7 ms·

What Did Not Happen At Mt. Gox

291 points by hamdal 13y ago

iancarroll 13y ago
FYI, you can't put <em> tags in your title, although I assume your CMS did that.
ck2 13y ago
Just noticed this new website www.goxbux.com trying to form some kind of group action.
nwh 13y ago
> But elliptic curve crypto is not one of these topics. If the code can generate a handful of Bitcoin account numbers and corresponding keys correctly, there is hardly any reason why it cannot do so for all account numbers and corresponding keys. Not totally true, not every input can yield a valid private key. The very upper ranges of the private key space are limited, as only integers 0x0 through 0xFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFEBAAEDCE6AF48A03BBFD25E8CD0364140 are valid private keys for Bitcoin. You'd have to be stupid unlucky to randomly generate an invalid private key, but it can possibly happen. > If one must pick a cryptocurrency, the lowly dogecoin, of all things, is doing everything right. Yeah, an ancient fork of Litecoin with a meme name is going to save us. Has absolutely no relevancy to the issue at hand of course.
- efuquen 13y ago
  It's funny how you took that last line completely out of context, the author was clearly tongue-in-cheek with that statement, here is the what comes immediately after that sentence: > The community does not take itself seriously. Most importantly, no one pretends that Doge is an investment vehicle, a slayer of Wall Street, or the next Segway. No one would be stupid enough to store their life savings in Dogecoins.
  - tomphoolery 13y ago
    Bitcoin is an experiment, it's not meant to be a new investment product. It should be very clear to anyone involved that this is a volatile atmosphere and anything can happen. After all, it's really just a bunch of geeks with a website. There is no liability here. That said, I do think the author was a bit naive about the Dogecoin reference. Weren't they implicated in some kind of fraud as well? Seems as though that is the primary reason why no one would store their life savings in Dogecoin.
    - rsanders 13y ago
      What good is the experiment if nobody uses it as though it were "real"?
  - deleted 13y ago
    [deleted]
  - nwh 13y ago
    Eh, I hear that a lot but it's fairly far from the reality. It's a two faced presentation from that community, when the price of dogecoin goes up they get behind "doge to the moon", if the price goes down it's "all for fun". To pay for the amount of mining that is going on in altcoins, people must be treating it as an investment vehicle, otherwise miners wouldn't be pulling upwards of 400BTC[0] a day out of the retched things. [0]: Based on Middlecoin.com's performance a few weeks ago, before their hashrate dropped, they were pulling a clean 400BTC from dogecoin and friends (and this is only one single pool!). For them to be pulling 400BTC a day there must be considerably more volume going into the altcoin markets beforehand. No doubt "investors" getting in on the "next big coin" and losing out.
    - derefr 13y ago
      > when the price of dogecoin goes up they get behind "doge to the moon" I don't see how this is incompatible with it being "all for fun." People cheer for sports teams they've bet on, and that's "all for fun." They're not investing in it in a way you'd invest in stocks and bonds; they're just gambling in the same way you'd do at a casino.
  - smtddr 13y ago
    >>No one would be stupid enough to store their life savings in Dogecoins. Author must have missed that Reddit thread on Gox horror stories. There were some really awful decisions people made with their savings. I bet someone is going to make a similar mistake with Doge. We already have folks like this: https://news.ycombinator.com/item?id=7166318 https://news.ycombinator.com/item?id=7166318
    - adrianwaj 13y ago
      Where are all these horror stories?
      - mpyne 13y ago
        /r/bitcoin probably.
      - smtddr 13y ago
        http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/ http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... Here are some of my "favorite"(anger inducing) comments: ▻ Poor student, all he had... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo0vvc http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Son's college fund wiped out... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo57gh http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Used many credit cards... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo8gjd http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Holding coins for a friend(even outside of bitcoin, don't hold money for friends. Usually won't work out)... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo3utn http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Everything he owns is gone, doesn't know how he's going to eat... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo9423 http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Sold his car, put everything he had into bitcoin... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfp3a83 http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ This one is probably fake, too dramatic... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo7mgr http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ This guy lost $8,550 of his wife's money... