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Bitcoin Price Crashes

samzenpus posted more than 3 years ago | from the black-bit-sunday dept.

Bitcoin 642

Beardydog writes "Bitcoin trading site MtGox.com has suspended operations for the rest of the day after illicit access to at least one account resulted in a steep drop in the price of Bitcoins on the site. Commenters to the support page for the event are reporting that a list of usernames and associated email addresses and password hashes have been posted online. MtGox are currently planning to roll back all of the day's trading, email notices to all affected users, and require replacement passwords for affected accounts."

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Bitcoin to revolutionise economy (5, Funny)

David Gerard (12369) | more than 3 years ago | (#36493684)

Bitcoin [newstechnica.com] is a decentralised computer currency designed by self-righteous Ayn Rand-reading nerds who despise looters and parasites like, er, you. It is used to purchase Internet services, illegal drugs and pictures of naked women holding video cards.

Bitcoin works by an emergent synergy of cryptography, peer-to-peer, anonymity, anarchism, libertarianism, wasting stupendous quantities of electricity, the marketing department at NVidia, the enduring exchange value of tulip bulbs and doing all of this instead of Folding@Home.

Bitcoin successfully harnesses a hitherto-unexploited Internet resource: the vast reserves of unexamined privilege amongst computer programmers. Coins are "mined" by stealing them from people who are able to comprehend this level of computer science but still keep their Bitcoin wallet in plain text on a Windows machine.

The Bitcoin system is robustly designed to continue past the collapse of the US dollar and the world economy, as the Internet, fast computers and reliable electricity are all expected to be readily available when barbarian hordes are wandering the burnt-out post-apocalyptic remnants of civilisation.

It is completely incorrect to describe Bitcoin as a "pyramid scheme." Technically, it's a "pump-and-dump."

Many common products are still inexplicably not purchasable with Bitcoins. "It's as if they don't understand the revolutionary wonder of Bitcoin," says Debian developer Hiram Nerdboy, 17. "I can't get chicks with Bitcoins either. Even with my slickest Pick-Up Artist techniques! It's as if my knowledge of economics and game theory didn't apply to real life. But that's impossible, of course. They're probably just theists. Hold on, I just gotta post to Slashdot about this."

Bitcoin was invented by Internet libertarians, in the spirit of freely-chosen individual interpersonal interactions that will bring about the utter collapse of the oppressive taint of the dead hand of government, in order to make money at your expense.

Re:Bitcoin to revolutionise economy (0)

Oligonicella (659917) | more than 3 years ago | (#36493716)

Friggin' brilliant.

Re:Bitcoin to revolutionise economy (-1)

Anonymous Coward | more than 3 years ago | (#36493718)

Someone's tinfoil hat is slipping... better pin that thing on tighter.

Re:Bitcoin to revolutionise economy (3, Insightful)

cowboy76Spain (815442) | more than 3 years ago | (#36493726)

The Bitcoin system is robustly designed to continue past the collapse of the US dollar and the world economy, as the Internet, fast computers and reliable electricity are all expected to be readily available when barbarian hordes are wandering the burnt-out post-apocalyptic remnants of civilisation.

I think that you have missed the Fallout series of historic documentals.

Re:Bitcoin to revolutionise economy (5, Funny)

Fnord666 (889225) | more than 3 years ago | (#36493980)

Documental: (n) - A form of elemental that has all of the necessary paperwork.

Re:Bitcoin to revolutionise economy (1)

Threni (635302) | more than 3 years ago | (#36493736)

I prefer gold, that's much safer. I mean, Euros...uh dollars....pounds sterling? Carrots?

Re:Bitcoin to revolutionise economy (1)

Beardydog (716221) | more than 3 years ago | (#36494044)

Don't you mean waffles?

Re:Bitcoin to revolutionise economy (5, Funny)

Binestar (28861) | more than 3 years ago | (#36494064)

Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor.

Re:Bitcoin to revolutionise economy (2)

Golddess (1361003) | more than 3 years ago | (#36494156)

Ammunition. ;)

Re:Bitcoin to revolutionise economy (3, Insightful)

Anonymous Coward | more than 3 years ago | (#36493778)

I absolutely agree. These worthless, abstract encrypted computer bits are WORTHLESS.

Anybody who knows anything understands that REAL value is in small, green pieces of paper with pictures of dead people on them.

Re:Bitcoin to revolutionise economy (0)

Anonymous Coward | more than 3 years ago | (#36493842)

At least you can burn paper, or eat it for a few calories...

Re:Bitcoin to revolutionise economy (4, Insightful)

David Gerard (12369) | more than 3 years ago | (#36493852)

The pieces of paper are backed by a country of 300 million people who will do work in exchange for them.

(One good thing about Bitcoin threads on Slashdot: plenty of opportunity to beat Econ 101 into the heads of libertoonians who think they've got the perfect zinger for every situation.)

Re:Bitcoin to revolutionise economy (5, Insightful)

Colin Smith (2679) | more than 3 years ago | (#36493958)

The pieces of paper are backed by a country of 300 million people who will do work in exchange for them.

You realise that most dollars are not paper? They make up only about 6% of money. The rest is debt based.

There is only about ~900 billion paper and coin dollars.
There is about ~14 trillion dollars worth of credit supplied by banks.
There is about ~55 trillion dollars in total debt, again, supplied by banks.

What backs the dollar is the faith that the 14 trillion dollars will some day pay the 55 trillion dollars off.

