
There was no widespread use of malleability attacks before the closure of MtGox - roasbeef
http://arxiv.org/abs/1403.6676
======
sillysaurus3
What's there to say? This is yet another piece of evidence that Mt. Gox was
grossly incompetent. Unfortunately, it's very difficult to prove whether or
not there was any criminal fraud involved. If there was, and it could be
proven, then at least justice could be served. If there wasn't any fraud, and
that could be proven, then at least it could be shown that Karpeles was just a
bad businessman, not a fraudster, and his name could be cleared. This limbo
leaves so many questions unanswered that it's hard to know if we're ever going
to find out what truly happened.

Mt. Gox recently claimed they found 200,000 BTC that they'd lost track of. If
their claim can be taken at face value, then I think it's plausible they may
have panicked back when their losses first became clear to them in February,
leading them to blame it on malleability even though they didn't really have a
clue where their money went or why. They probably felt they had to tell people
_something_ , and saying "we lost track of >750,000 BTC for unknown reasons"
may have been less desirable than blaming their problems on something
tangible, like transaction malleability. Unfortunately for them, it turns out
that they were wrong about that.

So here we are. All that's been demonstrated is that consumers currently have
very little protection in this space, and that patio11 and others were right
to warn people to be very careful with bitcoin.

~~~
rtpg
I'm not necessarily pro-bitcoin, but there's a difference between bitcoin:the
protocol and bitcoin: services offered around this.

I think this is more another case of pretty incompetent people going into this
(probably linked to the fact that a lot of proponents of bitcoin are in it for
the ponzi-scheme like qualities of the current environment). Maybe we'll get
some people who've taken an accounting class and a concurrency class(necessary
but not sufficient conditions) to implement these exchanges one day.

The public ledger in particular could be used to establish a good amount of
trust with an exchange (publicly-auditable). The only problem being that many
bitcoin proponents buy into the myth that bitcoin allows you to remain
anonymous, and that the exchanges should be built in the same way as money
laundering services.

We'll probably see a lot of this so long as the current environment is based
around bitcoin being some sort of investment vehicle like gold. Maybe if
enough people actually start wanting to use it as a currency, the quality of
these services will go up, and we can trust them a bit more. Maybe actually
having exchanges bail each other out (see Japanese banks in the 80s/90s) and
supplying safety nets would increase trust.

~~~
sillysaurus3
The problem, which I can't figure out a way to solve, is that any exchange can
die at any time due to massive theft or failure. When this happens, customers
will lose all of their funds.

People have mentioned m-of-n transactions as one possible solution, which
means that the customer and the exchange both have to approve of any
transaction involving the customer's funds. But this may preclude realtime
trading, which is usually one of the main purposes of an exchange.

It's a tough problem, and there may be a solution. I'm continuing to think
about it.

~~~
M4v3R
Yes, m-of-n addresses are the solution, we use it on Bitalo [0]. It's true
that it is less suitable for day traders, and while they make the most of
network volume, they are not the only purpose that exchanges exist. Some
people just want to buy Bitcoin occasionally, i.e. once a week, month or less
frequently. They also want a secure place to store them. I believe that for
those people, our service is the perfect answer :).

[0] [https://bitalo.com/why_bitalo](https://bitalo.com/why_bitalo)

~~~
MichaelGG
Can you explain how this works? I read the page, but I don't quite get it. If
Bitalo has one key and I have one key, what's the benefit?

\- If Bitalo loses their key, I lose my money.

\- If I lose my key, I lose my money (so I still need backups).

\- Still need my own keystore device, so it's not more convenient.

\- If I have a single device and it gets hacked, the attacker can emulate me
to Bitalo.

\- If I have multiple devices, why can't I use m-of-n without Bitalo?

I'm not trying to be negative, I just feel I'm overlooking something simple.

~~~
M4v3R
You only need to remember your password, from which your key is derived. You
also need to write a recovery string (which can be used to derive your key as
well) on a piece of paper and store it somewhere safe as a backup in case you
forgot your password.

Now from our side, there's very little chance we lose your key (we do
encrypted offsite backups every hour) and even then we're currently
implementing "presigned transactions" that use "nLockTime" function in Bitcoin
protocol to let you claim your Bitcoins after certain amount of time in case
we disappear.

Also, we require you to use 2-factor, so even if your computer gets hacked,
attacker still can't emulate your actions to steal your coins. And if an
attacker hacks our server, he only gets one key of two needed to spend the
funds.