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo25u3 http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ..and if you read all his comments on that thread, I get the impression he's going back in without his wife's support. Just keep on reading that whole post. At first you'll feel sorry for them, but quickly that sorrow will turn into anger. "Why the @!#&^%$ did you do that?!" is what you'll be repeating in your mind over and over. But none of them beat this one by a Reddit admin from awhile back: ▻ http://www.reddit.com/r/Bitcoin/comments/1c525e/ive_lost_more_money_in_the_past_24_hours_than_ive/ http://www.reddit.com/r/Bitcoin/comments/1c525e/ive_lost_mor... ...just the title alone is epic. Bitcoin, and all the services around it, are gambles. Never gamble with money you can't afford to lose. Reddit should have a huge red glowing banner at the top of /r/bitcoin reminding their users of that at least weekly.
  - trillium 13y ago
    >> No one would be stupid enough to store their life savings in Dogecoins. Yet. No one would do that - yet.
- coldtea 13y ago
  >Yeah, an ancient fork of Litecoin with a meme name is going to save us. Read the rest of what he says. Plus, how is "Dogecoin" any worse than "MagicalTux"?
jordigh 13y ago
Haha, full of Magic: The Gathering cards. That's the kind of humour that I appreciate in a MtGox article.
- doorhammer 13y ago
  It took me way too long before I stopped reading, looked at a card, and had a lightbulb moment.
- VintageCool 13y ago
  Not just that - Magic: The Gathering cards containing the word "thief" in the name.
jeremyjh 13y ago
I think that there are only two real possibilities here: either Gox lost the money but doesn't know how they lost it, or they stole it. Theft is a much simpler hypothesis than many that are being proposed, but this doesn't really fit the pattern of the previous major thefts by wallets trusted by the community. The main difference is we that we know who these people are. It doesn't seem likely they could ever really cash-out without being observed. Even if they don't try to do that there are likely to be indictments and prosecutions that they will have to live through.
- pmorici 13y ago
  There were reports that they laid off a number of employees in late January before this all went down. Maybe one of those disgruntled employees took a copy of the cold storage private keys with them. http://www.reddit.com/r/Bitcoin/comments/1wc2mg/things_just_got_real_at_mtgox/ http://www.reddit.com/r/Bitcoin/comments/1wc2mg/things_just_...
drakaal 13y ago
Author put a lot of thought and work in to telling a great story, but... Would be better if it weren't built on speculation, and limited by the things the author clearly doesn't understand about crypto. Articles like this hurt the Crypto Currency movement because the things they get wrong about what did or didn't happen are speculation that just fuels fires of mistrust for what could happen. And the thing touted as solutions to it happening in the future aren't well researched so they give false security and opportunity for things to happen again. I appreciate the authors effort to drive up the price of Dogecoin, and prevent further fall of BTC prices, but that's all this is.
- axanoeychron 13y ago
  This argument is weak and your tone is dismissive. I think you're ascribing too much intent based on your own biases. You can't just say 'someone doesn't understand' crypto and not explain why. It reeks of an appeal to an authority and is not conducive to discussion. The Dogecoin mentioned at the end was a joke. It's also disingenuous to accuse someone of trying to inflate the price (without evidence) and to say that someone is 'hurting the cryptocurrency movement'. You accuse someone of speculating and and that fuels mistrust and yet oblivious to yourself doing it.
  - drakaal 13y ago
    Enough other people pointed to flaws in the explanations that I didn't feel the need to beat a dead horse about those things. The whole article was a joke. The stuff about Dogecoin seems less a joke than the rest of the article. It is clear the author owns Bitcoins or Dogecoins or both. I can't prove this, but I'll bet 1 cryptocoin of my choosing on it. I don't currently own any Cryptocoins. I sold just shy of $950 after the first fall from $1000 to nearly $550. I bought 10 at $650-ish. It was a good deal, I did not make any comments about BTC while I held with out disclosing my investment in the currency. (I have some journalistic ethics)
    - axanoeychron 13y ago
      I was personally tempted to buy BTC from Mt Gox when they were worth around 90 dollars but decided against it. Shortly thereafter, they were breached and now this. When the currency stabilizes, I'll consider getting some.
ama729 13y ago
> The community has designated a Nobel leaurate as its nemesis, solely because he asked some inevitable questions every thinking person in his profession ought to ask. Does someone know who he's referring to? Edit: Thanks!
- jljljl 13y ago
  I'm guessing it's Paul Krugman. He wrote a few posts questioning the value and viability of bitcoin, and was mocked for it on a number of bitcoin forums. Krugman post: http://mobile.nytimes.com/blogs/krugman/2013/12/28/bitcoin-is-evil/ http://mobile.nytimes.com/blogs/krugman/2013/12/28/bitcoin-i...