Re:Bitcoin to revolutionise economy (1)

gilbert644 (1515625) | more than 3 years ago | (#36494066)

Money used to pay for debt isn't destroyed in the process.

Re:Bitcoin to revolutionise economy (1)

Colin Smith (2679) | more than 3 years ago | (#36494194)

Money used to pay for debt isn't destroyed in the process.

Really?

Show me.

Now I absolutely would take your point as it applies to the ~5% physical cash, because it's physical and a credit entry is created when it is deposited in the bank meaning that credit entry is destroyed when the debt is paid... But the 95% of money which is made up of credit itself is purely a book keeping entry not physical cash and that absolutely does vanish when debts are paid.

Where did you think all the crashes and busts came from?
 

Re:Bitcoin to revolutionise economy (0)

Anonymous Coward | more than 3 years ago | (#36494072)

The real question is, why does money creation have to be tied to debt? In fact Lincoln proved it didn't have to be by printing some $400 million greenbacks to raise money without increasing taxes or borrowing it from banks at high interest rates.

What backs the dollar is faith that the US produces things others want. Innovation, knowledge, increased standard of living. Debt is a huge distraction, a scam by bankers who want you to think they have an exclusive, divine right to create money and attach debt to it (and charge interest on the debt!), because otherwise how would they get attention?

Re:Bitcoin to revolutionise economy (1)

artor3 (1344997) | more than 3 years ago | (#36494076)

Why on earth does it matter if most dollars aren't physical objects? And since when is the dollars based on the faith that existing assets will eventually pay off the debt? First of all, it's not as though no new wealth is being created. Secondly, why does the debt ever need to be paid off? Just because you belly-feel that debt is bad?

Re:Bitcoin to revolutionise economy (1)

turing_m (1030530) | more than 3 years ago | (#36494148)

What backs the dollar is the faith that the 14 trillion dollars will some day pay the 55 trillion dollars off.

Actually, what backs the dollar in the US is that the only legal tender for payment of taxes is USD, and if you don't pay your taxes you eventually wind up in jail.

Re:Bitcoin to revolutionise economy (5, Insightful)

canajin56 (660655) | more than 3 years ago | (#36494164)

OK, lets say there is only a single gold coin in town. That's the only currency in existence. OK so far? So, I have that one coin, and I pay somebody that coin for a new window. The glassier takes that coin, and he goes to the pub and he buys a beer for that one coin. Now the bar pays the bartender with that one coin. Now he takes that coin and he buys a sandwich with that coin. Oops, so far our town as a GDP of 4 coins, but there's only one in existence. DO YOU UNDERSTAND YET THAT AN ECONOMY IS NOT A ZERO SUM GAME? I know, you should use the broken window fallacy next! Point out that if you hadn't broken my window in that above example that the GDP of my fictional town would have been 0 instead of 4! ;)

Re:Bitcoin to revolutionise economy (0)

Anonymous Coward | more than 3 years ago | (#36493964)

Even in the midst of this "crisis", those pieces of paper are worth less than BTC. Quite a bit less.

BTC might only be backed up by crypto, but it's better than U.S. Federal Reserve Notes, which are backed up by the threat of being beaten and raped in prison.

Re:Bitcoin to revolutionise economy (2)

themusicgod1 (241799) | more than 3 years ago | (#36494062)

The thing about the world is that most people on it aren't americans. Right now they have to use the USD because it's the de facto standard -- but if something could replace it in a way that kept everyone honest(see, for example, bitcoin) -- there would be some incentives to switch to it to larger and larger degrees.

Bitcoin isn't perfect -- hell, it's probably going to fail. But something like it could very well be 'the thing' that the 6 billion other people would be willing to work for. It's mostly a social and technical problem at this point.

Re:Bitcoin to revolutionise economy (0)

Anonymous Coward | more than 3 years ago | (#36494086)

Idiotic randian economic ideas have nothing to do with libertarianism, please stop insulting us.

Re:Bitcoin to revolutionise economy (-1)

Anonymous Coward | more than 3 years ago | (#36494026)

You morons try to use that fallacy ever damn time, it's getting tiring.

Re:Bitcoin to revolutionise economy (1)

betterunixthanunix (980855) | more than 3 years ago | (#36494068)

Real currencies can be used to pay taxes and legally settle debts.

Re:Bitcoin to revolutionise economy (-1)

Anonymous Coward | more than 3 years ago | (#36494106)

"Real currencies can be used to pay taxes and legally settle debts."
Yes, Federal Reserve notes aren't backed by gold, or any other commodity. They are backed by the threat of VIOLENCE, which is why they are so valuable.

Re:Bitcoin to revolutionise economy (-1)

Anonymous Coward | more than 3 years ago | (#36493802)

Please post this in every BitCoin thread from now until Slashdot stops advertising for this scam/waste of time.

Re:Bitcoin to revolutionise economy (0)

Anonymous Coward | more than 3 years ago | (#36493904)

UTTER NONSENSE!!!!

It's the AMD marketing department, Nvidia's no good for mining.

Enough already (4, Insightful)

Anonymous Coward | more than 3 years ago | (#36493698)

Enough with this Bitcoin spam already.
Bitcoin is stupid, unneccessary and irrelevant, we don't care for your fucking scam.

Re:Enough already (0, Flamebait)

Anonymous Coward | more than 3 years ago | (#36493714)

No, YOU don't care, others do.

