So who is shorting the crap out of BTC right now with the hacks?

[fcmatt]

Pfft. Not me. I am buying as many as I can. This is bullish! To the moon!

[1715020922]

1715020922

[1715020922]

1715020922

[Electricbees]

I got the hell out...

For now. 

[mb300sd]

I shorted as insurance to cover my holdings

[fcmatt]

Nice. Already in the green.

The question I am now thinking about is how low will it go? I will easily wait for < 4USD per BTC.

[Electricbees]

Nice. Already in the green.

The question I am now thinking about is how low will it go? I will easily wait for < 4USD per BTC.

This, ideally, is what I want to see...

[fcmatt]

Nice. Already in the green.

The question I am now thinking about is how low will it go? I will easily wait for < 4USD per BTC.

Z kinda lost allot of bitcoins i bet he will buy now

You make a good point but would not a smart guy realize the price would go down a lot
and wait until then?

Also when you create a website like he did that caters to people who want leverage... and
you have a lot of newbs join who never used leverage before.. it must have been a huge
windfall as they lost 2-100 BTC in bunches just learning how to use the website/shorting/going
long/etc...

But this is just speculation. You made an excellent point.

[matthewh3]

well you have to gamble whit this unknows
1 the hacker is a idiot ? he hacked stuff so he is not retarded, he understand bitcoin, but he understand economics ?  the hacker sell all the btc
2 the hacker dont sell the btc now
3 how many ppl join the short bandwagon, how this will affect any drop in price
4 when Z will buy some btc
5 when other user will try to get cheap btc
 

I don't think the hacker(s) would sell right away as it'd be easier to catch them maybe?

[fcmatt]

well you have to gamble whit this unknows
1 the hacker is a idiot ? he hacked stuff so he is not retarded, he understand bitcoin, but he understand economics ?  the hacker sell all the btc
2 the hacker dont sell the btc now
3 how many ppl join the short bandwagon, how this will affect any drop in price
4 when Z will buy some btc
5 when other user will try to get cheap btc
 

I don't think the hacker(s) would sell right away as it'd be easier to catch them maybe?

Maybe. But if it was me i would have no problem mixing them up by sending them around and testing the waters by selling 500 here and 500 there over the next several days. Then really start unloading. Keep in mind all the other hacks no one was caught...

[stochastic]

I got the hell out...

For now. 

Except moving all my money to my bank account.  I didn't do anything.

[Technomage]

It was to be expected that speculators are going to short sell like hell after the hacking event and that is pretty much the only reason we had a price drop now. This is very understandable.

I'm here to remind the long term players what this recent event means.

First of all, once again no regular Bitcoin users lost anything. Thanks to Slush and Zhou they are the only ones who lost anything. This proves once again that there are legitimate and trustworthy people in the Bitcoin economy, not everyone is out there to scam people.

Second of all, this will lead to much more secure Bitcoinica and all other service providers in the Bitcoin economy will be worried about this particular type of attack which is something we haven't seen before. I hope everyone remembers what happened to Mt. Gox a while back and how it affected them - they have really boosted security ever since. Mt. Gox is the biggest exchange and by far the biggest target, and they've had no issues whatsoever after the infamous hack.

And finally, the third aspect of this is that attacks like these can be made near-impossible with multisignature support. Gavin wrote about this in his blog (http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html) and explained how it would work for the faucet. It's true that encryption alone would've helped in this particular attack, but multisig would make any attack very difficult to pull off. I feel that the pressure from this event could be enough to finally get multisig into Bitcoin.

That's it. My conclusion is that for the long term this event is actually positive for Bitcoin, not negative. That's why I will call any further drops an overcorrection. That means that there still could be a drop but we will bounce back once people chew on this thing a little more.

[muyuu]

We're going back to 4US$ it seems. Not a big deal IMO. In fact prices seem very stable considering that some of the biggest names in the Bitcoin community just got hacked (including Bitcoinica, Slush and Gavin).

[N12]

I'm here to remind the fellow bag holders what this recent event means.

First of all, once again tens of thousands of BTC were stolen. We don’t even know if the other 4 unknown linode customers had lots of funds stolen as well. This proves once again that no matter how hard you try, you will probably always get your Bitcoins stolen somehow.

Second of all, this particular kind of attack will probably not happen again to the same service providers. But I am sure there are enough possibilities left to satisfy us all. After all, this is the second time now Bitcoinica was hacked in perhaps two weeks of time. I hope everyone remembers what happened to Mt. Gox a while back and how it affected them - they have really boosted security ever since. Mt. Gox is the biggest exchange and by far the biggest target, and they've had no issues whatsoever after the infamous hack. Except for a bit of DDoS, and doing a planned outage on Europeans during a crash. And except for HFT bot loops which made trading impossible for hours.