- blatherard 13y ago
  Paul Krugman, who won the 2008 Nobel Prize in Economics, has been very critical of Bitcoin. See, e.g. http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/
M4v3R 13y ago
I think that his points against transaction malleability are invalid: - technical one - Bitcoin clients have a 100 ms delay before they relay messages. An attacker can compile a modified client that doesn't have these limitations and successfully outrun the rest. It was shown once that an attacker managed to successfully modify most of Bitcoin transactions on the network for some time in February - social one - IIRC Gox had an automatic system, which reissued Bitcoin transfers if they failed. So you didn't need to phone them or convince in any way - Mt.Gox would send you a new transfer (and exhausting inputs has nothing to do here since they had no reason to use raw transactions API which lets you to use specific inputs, and instead they probably just used the more common sendto API) after it detected the old one failed (TXID not found on the network).
- nwh 13y ago
  Definitely agree on both points, though I'm not convinced malleability has anything to do with their current troubles. They might have lost a few Bitcoin with that trick but it's nothing against half a billion dollars.
- kordless 13y ago
  Agreed. It's known that Mt. Gox was auto-retrying sends after the txids didn't match. FWIW, I submitted the 'what most likely happened' post last night: https://news.ycombinator.com/item?id=7328219 https://news.ycombinator.com/item?id=7328219. It's a bit shorter and seems less speculative.
  - waterlesscloud 13y ago
    Can you link to evidence they auto-retried? Last I'd seen it required contacting their customer service for a manual re-send.
    - kordless 13y ago
      I've read it several places, but don't know the exact source of the information. It's mentioned in this article on the Guardian: http://www.theguardian.com/technology/2014/feb/27/how-does-a-bug-in-bitcoin-lead-to-mtgoxs-collapse http://www.theguardian.com/technology/2014/feb/27/how-does-a...
deleted 13y ago
[deleted]
corresation 13y ago
Far too sarcastic for something that is almost entirely raw, unsupported speculation. Further, it is conflicted -- it disbelieves some statements by Gox, while fully believing others (e.g. "they were in cold storage"). The one element that seems believable are questions about the malleability attack. I do not understand how Gox or any exchange or service wouldn't have an up to the minute, blockchain verified knowledge of exactly what their positions are. Maybe they only did such accounting weekly, or even monthly...but at some point over the supposed multi-year exploit they would have seen that account balances > address holdings.
- agorabinary 13y ago
  This. The author likes to fill the space between his unexplored technical points with this tasteless, dismissive tone that makes me question the value of his argument even before I scroll down to look for an appropriately brief TL;DR. Unfortunately all I find is some strange reverence for the most irreverent cryptocurrency, Dogecoin. I'm sure the billions of unbanked and poor in need of affordable remittances would prefer a currency that takes neither itself nor its users seriously, and which lacks even the economic principles to deflect its alt-coin implausibility, over an increasingly established and appropriately ambitious alternative to the current financial system.
Jd 13y ago
<<The community has designated a Nobel leaurate as its nemesis, solely because he asked some inevitable questions every thinking person in his profession ought to ask>> If I'm not mistaken the Nobel leaurate [sic] in question wrote an article entitled "Bitcoin is evil." That seems to be slightly more than asking questions.
- yuubi 13y ago
  > Nobel[sic] leaurate[sic] Alfred Nobel had nothing to do with the Swedish Bank Prize. It's a scheme between a bank and the Nobel Foundation. http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economi...
- Cless 13y ago
  As he explained, it was a joke. http://krugman.blogs.nytimes.com/2013/12/29/the-humor-test/ http://krugman.blogs.nytimes.com/2013/12/29/the-humor-test/
  - deleted 13y ago
    [deleted]
ck2 13y ago
By the way have you seen Mark Karpeles public apology in Tokyo? (20 seconds in) http://www.youtube.com/watch?v=15IZtzWOzRU http://www.youtube.com/watch?v=15IZtzWOzRU So he is French, educated in Paris and living in Japan since 2009? Speaks French, English and Japanese. Sounds interesting, he's no dummy.
- isaacb 13y ago
  Speaking three languages doesn't qualify him as a competent developer.
  - ck2 13y ago
    Cannot comment on his code. Or how he operates a business. Just that he seems rather smart in general, or rather not stupid. I wonder what the motivation to move to Japan was.
    - jonknee 13y ago
      I suppose it's all relative, but it should be pretty easy to judge his code and how he operates a business--MtGox was by all measures poorly coded and that directly resulted in hundreds of thousands of people being damaged financially. He may have a high IQ, but he is not fit to run a giant financial exchange. I'm not sure any single person is, this is why large financial organizations have tons of people with different areas of expertise (development, security, law, finance, risk, etc etc). He rode "internet freedom" all the way to being way over his head and took everyone else down with him.