Re:Enough already (1, Insightful)

Anonymous Coward | more than 3 years ago | (#36493890)

No they don't.

Re:Enough already (5, Insightful)

hipp5 (1635263) | more than 3 years ago | (#36493748)

Enough with this Bitcoin spam already. Bitcoin is stupid, unneccessary and irrelevant, we don't care for your fucking scam.

To be fair, it's nice to hear news that predictions about bitcoins being crappy are indeed true. This story is somewhat of an anti-spam.

Bitcoins status : told (0)

Anonymous Coward | more than 3 years ago | (#36493708)

Steve Jobs has condemned bit coins to live with flash and hypercard on the island of banished toys, meanwhile electric companies and GPU manufacturers are laughing all the way to bank with your REAL coins.

captcha : payment.

Re:Bitcoins status : told (-1)

Anonymous Coward | more than 3 years ago | (#36493756)

Note to moron AC, not everything Steve Jobs proclaims becomes law.

Is it even possible to roll back a bitcoin trade? (1)

ThreeGigs (239452) | more than 3 years ago | (#36493710)

I thought each trade was part of the bitcoin history, so how can you possibly "roll back" trades? I could see sending bitcoin back to where it came from, but both parties would have to agree to everything.

Re:Is it even possible to roll back a bitcoin trad (5, Informative)

Shadyman (939863) | more than 3 years ago | (#36493738)

These are trades are done on a firm's website, with US$ and BTC balances stored on it. It's totally out of the hands of the bitcoin system except for deposits to (and withdrawls from) accounts on the site.

Re:Is it even possible to roll back a bitcoin trad (3, Informative)

superwiz (655733) | more than 3 years ago | (#36493764)

The only thing I can think of is that they are rolling back transactions which haven't settled yet (settlement=delivery). Because once they bitcoins held in a MtGox account have been transferred out to your bitcoin wallet, they can't get it back. But while they are still held in MtGox account, the actual owner of the coins is MtGox (much like your brokerage is the actual owner of your monkey while you have money deposited with the brokerage).

Re:Is it even possible to roll back a bitcoin trad (1)

fotoguzzi (230256) | more than 3 years ago | (#36494000)

...much like your brokerage is the actual owner of your monkey while you have money deposited with the brokerage).

Bananas not included.

Re:Is it even possible to roll back a bitcoin trad (0)

Anonymous Coward | more than 3 years ago | (#36494006)

of course with the rise of over-the-counter monkey futures trading, you rarely own the monkey at all, instead purchasing a covering position in monkeys at settlement.

Re:Is it even possible to roll back a bitcoin trad (1)

superwiz (655733) | more than 3 years ago | (#36494032)

Futures and other derivatives will not be traded until reliable bitcoin-denominated fixed income instruments emerge. Until then, any exchange would be (albeit tacitly) assuming a role of a FI issuer.

Re:Is it even possible to roll back a bitcoin trad (4, Funny)

phoenixwade (997892) | more than 3 years ago | (#36494028)

they can have my monkey - he was throwing shit everywhere.

Re:Is it even possible to roll back a bitcoin trad (2)

mudshark (19714) | more than 3 years ago | (#36494166)

We asked the monkey for his response to events of the day. "Shocked!" he said.

Re:Is it even possible to roll back a bitcoin trad (0)

Anonymous Coward | more than 3 years ago | (#36493768)

MtGox acts an an escrow service. You send dollars/bitcoins to MtGox, which credits your account, allowing you to make trades on the site. These trades only happen in the MtGox database, so it's possible to roll them back to an earlier state. MtGox only allows withdraws of $1000, whether in dollars or bitcoins at the latest market price.

Re:Is it even possible to roll back a bitcoin trad (1)

somersault (912633) | more than 3 years ago | (#36493800)

I was wondering that myself, but I think it must justnbe MtGox transactions rather than all BitCoin transactions.

I was a bit worried there. I got the email about Mt Gox being compromised, and soon afterwards my Gmail account stopped working. I'm guessing maybe Google just reset the passwords of everyone who got the Mt Gox email.. because my password isn't the same between the sites.. and Google asked me to change my password when I logged in via a browser.

Re:Is it even possible to roll back a bitcoin trad (0)

Anonymous Coward | more than 3 years ago | (#36494184)

This happened at a bucket shop. http://en.wikipedia.org/wiki/Bucket_shop_(stock_market)

CSRFs in Lead Bitcoin Dev's Escrow service (1)

mithrandir14 (91726) | more than 3 years ago | (#36493724)

Not a good day for bitcoin.

http://forum.bitcoin.org/index.php?topic=19667.0

f-d thread still awaiting moderation approval.

Re:CSRFs in Lead Bitcoin Dev's Escrow service (1)

Stellian (673475) | more than 3 years ago | (#36493986)

Here's the leaked account list: http://bit.ly/kE3Q4D [bit.ly]

The passwords before ID 3000 that were not changed are plain md5 hashes. Almost all are easily cracked. Example:
id: 642
name: shlax
hash: de434a6e3a01de06657454e07349535c
password: pretorian

The ones starting with $ are MD5 crypt passwords. The 1000 MD5 iterations add about 10 bits of apparent entropy, and the salts prevent parallelisation.