~~~
MichaelGG
Do you do 2FA when people enter their passwords? Otherwise isn't this like a
password-derived wallet?

Presigned transactions sounds very neat.

~~~
M4v3R
Yes, you need 2FA for each login, for releasing funds as a seller, and for
withdrawing coins.

------
gargarplex
I personally believe that Karpeles committed fraud and stole users' money, but
I believe that category of risk was absolutely known and correctly priced into
the instrument. What do you folks think?

EDIT: A rational response is a much more satisfying outcome for you, if you
can pull it off, rather than mere downvoting to attempt to force your hopes
for reality onto the world.. yes, you do achieve a minor victory, a move
forward against the hurt, downvoted opponent.. but not truly closer to
victory, secure in a rational interpretation of events.

~~~
nknighthb
That would seem to mean either something went horribly and abruptly wrong with
his scheme, or he forgot "and run". Which one are you postulating, and why?

~~~
gargarplex
I am postulating that he looks guilty here.

[http://graphics8.nytimes.com/images/2014/03/27/business/dbpi...](http://graphics8.nytimes.com/images/2014/03/27/business/dbpix-
bitcoin-mt-gox2/dbpix-bitcoin-mt-gox2-tmagArticle.jpg)

And I can't tell you why. Maybe I'm projecting. But it's my gut intuition.
Though is this not a category of thought that should be discerned via "fast
thinking"? Are there any studies that compare test subjects' judgments of
guilt, based on defendant photographs, to jury verdicts?

~~~
nknighthb
Never serve on a jury.

~~~
gargarplex
Haha, oh man. Do you think the judge would let me cite this thread as evidence
for why I should be excused?

Also: you have a cognitive error, bud. I was a victim in this case; I would
not be eligible for the jury. Fundamental attribution error

[http://en.wikipedia.org/wiki/Fundamental_attribution_error](http://en.wikipedia.org/wiki/Fundamental_attribution_error)

~~~
nknighthb
Any jury, anywhere, for any case. People who think they can infer guilt from
an utterly neutral facial expression captured in a still image are not fit to
participate in any system of justice.

~~~
gargarplex
OK, that comment was mean. Are you aware of that?

edit: hahahaha, all right, whatever. he still looks guilty to me. sorry if
he's innocent. regardless, there is definitely a sentiment, and i voiced it. i
don't regret contributing. maybe my tone or something could have been
improved? i'm not sure, because i don't disagree with my actions.

~~~
DanBC
...but throwing around accusations of guilt of a criminal offence because of a
photo is fine?

------
reinhardt1053
Karpelès was found guilty of a financial computer crime and of money transfer
fraud when he was somewhere between 13 and 18 years old. The court gave him a
3 month suspended sentence and no criminal record.[0]

[0]
[http://en.wikipedia.org/wiki/Mark_Karpel%C3%A8s](http://en.wikipedia.org/wiki/Mark_Karpel%C3%A8s)

~~~
thefreeman
I hardly see this as relevant. For all we know he found a credit card on the
internet and signed up for Brazzer's.

~~~
MichaelGG
From the source cited on Wikipedia[1]:

"I will not give too much detail about what I did wrong, just say it concerns
payment systems on the Internet. I spent two years taking risks becoming
larger, perhaps because it was an exciting side … whatever, I ended up getting
arrested"

Without more details it doesn't mean much, but it does sound a bit more than
using a stray card -- if that translated post is actually from him.

------
bobjordan
Take it with a grain of salt but at least there is a rumor that MtGox has
found 670K more coins: [http://theblogchain.com/news/mtgox-found-
bitcoin/](http://theblogchain.com/news/mtgox-found-bitcoin/)

------
negamax
Blockchain is readable as this text. Just get a particular date range and
check all transfers for that, filter by an amount!

------
wodzu
MtGox certainly benefited from these attacks as it proved the problem is real.

The real question is who was behind these attacks?

------
singularityyy
That seems like the most plausible scenario anyway. Karpeles was just trying
to take down Bitcoin with him by blaming it on a 'Bitcoin bug'. All this is a
joke just like everything else in this sad saga, such as "cold storage
leaking".

I wouldn't attribute to malice what could be explained by incompetence, but
seriously, this cannot be explained by incompetence.