      - bennyg 13y ago
        He built an MVP and then kept going by iterating on the same codebase. This is literally the mentality HN tries to collectively push forward. If he had gotten the security/crypto right the tables would be turned and we'd be reading an article about how a guy bootstrapped the largest crypto currency exchange and how many people thought they could do it too and lost everybody's money collectively trying. I'm beginning to think that the only constant in security/crypto is that people fuck it up.
rdmcfee 13y ago
I would think that insider theft is one of the least damaging outcomes for the Gox depositors. Unfortunately I don't know that the Japanese government is going to have the technical expertise to properly identify the theft and track where the coins have moved. I can't imagine that the thieves have managed to squander all of the 750k BTC.
deleted 13y ago
[deleted]
jeffdavis 13y ago
Question: If the bitcoins were stolen, and the thieves later try to trade them, will that be obvious from the blockchain? Or can they successfully spend them without anyone realizing they are stolen?
- wmf 13y ago
  In theory, yes. In practice, MtGox hasn't said what outputs were lost/stolen and there are ways to defeat blockchain analysis like depositing to BTC-E and withdrawing.
ryanobjc 13y ago
The article is ok, and unsurprisingly did well on hn, but it's still the easy first level technical analysis. I learned nothing here. I'd love to see a deeper analysis, but it probably can't come from a computer scientist.
marshray 13y ago
I guess I don't see why the simplest explanation isn't that the US Feds seized the contents of the safe deposit boxes where their cold wallet was kept last year along with the $5m in bank deposits.
- wmf 13y ago
  Then why isn't anyone saying that? Why could they admit $5M was seized but not admit that BTC was also taken at the same time?
  - marshray 13y ago
    A gag order? Could explain a lot of their behavior, actually.
spindritf 13y ago
There are many interesting points made and dealt with in this article but what's weird/wrong/suspicious about a CEO using IRC? Did he say something specifically stupid there? Or is the very medium tainted?
- lutusp 13y ago
  > There are many interesting points made and dealt with in this article but what's weird/wrong/suspicious about a CEO using IRC? It contradicts the image of a corporate heavyweight, who by definition would want to avoid making informal remarks that might be misinterpreted by stockholders or the public. In some contexts, informal remarks by a corporate insider could be taken to suggest an intent to manipulate the public's perception of the company and therefore its market valuation. > Did he say something specifically stupid there? Or is the very medium tainted? Answers: Not necessarily, and yes, definitely.
- wmf 13y ago
  Feeding trolls on IRC sounds like a waste of time when he could have been, like, securing his customers' money or something.
SeanDav 13y ago
Of course this is wildly speculative but perhaps a simple answer is that someone internally at Mt Gox cleaned out the accounts and is blaming hackers and/or bugs. 100's of millions of dollars is easily enough of a temptation for someone to commit major fraud.
egor598 13y ago
How about all the passport + proof of address data, required for registering with Mt.Gox. Where is it stored and has it been stolen / taken by third party? No one seems to ask any questions about this.
vesinisa 13y ago
If the CEO of MtGox Mark Karpeles is under gag order and he is on IRC, couldn't people confirm this by asking him while he is actively discussing some other topic on the channel, to publicly deny that he is under some sort of gag order. If he continues discussing other topics, without denying the gag order, it is an easy way for him to passively communicate that he is under such order without actually breaking the order.
mads 13y ago
We are talking about a half a billion dollar heist here. That's a lot of money - probably in the top 10 of biggest robberies ever committed. You wouldn't have be a super hacker to pull it off. Some hidden cameras, USB key loggers and some microphones in the office could probably have gotten you a lot closer to that money. And if you then could lure MtGox into emptying their hot wallet with the tx mal problem, then even better, but that was probably not even necessary.
- DrStalker 13y ago
  Third biggest robbery ever if this list is accurate: http://listverse.com/2009/12/01/10-largest-robberies-in-history/ http://listverse.com/2009/12/01/10-largest-robberies-in-hist...
  - gnerd 13y ago
    I'm not sure it would count as a robbery as usually in English jurisdictions the term robbery implies force (through violence or threat of violence).
Geee 13y ago
Btw, wouldn't it be easy to track down the mauled transactions and look who initiated them? After all, no one can use MtGox anonymously. Obviously, 'the hacker' could have used hacked accounts (this would have been noticed) or false identities.
richardknop 13y ago
I love the Magic: The Gathering cards in the article. Well done, indeed.