Virtual Currency at its greatest (1)

Rivalz (1431453) | more than 3 years ago | (#36493728)

I think that maybe its time to hit the drawing board again.
Great idea but I think they need like 1 time key generators or some other level of security layered on transactions.

buh? (1)

superwiz (655733) | more than 3 years ago | (#36493742)

How can they enforce a roll back? Once the bitcoin is transferred out to another bitcoin account, there is no charge back or getting that monkey back. One would assume that any compromised account would have its bitcoins immediately transferred out, right?

Re:buh? (0)

Anonymous Coward | more than 3 years ago | (#36493798)

escrow

Re:buh? (2)

petteyg359 (1847514) | more than 3 years ago | (#36493810)

Presumably because the attackers were selling coins from other people's accounts, not buying them. The exchange site can contact their $$$ bank to cancel cash payments, and refund incoming bitcoins transactions from hacked accounts.

Re:buh? (1)

Marton (24416) | more than 3 years ago | (#36493816)

RTFA?

What they're saying is that somebody amassed a lot of coins on a single account but wasn't able to transfer them out. Just $1000 worth. The coins are there, and the transactions can be rolled back. Mostly.

I hope that is the case - if they can't fix this then it's a huge blow to a very interesting experiment.

Re:buh? (0)

pthisis (27352) | more than 3 years ago | (#36493952)

Rolling the transactions back is a huger blow to that interesting experiment, and basically undermines the attempt to get bitcoins accepted as a form of currency.

This is the largest market for bitcoin trades, but huge numbers of bitcoins aren't in this market--presumably, some people were using bitcoins to buy things in the real world or trading them on other markets during this time period. By rolling things back, you indicate that there actually is no market-determined value to bitcoins.

In fact, rolling this back is a great way to ensure that thieves can make off with a lot of money (a lot more than the $1000 limit on what you can pull out of the exchange), through arbitrage or worse. For instance, devalue the bitcoins in the exchange (which seems dumb since you hold tons of them), then offline sell a bunch of stuff to people at the devalued rate. Then when the market unwinds, all of a sudden the bitcoins you have are worth the original value, and you've made potentially much more than a thousand bucks.

Imagine this happening with the US dollar, or with stocks that can be traded on secondary markets. It's economic idiocy.

The right thing to do is suspend trading until you know that the security problem is fixed and then eat the pain of what's happened.

Re:buh? (3, Informative)

Stellian (673475) | more than 3 years ago | (#36494078)

Rolling the transactions back is a huger blow to that interesting experiment, and basically undermines the attempt to get bitcoins accepted as a form of currency.

Trades on the exchange do not impact the Bitcoin blockchain (transaction history) directly, in the exact same way as money is not directly transferred to/from your bank when you trade. Any market event is buffered into the virtual accounts that traders hold with Mt.gox, while the actual bitcoins are in Mt.gox's wallet and the actual dollars are in Mt.gox's bank account. You need to specifically request a transfer to get either money or bitcoins out of the system.
So the event is in no way relevant for Bitcoin. It's just a bad case of unsanitized inputs.

Re:buh? (0)

Anonymous Coward | more than 3 years ago | (#36493824)

To do what with?

There's FAR more money in the system to sell/hit the mtGox $1K/day send limit over time. Why would someone in possession of a compromised account go out of their way to devalue the things they stole?

This just screams to me of a deliberate attack on BTC. No one in their right mind would ever do this with stocks, could you imagine someone taking hold of a high value trading account and dumping the entire portfolio onto the market at 1/100'th to 1/1000'th of the current value, for any other reason?

Re:buh? (1)

superwiz (655733) | more than 3 years ago | (#36493870)

Well, since bitcoins get anonymity after they are transferred, they could simply transfer it out to an outside wallet or multiple wallets (smurfing) and then further transfer it out to another bc holding account. I have to admit quite a bit of ignorance on the whole MtGox workings. So far I am only mildly curious about BC. Not quite enough to commit any resources to it, but enough to start reading about it.

Growing pangs (2, Interesting)

traindirector (1001483) | more than 3 years ago | (#36493782)

I've been watching the Bitcoin system/experiment since the beginning of last autumn, and I can't help but feel it's receiving too much attention and increasing in value too quickly for its own good.

I really like the idea of the system and I want to see this system or one like it succeed, but with the extremely quick rise in value since last year and all the attention it's been getting, coupled with the games those with lots of bitcoins could play with the market and the somewhat unknown nature of who controls these fortunes (now in both bitcoin and USD), I felt a devastating crash is unavoidable at $.70 US / bitcoin, much less $17 / bitcoin.

At this sort of insane value, the system is an extremely interesting experiment, but I think it's a huge roadblock for serious adoption.

Re:Growing pangs (0)

betterunixthanunix (980855) | more than 3 years ago | (#36493922)

it's receiving too much attention and increasing in value too quickly for its own good.

Anyone with an iota of common sense could see that.

I really like the idea of the system and I want to see this system or one like it succeed

What we need is a digital cash system that is run by banks -- yes, I know, we all like to hate on banks, but the truth is that banking is an important part of the economy and the majority of digital cash protocols call for a bank to issue the digital currency.

Re:Growing pangs (3, Insightful)

traindirector (1001483) | more than 3 years ago | (#36494154)

Anyone with an iota of common sense could see that.

I wasn't trying to extol myself as a genius--I was making an observation for those who haven't had much of a look at the history of the market.

What we need is a digital cash system that is run by banks -- yes, I know, we all like to hate on banks, but the truth is that banking is an important part of the economy and the majority of digital cash protocols call for a bank to issue the digital currency.