And finally, the third aspect of this is that attacks like these can be made near-impossible with multisignature support. Gavin wrote about this in his blog (http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html) and explained how it would work for the faucet. It's true that encryption alone would've helped in this particular attack, but multisig would make any attack very difficult to pull off. I feel that the pressure from this event could be enough to finally get multisig into Bitcoin, which will come in a few months at the earliest, which is years in Bitcoin time.

That's it. My conclusion is that for the long term this event is actually negative for Bitcoin, not positive. That's why I will call any further drops an appropriate reaction. That means that there still could be a drop but we will bounce back once people chew on this thing a little more. Trust me, guys, everything will be fine. Don’t mind the >50k stolen BTC and the trust breach Bitcoin suffered once again.

Full disclosure: I am not short and do not use Bitcoinica at all anymore.

[proudhon]

I'm here to remind the fellow bag holders what this recent event means.

First of all, once again tens of thousands of BTC were stolen. We don’t even know if the other 4 unknown linode customers had lots of funds stolen as well. This proves once again that no matter how hard you try, you will probably always get your Bitcoins stolen somehow.

Second of all, this particular kind of attack will probably not happen again to the same service providers. But I am sure there are enough possibilities left to satisfy us all. After all, this is the second time now Bitcoinica was hacked in perhaps two weeks of time. I hope everyone remembers what happened to Mt. Gox a while back and how it affected them - they have really boosted security ever since. Mt. Gox is the biggest exchange and by far the biggest target, and they've had no issues whatsoever after the infamous hack. Except for a bit of DDoS, and doing a planned outage on Europeans during a crash. And except for HFT bot loops which made trading impossible for hours.

And finally, the third aspect of this is that attacks like these can be made near-impossible with multisignature support. Gavin wrote about this in his blog (http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html) and explained how it would work for the faucet. It's true that encryption alone would've helped in this particular attack, but multisig would make any attack very difficult to pull off. I feel that the pressure from this event could be enough to finally get multisig into Bitcoin, which will come in a few months at the earliest, which is years in Bitcoin time.

That's it. My conclusion is that for the long term this event is actually negative for Bitcoin, not positive. That's why I will call any further drops an appropriate reaction. That means that there still could be a drop but we will bounce back once people chew on this thing a little more. Trust me, guys, everything will be fine. Don’t mind the >50k stolen BTC and the trust breach Bitcoin suffered once again.

Full disclosure: I am not short and do not use Bitcoinica at all anymore.

I don't have a position on bitcoinica right now, but I am out of BTC on MtGox.

[Technomage]

In fact prices seem very stable considering that some of the biggest names in the Bitcoin community just got hacked (including Bitcoinica, Slush and Gavin).

This is true but I think it's because every sane person understands that this event truly is more positive to Bitcoin than negative. Selling only makes sense in the short term because a price drop was to be expected.

The one to blame for the hacks is Linode and people should start one hell of a shitstorm on them, not Bitcoin. Each and every server at Linode could have been compromised, there was access to everything. They attacked only servers running bitcoind, though. Regardless of that the issue is mainly with Linode, not Bitcoin.

Of course the security that Slush and Zhou had requires more effort, for example Tradehill was also hosted at Linode and they still have a lot of BTC. Tradehill lost none because they had more advanced security systems.

This event does nothing to undermine Bitcoin, it simply puts the security issue in the spotlight where it should be. Bitcoin can be used in a secure way but it requires significant effort. Multisig would make it easier to implement secure systems and this will probably help in pushing that feature through as well.

I won't even mind answering Blitzboom, if that is truly what he thinks I can only assume that not everybody is thinking logically.

[N12]

I won't even mind answering Blitzboom, if that is truly what he thinks I can only assume that not everybody are sane.

Then you have no clue about markets, no clue about economics, no clue about social dynamics and no clue about what currencies are built upon.

I’m serious.

[Technomage]

Then you have no clue about markets, no clue about economics, no clue about social dynamics and no clue about what currencies are built upon.

I’m serious.

I'm confident that I have more of a clue than you do. This event is negative in the short term, that much is obvious, but in the long term it will clearly help make Bitcoin more useful and more secure. If you disagree with this then offer logical counter-arguments, but wait, you never do.

[N12]

I'm confident that I have more of a clue than you do. This event is negative in the short term, that much is obvious, but in the long term it will clearly help make Bitcoin more useful and more secure. If you disagree with this then offer logical counter-arguments, but wait, you never do.

Did it ever occur to you that the long term consists of a bunch of short term timeframes?

Currencies are built on trust. Trust in the money supply, trust in the acceptance, trust in the institutions that handle it. Trust in its security (NOT technical security, but actual, practical one).

Bitcoin’s value is built on speculation and projection into the future. Speculation that it will get more popular, be more trusted, more useful.