291 points by hamdal 13y ago

iancarroll 13y ago

FYI, you can't put <em> tags in your title, although I assume your CMS did that.

ck2 13y ago

Just noticed this new website www.goxbux.com trying to form some kind of group action.

nwh 13y ago

> But elliptic curve crypto is not one of these topics. If the code can generate a handful of Bitcoin account numbers and corresponding keys correctly, there is hardly any reason why it cannot do so for all account numbers and corresponding keys. Not totally true, not every input can yield a valid private key. The very upper ranges of the private key space are limited, as only integers 0x0 through 0xFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFEBAAEDCE6AF48A03BBFD25E8CD0364140 are valid private keys for Bitcoin. You'd have to be stupid unlucky to randomly generate an invalid private key, but it can possibly happen. > If one must pick a cryptocurrency, the lowly dogecoin, of all things, is doing everything right. Yeah, an ancient fork of Litecoin with a meme name is going to save us. Has absolutely no relevancy to the issue at hand of course.

efuquen 13y ago
It's funny how you took that last line completely out of context, the author was clearly tongue-in-cheek with that statement, here is the what comes immediately after that sentence: > The community does not take itself seriously. Most importantly, no one pretends that Doge is an investment vehicle, a slayer of Wall Street, or the next Segway. No one would be stupid enough to store their life savings in Dogecoins.
- tomphoolery 13y ago
  Bitcoin is an experiment, it's not meant to be a new investment product. It should be very clear to anyone involved that this is a volatile atmosphere and anything can happen. After all, it's really just a bunch of geeks with a website. There is no liability here. That said, I do think the author was a bit naive about the Dogecoin reference. Weren't they implicated in some kind of fraud as well? Seems as though that is the primary reason why no one would store their life savings in Dogecoin.
  - rsanders 13y ago
    What good is the experiment if nobody uses it as though it were "real"?
- deleted 13y ago
  [deleted]
- nwh 13y ago
  Eh, I hear that a lot but it's fairly far from the reality. It's a two faced presentation from that community, when the price of dogecoin goes up they get behind "doge to the moon", if the price goes down it's "all for fun". To pay for the amount of mining that is going on in altcoins, people must be treating it as an investment vehicle, otherwise miners wouldn't be pulling upwards of 400BTC[0] a day out of the retched things. [0]: Based on Middlecoin.com's performance a few weeks ago, before their hashrate dropped, they were pulling a clean 400BTC from dogecoin and friends (and this is only one single pool!). For them to be pulling 400BTC a day there must be considerably more volume going into the altcoin markets beforehand. No doubt "investors" getting in on the "next big coin" and losing out.
  - derefr 13y ago
    > when the price of dogecoin goes up they get behind "doge to the moon" I don't see how this is incompatible with it being "all for fun." People cheer for sports teams they've bet on, and that's "all for fun." They're not investing in it in a way you'd invest in stocks and bonds; they're just gambling in the same way you'd do at a casino.
- smtddr 13y ago
  >>No one would be stupid enough to store their life savings in Dogecoins. Author must have missed that Reddit thread on Gox horror stories. There were some really awful decisions people made with their savings. I bet someone is going to make a similar mistake with Doge. We already have folks like this: https://news.ycombinator.com/item?id=7166318 https://news.ycombinator.com/item?id=7166318
  - adrianwaj 13y ago
    Where are all these horror stories?
    - mpyne 13y ago
      /r/bitcoin probably.
    - smtddr 13y ago
      http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/ http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... Here are some of my "favorite"(anger inducing) comments: ▻ Poor student, all he had... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo0vvc http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Son's college fund wiped out... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo57gh http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Used many credit cards... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo8gjd http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Holding coins for a friend(even outside of bitcoin, don't hold money for friends. Usually won't work out)... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo3utn http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Everything he owns is gone, doesn't know how he's going to eat... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo9423 http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ Sold his car, put everything he had into bitcoin... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfp3a83 http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ This one is probably fake, too dramatic... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo7mgr http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ▻ This guy lost $8,550 of his wife's money... http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo25u3 http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_s... ..and if you read all his comments on that thread, I get the impression he's going back in without his wife's support. Just keep on reading that whole post. At first you'll feel sorry for them, but quickly that sorrow will turn into anger. "Why the @!#&^%$ did you do that?!" is what you'll be repeating in your mind over and over. But none of them beat this one by a Reddit admin from awhile back: ▻ http://www.reddit.com/r/Bitcoin/comments/1c525e/ive_lost_more_money_in_the_past_24_hours_than_ive/ http://www.reddit.com/r/Bitcoin/comments/1c525e/ive_lost_mor... ...just the title alone is epic. Bitcoin, and all the services around it, are gambles. Never gamble with money you can't afford to lose. Reddit should have a huge red glowing banner at the top of /r/bitcoin reminding their users of that at least weekly.
- trillium 13y ago
  >> No one would be stupid enough to store their life savings in Dogecoins. Yet. No one would do that - yet.
coldtea 13y ago
>Yeah, an ancient fork of Litecoin with a meme name is going to save us. Read the rest of what he says. Plus, how is "Dogecoin" any worse than "MagicalTux"?