I think bank-issued digital currency would be worse than government-issued currency, because the government has at least some semblance of advancing the good of its people, whereas a single bank issuing a currency could do whatever it pleases to the market, having only profit motive.

A system like bitcoin where a very large number of users of the currency all have a stake it in with no single user selling all their bitcoins would cause more than a .1% fluctuation in value would be a system that would be very good at holding value for its users (assuming there are no design exploits and no organization with enough computing power to start playing games with the block chain).

The problem with the current bitcoin system is that I imagine there are hundreds of people who could crash the value of the currency because it's likely too concentrated with a few individuals and the market is not deep enough for them to sell their stakes to those who are willing to invest in it more. At the value of $17 US / bitcoin, there are $112,141,350 US in the bitcoin market. There are probably dozens of bitcoin "millionaires" (in USD) who would end up with probably only somewhere in the thousands of dollars if they sold, with the result being putting the bitcoin value back at something like $.10 - $.20 / bitcoin. The system is extremely intriguing, but the current ownership distribution and market seems like a disaster, either waiting to happen or already starting.

Maybe if the system were started again, with the current level of interest, the results would be different. I'd get involved in that. The market with the current ownership distribution? No way.

Re:Growing pangs (0)

Anonymous Coward | more than 3 years ago | (#36494186)

The main problem /.ers have with banks being in control is that they are currently underregulated - they're powerful enough that they can control the government, rather than vice versa. So we need to fix democracy before fixing the digital cash system.

Re:Growing pangs (1)

Americium (1343605) | more than 3 years ago | (#36494190)

For all intensive purposes the dollar is already a digital currency. There always needs to be some way for non digital transactions (cash), but the majority of all transactions are digital. With the dollar, there is nothing backing it, and since the supply grows exponentially, along with goods and services, prices stay flat.

Bitcoin is designed to grow at a less than linear rate with a maximum number of bitcoins ever created. Using this as currency would never work as the deflation rate would continue to grow. Gold's supply grows exponentially, yet with modern technology, there is still deflation measured in gold.

It was doomed to fail from the get to, basically it's at worthless as paper dollars, yet the supply is inelastic, which would only be good if it has exponential growth.

One more ponzi scheme down. (0, Flamebait)

tomhudson (43916) | more than 3 years ago | (#36493790)

Bitcoin was worse than most fiat currencies, since it wasn't even backed by anything physical - not even a piece of paper.

It also was a poor "store" of value, since transfers between users required extra energy input to extend the hash values - the typical bitcoin cost more to get to its current "value state" than the value it (theoretically) represented. It's probably the least "green" "currency" on the planet.

The bitcoin "fans" out there - this is only the beginning. You ignored all the warnings, now BITE ME!

Re:One more ponzi scheme down. (1)

Anonymous Coward | more than 3 years ago | (#36493820)

The US dollar isn't backed by anything physical.

Re:One more ponzi scheme down. (0)

Anonymous Coward | more than 3 years ago | (#36494094)

It's back by the guarantee that the government will ALWAYS accept it which is in turn backed by it's guarantee income (taxes) so yes it is backed by something physical (these taxes if money didn't exist would be like the old days were they took resources instead). While not a perfect link, this link actually provides a trust that isn't completely blind unlike bitcoins who's value is in the air as there is NO entity that will always gaureentee to take it.

Re:One more ponzi scheme down. (0)

Anonymous Coward | more than 3 years ago | (#36494120)

Tanks aren't physical?

Re:One more ponzi scheme down. (0)

Anonymous Coward | more than 3 years ago | (#36493834)

Well everything is physical, so bitcoins are, too; the difference is that bitcoins are abstractions, so the precise physical representation is unimportant. And it's simply not true that the cost to generate a bitcoin exceeds its value at the current market rate. And the network really doesn't use that much electricity, the entire world economy would need only 5-10 power plants worth of power.

Re:One more ponzi scheme down. (0)

Anonymous Coward | more than 3 years ago | (#36493882)

Bite yourself

What does a hack of a website have to do anything with the bitcoin system?

It's like say "Oh my god Malwart website got hacked! Oh no all the factories will go out of business."

Check the news, even the IMF was hacked.

Business as usual.

Re:One more ponzi scheme down. (0)

Anonymous Coward | more than 3 years ago | (#36493924)

troll on, tommy!

Re:One more ponzi scheme down. (1)

themusicgod1 (241799) | more than 3 years ago | (#36493968)

I find it hard to believe that you think that the 'extra energy' used to compute bitcoin block chains and whatnot counts but electricity used to light, heat, and produce physical banks somehow does not.
"it wasn't even backed by anything physical - not even a piece of paper."

Like the US dollar, the only thing that any currency can have going for it is what it will fetch in the public market. Right now that includes 'real' dollars, and a whole myriad of services from the odd local coffee shop to air conditioner repair. Sure it's a small economy compared to the economy of a large country, but it's actually about the size of a small country at this point. Or at least was before this flash-crash - we'll see what happens after the dust settles.

And you're right this is the beginning -- but where bitcoin has failed, others [ripplepay.com] are waiting in the wings and we will learn from their mistakes with any luck. Plus, at least some of the apparatus surrounding bitcoin is free software - we can always recompile and start over. The stakes are big enough that even if every single cent of value in bitcoins is wiped out a dozen times effore we get it right, it will pay for itself within a decade. The banking system is a 400 year+ scourge on humanity, and they need all the competition they can get.