We know there are 4 out of 8 people who lost ~50k BTC to a malicious attacker. We know that there is no way to prevent the coins from eventually diluting ours, one way or another. (Except the attacker is stupid to have MtGox intercept them directly, haha.)

We know that no matter what the HELL we do, someone’s coins always get stolen or scammed and dilute our honest coins. We cannot trust in most Bitcoin institutions.

I bet Bitcoin is the currency with the highest percentage of stolen money supply. How can an economy run like that? How can it be BETTER than a negative sum game for all honest participants?

[M4v3R]

Then you have no clue about markets, no clue about economics, no clue about social dynamics and no clue about what currencies are built upon.

I’m serious.

I'm confident that I have more of a clue than you do. This event is negative in the short term, that much is obvious, but in the long term it will clearly help make Bitcoin more useful and more secure. If you disagree with this then offer logical counter-arguments, but wait, you never do.

I'm short now, but that's because I think the whole situation is bearish short-term. Long-term I'm still bullish, for reasons you stated.

Did it ever occur to you that the long term consists of a bunch of short term timeframes?

Every operating system (Linux/Unix included) had many major, critical security flaws that cost many people a whole lot of money. Yet, people still use these operating systems, because eventually all major holes were fixed and now they are more secure than ever.

[proudhon]

I'm confident that I have more of a clue than you do. This event is negative in the short term, that much is obvious, but in the long term it will clearly help make Bitcoin more useful and more secure. If you disagree with this then offer logical counter-arguments, but wait, you never do.

Did it ever occur to you that the long term consists of a bunch of short term timeframes?

Currencies are built on trust. Trust in the money supply, trust in the acceptance, trust in the institutions that handle it. Trust in its security (NOT technical security, but actual, practical one).

Bitcoin’s value is built on speculation and projection into the future. Speculation that it will get more popular, be more trusted, more useful.

We know there are 4 out of 8 people who lost ~50k BTC to a malicious attacker. We know that there is no way to prevent the coins from eventually diluting ours, one way or another. (Except the attacker is stupid to have MtGox intercept them directly, haha.)

We know that no matter what the HELL we do, someone’s coins always get stolen or scammed and dilute our honest coins. We cannot trust in most Bitcoin institutions.

I bet Bitcoin is the currency with the highest percentage of stolen money supply. How can an economy run like that? How can it be BETTER than a negative sum game for all honest participants?

I honestly think this is going to devolve into another long, painful price decrease; and as said not too long ago I think continued distrust and more cost efficient mining will keep the price down.

[Technomage]

Did it ever occur to you that the long term consists of a bunch of short term timeframes?

Currencies are built on trust. Trust in the money supply, trust in the acceptance, trust in the institutions that handle it. Trust in its security (NOT technical security, but actual, practical one).

Bitcoin’s value is built on speculation and projection into the future. Speculation that it will get more popular, be more trusted, more useful.

We know there are 4 out of 8 people who lost ~50k BTC to a malicious attacker. We know that there is no way to prevent the coins from eventually diluting ours, one way or another. (Except the attacker is stupid to have MtGox intercept them directly, haha.)

We know that no matter what the HELL we do, someone’s coins always get stolen or scammed and dilute our honest coins. We cannot trust in most Bitcoin institutions.

I bet Bitcoin is the currency with the highest percentage of stolen money supply. How can an economy run like that? How can it be BETTER than a negative sum game for all honest participants?

This post is much better, thank you. I just can't think the way you do about this, no matter how hard I try. My own bitcoins are just as safe as they were before this event. My company which deals with bitcoins got a good wakeup call from this and will make sure that it doesn't matter if our hosting provider is totally compromised, we won't lose any coins regardless.

On top of that I see Bitcoin protocol security, service security and user security all improving thanks to this. This might be negative in the short term, even mid term but I see this as really important for Bitcoin long term. This would have happened one way or another eventually anyway, now it's over with and we can continue to work on better security.

I don't buy your claim that Bitcoin has the highest percentage of stolen money supply, that is preposterous. I think that a very high percentage of our dollars/euros have been part of a theft or a scam at some point. With bitcoins it's very likely that the amount of scams and theft will always be much lower than with regular money, simply because bitcoins are not something meant to be trusted to a 3rd party. Everything done in a pure Bitcoin economy requires people to be VERY suspicious about everything, leading to much less stupid usage compared to the regular economy.

It's a sad reality that people are so susceptible to scams and such, Bitcoin is there to teach people. This is one one of those roadblocks on that very long road that teaches people how to take care of their own money. I honestly can't see how this changes much of anything, Bitcoin is different than regular money, it's hard, it's cold. It's currency of the free market. As soon as people REALLY start realizing this first hand, the sooner it will become more usable.