jordigh 13y ago

Haha, full of Magic: The Gathering cards. That's the kind of humour that I appreciate in a MtGox article.

doorhammer 13y ago
It took me way too long before I stopped reading, looked at a card, and had a lightbulb moment.
VintageCool 13y ago
Not just that - Magic: The Gathering cards containing the word "thief" in the name.

jeremyjh 13y ago

I think that there are only two real possibilities here: either Gox lost the money but doesn't know how they lost it, or they stole it. Theft is a much simpler hypothesis than many that are being proposed, but this doesn't really fit the pattern of the previous major thefts by wallets trusted by the community. The main difference is we that we know who these people are. It doesn't seem likely they could ever really cash-out without being observed. Even if they don't try to do that there are likely to be indictments and prosecutions that they will have to live through.

pmorici 13y ago
There were reports that they laid off a number of employees in late January before this all went down. Maybe one of those disgruntled employees took a copy of the cold storage private keys with them. http://www.reddit.com/r/Bitcoin/comments/1wc2mg/things_just_got_real_at_mtgox/ http://www.reddit.com/r/Bitcoin/comments/1wc2mg/things_just_...

drakaal 13y ago

Author put a lot of thought and work in to telling a great story, but... Would be better if it weren't built on speculation, and limited by the things the author clearly doesn't understand about crypto. Articles like this hurt the Crypto Currency movement because the things they get wrong about what did or didn't happen are speculation that just fuels fires of mistrust for what could happen. And the thing touted as solutions to it happening in the future aren't well researched so they give false security and opportunity for things to happen again. I appreciate the authors effort to drive up the price of Dogecoin, and prevent further fall of BTC prices, but that's all this is.

axanoeychron 13y ago
This argument is weak and your tone is dismissive. I think you're ascribing too much intent based on your own biases. You can't just say 'someone doesn't understand' crypto and not explain why. It reeks of an appeal to an authority and is not conducive to discussion. The Dogecoin mentioned at the end was a joke. It's also disingenuous to accuse someone of trying to inflate the price (without evidence) and to say that someone is 'hurting the cryptocurrency movement'. You accuse someone of speculating and and that fuels mistrust and yet oblivious to yourself doing it.
- drakaal 13y ago
  Enough other people pointed to flaws in the explanations that I didn't feel the need to beat a dead horse about those things. The whole article was a joke. The stuff about Dogecoin seems less a joke than the rest of the article. It is clear the author owns Bitcoins or Dogecoins or both. I can't prove this, but I'll bet 1 cryptocoin of my choosing on it. I don't currently own any Cryptocoins. I sold just shy of $950 after the first fall from $1000 to nearly $550. I bought 10 at $650-ish. It was a good deal, I did not make any comments about BTC while I held with out disclosing my investment in the currency. (I have some journalistic ethics)
  - axanoeychron 13y ago
    I was personally tempted to buy BTC from Mt Gox when they were worth around 90 dollars but decided against it. Shortly thereafter, they were breached and now this. When the currency stabilizes, I'll consider getting some.

ama729 13y ago

> The community has designated a Nobel leaurate as its nemesis, solely because he asked some inevitable questions every thinking person in his profession ought to ask. Does someone know who he's referring to? Edit: Thanks!

jljljl 13y ago
I'm guessing it's Paul Krugman. He wrote a few posts questioning the value and viability of bitcoin, and was mocked for it on a number of bitcoin forums. Krugman post: http://mobile.nytimes.com/blogs/krugman/2013/12/28/bitcoin-is-evil/ http://mobile.nytimes.com/blogs/krugman/2013/12/28/bitcoin-i...
blatherard 13y ago
Paul Krugman, who won the 2008 Nobel Prize in Economics, has been very critical of Bitcoin. See, e.g. http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/