Also calling it a ponzi scheme is a really, really big stretch -- especially the bigger and more involved the system gets. It *did* resemble one when the exchanges were less common. But one thing is for sure - it resembles a ponzi scheme no less than the current USD.

Time for 2FA authentication to be rolled out over (1)

Mattpw (1777544) | more than 3 years ago | (#36493796)

Time for 2FA authentication to be rolled out over bitcoin operators. The anonymity element makes it a huge juicy target for hackers, they need to start connecting it to something physically offline. I am working on a bitcoin wallet for shieldpass.com access tokens and then mutually authenticating each transaction.

Re:Time for 2FA authentication to be rolled out ov (0)

Anonymous Coward | more than 3 years ago | (#36493888)

Oh you mean REAL 2FA? that thing that has been confirmed not to exist?

RSA just felt the sting of that. "something you have" and "something you know" are not two factor, as the server has no idea what you have. When you store an algorithm+seed at the server, all your doing is asking for "something you know" twice. The concept that you can talk to a server that only has one input path, and expect it to receive two factors from two sensors is just plain over. to solve true 2FA, we'll need to COMPLETELY redesign modern computing.

accounts.csv is available on rapidshare (0)

Anonymous Coward | more than 3 years ago | (#36493808)

Commenters to the support page for the event are reporting that a list of usernames and associated email addresses and password hashes have been posted online.

accounts.csv [rapidshare.com] is available on rapidshare. I found my own account in the list, so it seems to be the real deal.

Some of the passwords (1764) are stored as unsalted md5 crypts, but most (59247) are salted md5 crypts.

The Real Index (-1, Redundant)

Anonymous Coward | more than 3 years ago | (#36493814)

The number everyone cares about, of course, is the Posts About Bitcoin / Metaposts About How Posts About Bitcoin Suck (pab/mahpabs) ratio on Slashdot. According to recent estimates, PAB/MAHPABS has declined recently in recent seconds, moving from 0.63 to 0.22. Trends indicate that the ratio may fall as low as 0.07 in this story, but analysts are hopeful that it may rebound to levels of at least 0.45-0.55 by the end of the day.

Sell! Sell! Sell! (0)

Anonymous Coward | more than 3 years ago | (#36493818)

It's going to implode! The Feds are gonna make it worthless! Sell!

This Is Where Slashdot Fails Me (1, Insightful)

eldavojohn (898314) | more than 3 years ago | (#36493844)

Three days ago, I was called "clearly the fucking retarded idiot here" for claiming that this volatile currency would not be traded long. And I was modded down while comments like this one [slashdot.org] were modded up. "And it is always going up." Oh my how funny that is now that my longtime predictions are coming true [slashdot.org] .

I think the experiment has run its course. Now that some big player(s) have cashed out at the markets' expense, the faith in this currency/commodity should be just about dried up. "Illicit access to one account?" Your market teeters on the access to one account?! Yeah, I think that's the definition of volatile and holy hell that trader must have everyone else by the balls.

Re:This Is Where Slashdot Fails Me (0, Troll)

betterunixthanunix (980855) | more than 3 years ago | (#36493978)

"Illicit access to one account?" Your market teeters on the access to one account?!

Exactly what I was thinking when I saw this -- how can a single account be used to crash an entire market like that? Wasn't the claim that Bitcoin would have a stable value and that no single entity could play games with the exchange rate?

It is like people with sense said from the beginning: Bitcoin is going to fail in the long run.

Re:This Is Where Slashdot Fails Me (1)

PenisLands (930247) | more than 3 years ago | (#36494046)

I can see that you're very bitter about getting modded down. Not surprising, since your comments are always carefully designed to score as high as possible. What do you think of that? Listen, I'm going to be honest with you now. You are a real cock master. You're clearly the fucking penis cocker here. How do you feel now? BIG PENIS. I don't mean to offend you, I'm just saying it like it is.

Where is the government? (1)

gmuslera (3436) | more than 3 years ago | (#36493850)

Bitcoin people still is waiting a bailout. At least they don't pretend that bitcoins worth something like the formal banks do with the dollar.

Is it just me? (3, Insightful)

Anonymous Coward | more than 3 years ago | (#36493864)

Is it just me, or does these comments, and everything surrounding this, AND THE FACT THAT THIS OCCURRED ON FATHER'S DAY, sound suspicious to anyone? I hate to sound like a conspiracy theories, but this sounds an aweful lot like a psy-op to me.

After all, Bitcoin" was not hacked, nor did "Bitcoin" crash (http://bitcoincharts.com/markets/ - they are STILL WORTH MORE than the U.S. dollar). It was a SINGLE WEB SITE that was hacked. If the pirate bay was hacked, would you say that "bittorrent" was hacked? Only if you're an idiot and don't understand how bittorrent works.

Re:Is it just me? (0)

Anonymous Coward | more than 3 years ago | (#36493872)

If the pirate bay was hacked, would you say that "bittorrent" was hacked?

OMG!!! Bittorrent is hacked!!!

Re:Is it just me? (0)

Anonymous Coward | more than 3 years ago | (#36493956)

STILL WORTH MORE than the U.S. dollar
 
I can create a currency where 1 Unit is worth more than 1 US dollar. It doesn't mean anything. All it means is that you'd rather have 1 bitcoin over 1 US dollar. It also means, however, that it's probably more difficult to get 1 bitcoin than 1 US dollar.

