Bitcoins/Litecoins/Virtual Currencies

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Tuco

Tuco

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One element of 'regulation' they're talking about it is some kind of open-network of black and red listing of stolen BTC. As in those BTC 'lost' by mtgox are marked as stolen and exchanges/stores that subscribe to this black/red network will be made aware of a marked BTC.

This, of course, goes against one of the core principles of anonymous crypto-currency transactions and would likely be a nightmare to implement. Having to deal with selling a chair for 50mBTC and having two of those mBTC be blacklisted would be a huge hassle. Everytime someone found a new way to launder their dirty coins into the system people would spend a ton of their time telling the black list network they're legit users.

One of the first BTC purchases was for a pizza for 10k BTC. And I guess virtually anyone who has a BTC or more has a small part of those 10kBTC..
 
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Silence_sl

shitlord
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Tuco_sl said:
One element of 'regulation' they're talking about it is some kind of open-network of black and red listing of stolen BTC. As in those BTC 'lost' by mtgox are marked as stolen and exchanges/stores that subscribe to this black/red network will be made aware of a marked BTC.

This, of course, goes against one of the core principles of anonymous crypto-currency transactions and would likely be a nightmare to implement. Having to deal with selling a chair for 50mBTC and having two of those mBTC be blacklisted would be a huge hassle. Everytime someone found a new way to launder their dirty coins into the system people would spend a ton of their time telling the black list network they're legit users.

One of the first BTC purchases was for a pizza for 10k BTC. And I guess virtually anyone who has a BTC or more has a small part of those 10kBTC..
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...or, users could have completely avoided an operation that has been half-assed since day one. That's a far better solution than tacking fixes onto something that isn't broken.
 
mkopec

mkopec

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Wasnt the whole premise behind this currency in the first place that it could never be stolen?
 
S

Silence_sl

shitlord
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mkopec_sl said:
Wasnt the whole premise behind this currency in the first place that it could never be stolen?
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Wallets can be stolen and contents emptied with the help of a lead pipe and lots of blood.

I'd bet dollars to donuts that this will wind up being a rather poorly thought out Ponzi scheme after all the dust has settled.
 
AladainAF

AladainAF

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Silence_sl said:
Wallets can be stolen and contents emptied with the help of a lead pipe and lots of blood.

I'd bet dollars to donuts that this will wind up being a rather poorly thought out Ponzi scheme after all the dust has settled.
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I've been very surprised to see Bitcoins worth so much. I had 37, which I cashed out a bit too early (still did okay though), but when I started seeing CNBC tracking bitcoin alongside CNY, JPY, CAD, etc, I knew right then and there that BTC was done. You can't expect a wholly unregulated non-physical in any form currency as vulnerable and with no recourse as Bitcoin to make it. There's a reason there are safegards in place, and why a piece of physical paper "represents" value. I feel terrible for the people who lost tons of money at Mt Gox but they get what they deserve, sadly. You make a ridiculously stupid risky bet, it can burn you.

This is, a very well thought out Ponzi scheme. I mean, the people that got in first got tons of coins, people getting in today legitimately will likely never amass a single coin.

I'd love for something like this to work, but it won't.
 
Tuco

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mkopec_sl said:
Wasnt the whole premise behind this currency in the first place that it could never be stolen?
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Nah. No matter what you can do it can be stolen.
1. If you keep it on a bank/exchnage like coinbase, mtgox, whatever it can be stolen like we saw with mtgox.
2. If you keep it on a digital wallet stored in a password encrypted file on a computer that is disconnected from any networks it can be stolen if someone breaks into your home, transfers that digital wallet file and gets the password for the encryption from you.
3. If you keep it in a physical format ( exPhysical Bitcoins by Casascius
) someone can steal the physical bitcoin from you and get the private key.
 
Melvin

Melvin

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mkopec_sl said:
Wasnt the whole premise behind this currency in the first place that it could never be stolen?
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I always thought the premise was "start printing your monopoly money now because it's going to be more difficult to print in the future, and there will be more demand for it down the road too, because nothing creates demand like a 'clever' mix of hype and artificial scarcity".
 
T

Tea_sl

shitlord
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rinthe_sl said:
Just got this one in the inbox, for those that think regulation is the magic wand (or those that want a melanchol laugh) and not another layer of corruption.

SEC Employees Make Great Stock Pickers
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I just can't fathom how you could arrive at a position that all regulation is unilaterally bad. Like even noted Austrian school crazies Hayek and "child slavery should totally be a thing in the ~free market~" Rothbard acknowledge the necessity of some oversight albeit private in the case of Rothbard.