M4v3R 13y ago

I think that his points against transaction malleability are invalid: - technical one - Bitcoin clients have a 100 ms delay before they relay messages. An attacker can compile a modified client that doesn't have these limitations and successfully outrun the rest. It was shown once that an attacker managed to successfully modify most of Bitcoin transactions on the network for some time in February - social one - IIRC Gox had an automatic system, which reissued Bitcoin transfers if they failed. So you didn't need to phone them or convince in any way - Mt.Gox would send you a new transfer (and exhausting inputs has nothing to do here since they had no reason to use raw transactions API which lets you to use specific inputs, and instead they probably just used the more common sendto API) after it detected the old one failed (TXID not found on the network).

nwh 13y ago
Definitely agree on both points, though I'm not convinced malleability has anything to do with their current troubles. They might have lost a few Bitcoin with that trick but it's nothing against half a billion dollars.
kordless 13y ago
Agreed. It's known that Mt. Gox was auto-retrying sends after the txids didn't match. FWIW, I submitted the 'what most likely happened' post last night: https://news.ycombinator.com/item?id=7328219 https://news.ycombinator.com/item?id=7328219. It's a bit shorter and seems less speculative.
- waterlesscloud 13y ago
  Can you link to evidence they auto-retried? Last I'd seen it required contacting their customer service for a manual re-send.
  - kordless 13y ago
    I've read it several places, but don't know the exact source of the information. It's mentioned in this article on the Guardian: http://www.theguardian.com/technology/2014/feb/27/how-does-a-bug-in-bitcoin-lead-to-mtgoxs-collapse http://www.theguardian.com/technology/2014/feb/27/how-does-a...

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corresation 13y ago

Far too sarcastic for something that is almost entirely raw, unsupported speculation. Further, it is conflicted -- it disbelieves some statements by Gox, while fully believing others (e.g. "they were in cold storage"). The one element that seems believable are questions about the malleability attack. I do not understand how Gox or any exchange or service wouldn't have an up to the minute, blockchain verified knowledge of exactly what their positions are. Maybe they only did such accounting weekly, or even monthly...but at some point over the supposed multi-year exploit they would have seen that account balances > address holdings.

agorabinary 13y ago
This. The author likes to fill the space between his unexplored technical points with this tasteless, dismissive tone that makes me question the value of his argument even before I scroll down to look for an appropriately brief TL;DR. Unfortunately all I find is some strange reverence for the most irreverent cryptocurrency, Dogecoin. I'm sure the billions of unbanked and poor in need of affordable remittances would prefer a currency that takes neither itself nor its users seriously, and which lacks even the economic principles to deflect its alt-coin implausibility, over an increasingly established and appropriately ambitious alternative to the current financial system.

Jd 13y ago

<<The community has designated a Nobel leaurate as its nemesis, solely because he asked some inevitable questions every thinking person in his profession ought to ask>> If I'm not mistaken the Nobel leaurate [sic] in question wrote an article entitled "Bitcoin is evil." That seems to be slightly more than asking questions.

yuubi 13y ago
> Nobel[sic] leaurate[sic] Alfred Nobel had nothing to do with the Swedish Bank Prize. It's a scheme between a bank and the Nobel Foundation. http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economi...
Cless 13y ago
As he explained, it was a joke. http://krugman.blogs.nytimes.com/2013/12/29/the-humor-test/ http://krugman.blogs.nytimes.com/2013/12/29/the-humor-test/
- deleted 13y ago
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ck2 13y ago

By the way have you seen Mark Karpeles public apology in Tokyo? (20 seconds in) http://www.youtube.com/watch?v=15IZtzWOzRU http://www.youtube.com/watch?v=15IZtzWOzRU So he is French, educated in Paris and living in Japan since 2009? Speaks French, English and Japanese. Sounds interesting, he's no dummy.

isaacb 13y ago
Speaking three languages doesn't qualify him as a competent developer.
- ck2 13y ago
  Cannot comment on his code. Or how he operates a business. Just that he seems rather smart in general, or rather not stupid. I wonder what the motivation to move to Japan was.
  - jonknee 13y ago
    I suppose it's all relative, but it should be pretty easy to judge his code and how he operates a business--MtGox was by all measures poorly coded and that directly resulted in hundreds of thousands of people being damaged financially. He may have a high IQ, but he is not fit to run a giant financial exchange. I'm not sure any single person is, this is why large financial organizations have tons of people with different areas of expertise (development, security, law, finance, risk, etc etc). He rode "internet freedom" all the way to being way over his head and took everyone else down with him.
    - bennyg 13y ago
      He built an MVP and then kept going by iterating on the same codebase. This is literally the mentality HN tries to collectively push forward. If he had gotten the security/crypto right the tables would be turned and we'd be reading an article about how a guy bootstrapped the largest crypto currency exchange and how many people thought they could do it too and lost everybody's money collectively trying. I'm beginning to think that the only constant in security/crypto is that people fuck it up.