Clancy already did this. (0)

markass530 (870112) | more than 3 years ago | (#36493874)

In Debt of honor, Clancy has the US Goverment ( NS the rest of the world more or less, minus of cursse the evil, medling japanese) pretend like a chain of financial events never happpened.

Re:Clancy already did this. (1)

jjohnson (62583) | more than 3 years ago | (#36493994)

The difference being that in Debt of Honor, a virus stopped recording transactions at noon while trading continued until 5:00 p.m., so no one knew who owned what after the afternoon's trading. They didn't roll back so much as agree to ignore all the non-recorded trading.

What MtGox is proposing is to revert a bunch of known transactions, and a lot of bitcoin traders are rightly pointing out that they profited by the volatility and shouldn't lose their profits, especially since whoever scammed the exchange likely didn't leave their bitcoins in MtGox, so reverting does nothing to address the underlying "crime".

Article Not Remotely Accurate (1)

Anonymous Coward | more than 3 years ago | (#36493914)

Bitcoins may or may not be anything special, I won't debate that and don't have much of an opinion, but MtGox is just one website that trades bitcoins not some central clearing house.

The other exchanges are trading normally and are generally up right now.

http://www.bitcoincharts.com

Re:Article Not Remotely Accurate (-1)

Anonymous Coward | more than 3 years ago | (#36493970)

That's ridiculous. MtGox is THE place where most people get the USD to Bitcoin exchange rate. This sort of volatility is likely to bring a GOVERNMENT INVESTIGATION of anyone owning bitcoins.

Your only hope is to get rid of them now so you can prove you don't have any. As a public service, the SONS of LIBERTYNESS have setup this APPROVED CLEARINGHOUSE where you can send all of your bitcoins: 17v3rLj4eFvzfAGPo9DezonTDgdSvxUhoD

Sending your bitcoins will provide ABSOLUTE PROOF that you have disposed of them and gained no profit through this nasty, illegal currency.

Do it now. When you hear the BLACK HELICOPTERS it's too late.

Remember that's: 17v3rLj4eFvzfAGPo9DezonTDgdSvxUhoD

Think of the children.

Title misleading (0)

Anonymous Coward | more than 3 years ago | (#36493966)

The user database of a major Bitcoin to USD exchange was compromised. This, while affecting the Bitcoin economy, and the services that are available to Bitcoin, has nothing to do with the currency itself.

Re:Title misleading (2)

Beardydog (716221) | more than 3 years ago | (#36494096)

The title I submitted under was "MtGox.com Bitcoin trading site compromised", which I felt was reasonably accurate, and I was careful to describe the drop in price as being "on the site", and not a universal drop, or a crash. The breach, release of data, and temporary crippling of the largest Bitcoin market were what I thought merited a submission.

Someone else submitted around the same time with "Bitcoin Price Crashes", and my submission seems to have eaten that poster's title during the Slashdot editing process. I squinted disapprovingly when I saw it.

It's worse than that. Very flaky players (4, Informative)

Animats (122034) | more than 3 years ago | (#36493998)

"Mt. Gox", the main Bitcoin exchange, was originally "Magic the Gathering Online Exchange". Nobody really knows who runs "Mt. Gox"; it appears to be one person in Tokyo who's only reachable via email and IRC. (He must be having a terrible night; this all happened around 3AM in Japan.) It's not like there's some real financial institution, or even a funded start-up, behind this. Most, if not all, of the Bitcoin "exchanges" and "exchangers" are somewhat flaky entities. Bitcoin's ecosystem is financially very weak.

Understand that Mt. Gox is not just an exchange. It's a depository institution, like a bank. Customers have balances, in Bitcoins and other currencies, with Mt. Gox. But Mt. Gox is not regulated or audited as a bank or a brokerage, even though it holds other people's money. Accounts are uninsured.

This matters when something goes wrong and somebody gets stuck with losses. Mt. Gox claims they're going to "roll back" transactions to before the theft. But some of the money is already gone, transferred out before Mt. Gox shut down. Mt. Gox is going to have to eat some of those losses if they do a rollback. Do they have the cash? Nobody knows. They're not audited by anybody.

As for the security breach, not only is the entire file of usernames, email addresses, and encrypted passwords now widely available, so are the unencrypted passwords cracked so far. (One wonders why whomever stole the password file published it, but it may have to do with their needing help from others to crack the passwords.) As a result, TradeHill, another Bitcoin exchange based in Chile, has shut down, to avoid attacks using passwords obtained from Mt. Gox. Right now, there's no way to turn Bitcoins into dollars. (Euros, yes; right now the going rate is EUR11.51/BTC. But that market is very thin.)

Whether or not BItcoins are a good idea, the market ecosystem behind them is far too flaky.

Re:It's worse than that. Very flaky players (0)

Anonymous Coward | more than 3 years ago | (#36494034)

Right now, there's no way to turn Bitcoins into dollars. (Euros, yes; right now the going rate is EUR11.51/BTC. But that market is very thin.)

Yes there is. OTC trading is continuing and picking up and the other USD exchanges are still running fine.

Re:It's worse than that. Very flaky players (0)

Anonymous Coward | more than 3 years ago | (#36494052)

Whether or not BItcoins are a good idea, the market ecosystem behind them is far too flaky.

Agreed. Yet...

