeks ago

This may end up being the issue in bankruptcy court. These transactions after the point where they didn't have the coins they claimed they were selling may all be declared invalid, before any payouts are made.