rdmcfee 13y ago

I would think that insider theft is one of the least damaging outcomes for the Gox depositors. Unfortunately I don't know that the Japanese government is going to have the technical expertise to properly identify the theft and track where the coins have moved. I can't imagine that the thieves have managed to squander all of the 750k BTC.

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jeffdavis 13y ago

Question: If the bitcoins were stolen, and the thieves later try to trade them, will that be obvious from the blockchain? Or can they successfully spend them without anyone realizing they are stolen?

wmf 13y ago
In theory, yes. In practice, MtGox hasn't said what outputs were lost/stolen and there are ways to defeat blockchain analysis like depositing to BTC-E and withdrawing.

ryanobjc 13y ago

The article is ok, and unsurprisingly did well on hn, but it's still the easy first level technical analysis. I learned nothing here. I'd love to see a deeper analysis, but it probably can't come from a computer scientist.

marshray 13y ago

I guess I don't see why the simplest explanation isn't that the US Feds seized the contents of the safe deposit boxes where their cold wallet was kept last year along with the $5m in bank deposits.

wmf 13y ago
Then why isn't anyone saying that? Why could they admit $5M was seized but not admit that BTC was also taken at the same time?
- marshray 13y ago
  A gag order? Could explain a lot of their behavior, actually.

spindritf 13y ago

There are many interesting points made and dealt with in this article but what's weird/wrong/suspicious about a CEO using IRC? Did he say something specifically stupid there? Or is the very medium tainted?

lutusp 13y ago
> There are many interesting points made and dealt with in this article but what's weird/wrong/suspicious about a CEO using IRC? It contradicts the image of a corporate heavyweight, who by definition would want to avoid making informal remarks that might be misinterpreted by stockholders or the public. In some contexts, informal remarks by a corporate insider could be taken to suggest an intent to manipulate the public's perception of the company and therefore its market valuation. > Did he say something specifically stupid there? Or is the very medium tainted? Answers: Not necessarily, and yes, definitely.
wmf 13y ago
Feeding trolls on IRC sounds like a waste of time when he could have been, like, securing his customers' money or something.

SeanDav 13y ago

Of course this is wildly speculative but perhaps a simple answer is that someone internally at Mt Gox cleaned out the accounts and is blaming hackers and/or bugs. 100's of millions of dollars is easily enough of a temptation for someone to commit major fraud.

egor598 13y ago

How about all the passport + proof of address data, required for registering with Mt.Gox. Where is it stored and has it been stolen / taken by third party? No one seems to ask any questions about this.

vesinisa 13y ago

If the CEO of MtGox Mark Karpeles is under gag order and he is on IRC, couldn't people confirm this by asking him while he is actively discussing some other topic on the channel, to publicly deny that he is under some sort of gag order. If he continues discussing other topics, without denying the gag order, it is an easy way for him to passively communicate that he is under such order without actually breaking the order.

mads 13y ago

We are talking about a half a billion dollar heist here. That's a lot of money - probably in the top 10 of biggest robberies ever committed. You wouldn't have be a super hacker to pull it off. Some hidden cameras, USB key loggers and some microphones in the office could probably have gotten you a lot closer to that money. And if you then could lure MtGox into emptying their hot wallet with the tx mal problem, then even better, but that was probably not even necessary.

DrStalker 13y ago
Third biggest robbery ever if this list is accurate: http://listverse.com/2009/12/01/10-largest-robberies-in-history/ http://listverse.com/2009/12/01/10-largest-robberies-in-hist...
- gnerd 13y ago
  I'm not sure it would count as a robbery as usually in English jurisdictions the term robbery implies force (through violence or threat of violence).

Geee 13y ago

Btw, wouldn't it be easy to track down the mauled transactions and look who initiated them? After all, no one can use MtGox anonymously. Obviously, 'the hacker' could have used hacked accounts (this would have been noticed) or false identities.

richardknop 13y ago

I love the Magic: The Gathering cards in the article. Well done, indeed.