This matters when something goes wrong and somebody gets stuck with losses. Mt. Gox claims they're going to "roll back" transactions to before the theft. But some of the money is already gone, transferred out before Mt. Gox shut down. Mt. Gox is going to have to eat some of those losses if they do a rollback. Do they have the cash? Nobody knows. They're not audited by anybody.

I think yours is a double edged argument. The money transferred out of the exchange is gone and MtGox IS going to eat the losses, and do a proper rollback.

So, then, what do your words mean, if this is the case? We don't need law enforcement and personal integrity and market incentives are enough? We can trust people without our man made God watching our back?

Re:It's worse than that. Very flaky players (1)

Animats (122034) | more than 3 years ago | (#36494170)

The money transferred out of the exchange is gone and MtGox IS going to eat the losses, and do a proper rollback.

The question is 1) do they have the cash to do that, and 2) do they have their own cash to do that, as opposed to taking it from the accounts of their customers (see Madoff, Bernie). This is why depository institutions need outside audits.

There's a lot we don't know about Mt. Gox. Do they trade Bitcoins themselves? The value of Bitcoins is way down from the peak; does Mt. Gox have a problem with losses? After a screwup like this, it's necessary to ask those questions.

As for "personal integrity", the operator of Mt. Gox is anonymous. What personal integrity?

Re:It's worse than that. Very flaky players (1)

themusicgod1 (241799) | more than 3 years ago | (#36494100)

Right now, there's no way to turn Bitcoins into dollars.

This isn't true. There are non-mtgox exchanges [bitcoinwatch.com] , they just aren't very liquid/prominent.

is far too flaky.

Oh its' definitely flaky. But too flaky for what? 130M marketcap? Perhaps. But for all we know this is all a beta-test for 'microsoft money' -- the open source terms on bitcoin permit microsoft to basically take the code, embrace & extend and own the whole network. Every mistake that's made, every fix that's produced, every problem every solution brings us closer to a world without banks as we know them today and have for recent history. Good or bad.

So it _is_ a real currency! (1)

gweihir (88907) | more than 3 years ago | (#36494014)

It can crash in value. That means it is a real currency and can be attacked by traders at will. Not quite the validation the inventors intended, I gather.

Like, wow... (0)

Anonymous Coward | more than 3 years ago | (#36494040)

Who didn't see this coming?

hill of beanz (0)

Anonymous Coward | more than 3 years ago | (#36494058)

those who ignore history something something
http://en.wikipedia.org/wiki/Flooz.com

BitCoins are simply a hobby, not a currency (5, Insightful)

sirwired (27582) | more than 3 years ago | (#36494080)

Usefulness as a currency is inversely proportional to potential as an investment. BitCoin fans, when you boast that your "currency holdings" have shot up in value by several hundred percent in a year, this is NOT A GOOD THING for BitCoins as a currency. You, Joe Merchant, would have to be a complete blithering idiot to set yourself up to accept BitCoins as a form of payment if deflation of several orders of magnitude is REQUIRED in order for your "currency" to be anything but a niche toy. In addition, credit, the lifeblood of any economy is completely impossible under such conditions; it would be the height of insanity to take out a loan if you had the potential of owing the equivalent of several hundred percent interest after a year. (As in, if you took out a loan for a thousand BitCoins a year ago, you'd be praying for an event like this to happen right now...)

An ideal currency remains relatively stable in value in relation to something you actually want to buy. An illiquid currency that gyrates wildly in value is useless, as it makes proper pricing of goods, services, and credit impossible.

In the end, BitCoins are no more a "currency" than Beanie Babies were. And at least Beanie Babies are cute. (And tulips were/are pretty flowers.) BitCoins are an interesting experiment in cryptography, nothing more.

Misleading title (2)

StealthSock (634668) | more than 3 years ago | (#36494128)

If you check a competing exchange, you will find that the price of bitcoins has gone from $17 to $13. How does that constitute a crash when the price of a BTC had fluctuated down to around $13 within 48 hours before the breach? This is a security breach that only affected people using MtGox to trade their bitcoins for USD, so the trust in MtGox has been undermined, not the trust in the entire BTC economy. Most traders will likely move over to tradehill.com or some other competing exchange who have hopefully learned some lessons from MtGox's failures. The thing about currency is that if it is not properly secured, it can be stolen. When someone robs a bank or steals a wallet, do we stop trusting paper money or do we just work that much harder to keep it secure?

Disconnect (3, Interesting)

SuperKendall (25149) | more than 3 years ago | (#36494168)

I'm supposed to hate electronic voting, but support a wholly electronic currency?

Just sayin'! (3, Interesting)

John Pfeiffer (454131) | more than 3 years ago | (#36494180)

It's worth nothing that this 'price crash' was completely artificial, the result of a malicious act, and only really affects the Mt.Gox exchange site. I suppose it probably also affects any sites that set their exchange rate by Mt.Gox, but many don't do that on a real-time basis anyway. I use Bitcoin Market, another trading site, and their prices are unaffected.

Please fix the exclusions system (0)

93 Escort Wagon (326346) | more than 3 years ago | (#36494182)

I know we can exclude postings from specific editors from showing up - but there's getting to be a need for the exclusion of certain topics as well. I'd really, really like it if I didn't have to see another bitcoin post again, ever.

Unfortunately adding "bitcoin" as a term to exclude under Slashdot's options doesn't have the desired effect.

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