Because if you're coming from these lofty first principles, then most regulation impairs the inefficiency of markets, but a market that is wholly opaque and completely free from regulation (and contact enforcement, but that's a story for another day) is not open, and thus not subjected to the ~invisible hand~ in a way that maximises efficiency.

Just so we're clear on how fucking bonkers your position is. You're significantly to the right of a guy who thinks child slavery is a-ok.
 
Tuco

Tuco

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I don't think rinthe is saying that regulation is unilaterally bad. I think he was saying it is not unilaterally good.
 
Soygen

Soygen

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So explain in layman's terms(as I don't really know shit about bitcoin) what happens to the bitcoins from this Mt.Gox broker. Why are the bitcoins tied to them? Can't you just take your 'wallet' file or whatever it is and put your coins into another exchange? Why/how can they basically hold your bitcoins hostage?
 
Tuco

Tuco

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Soygen_sl said:
So explain in layman's terms(as I don't really know shit about bitcoin) what happens to the bitcoins from this Mt.Gox broker. Why are the bitcoins tied to them? Can't you just take your 'wallet' file or whatever it is and put your coins into another exchange? Why/how can they basically hold your bitcoins hostage?
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You don't have a wallet file. You gave it to mtgox for safekeeping. Someone crept in and stole it.

If the people who lost hundreds or thousands of BTC because of mtgox kept their wallet in their own pocket (ex: encrypted on an external hard drive or encrypted on their google drive...) then they wouldn't have lost anything.
 
T

Tea_sl

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All of the exchanges work on an internal ledger, so you have to send the coins to their wallet. Right now this is the way it has to work due to the current implementation of the protocol.
 
Eidal

Eidal

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Tuco_sl said:
You don't have a wallet file. You gave it to mtgox for safekeeping. Someone crept in and stole it.

If the people who lost hundreds or thousands of BTC because of mtgox kept their wallet in their own pocket (ex: encrypted on an external hard drive or encrypted on their google drive...) then they wouldn't have lost anything.
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This isn't accurate -- MTGOX users didn't give their wallet (a collection of public/private key pairs) to Gox. They gave their BITCOINS to Gox. They were utilizing Gox as a bank/wallet out of convenience. Compare to the thousands of people who have used Gox but didn't get burnt by this; these people would move USD/Coins to Gox, execute a trade, then withdraw. It was the day-traders and the lazy who got burnt.

It will be a tough learning curve for the world to learn that cryptocurrencies are digital cash without FDIC insurance -- a huge majority of the people you see depressed because their coins were stolen were using an exchange as a wallet. The other 5 percent downloaded a virus.

I keep reading interesting things about Wall Street (by wall street I mean bigger players in the financial markets) getting involved; one would hope that they bring a level of professionalism reguarding security. Not only for securing their users coins, but for educating their users as well. Post on reddit last night saying : ("I had 21 BTC on Gox, how do I get it back?"). Sad, but the fact that this user even had to ask the question shows a fundamental misunderstanding of how this works...
 
Tuco

Tuco

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Eidal_sl said:
This isn't accurate -- MTGOX users didn't give their wallet (a collection of public/private key pairs) to Gox. They gave their BITCOINS to Gox. They were utilizing Gox as a bank/wallet out of convenience.
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Serious question: What's the difference? To me it's the same, MTGOX had unique access to the public/private key pairs.
 
Eidal

Eidal

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Tuco_sl said:
Serious question: What's the difference? To me it's the same, MTGOX had unique access to the public/private key pairs.
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If I send you my wallet, then you and I both can transact with any of the btc within. If I send you bitcoin, it will attached to a private key with which only you can transact. In the scenario you quoted, MtGox has EXCLUSIVE access to the private keys, as opposed to sharing access (which is what would happen if I shared my electrum seed with you, for example).

Slight difference, but the reason I pointed it out was that in this situation, there is no functional security difference between sending a bitcoin to an exchange or handing a bag of cash money to a guy who says he'll totally do what you want him to do with it and definitely not lose it or steal it from you. The only thing a user can trust these days is that the company in question has a greater interest in staying in business than absconding with its entrusted wealth.

EDIT: I suspect we'll see entities spring up that have some form of insurance. My understanding (correct me if I'm wrong) is that you can find insurance for anything, and I'm sure that these talks have already gone down. US-based cryptocurrency bank that isn't fractional WITH an insurance policy that anyone can verify will go a long way to alleviating fear.
 
Tuco

Tuco

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Thanks for the explanation. I think the disagreement was because I was using the term wallet as in literally the wallet in the back of your pants, but the BTC community uses the word wallet as in the way you describe.
 
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