Hacker News Reader

Before seeing this crash for the last couple of days, it felt like the advantage was that bitcoin users were mostly geeks, and mostly trustworthy.

Yeah whatever. 90% of the people using Bitcoin don't believe in the Federal Reserve system or fiat money and just want anonymous online cash transactions. There is nothing wrong with such beliefs or desires, but the idea that such people are on a higher moral plane is the complaint of a naive person at best.

On the other hand, holding the belief that everyone is morally identical is even more naive.

I'm actually almost glad Bitcoin has suffered these high-profile attacks. The amount of money actually lost seems to be relatively small, and its better attacks like this happen now, whilst the market is still small. Without regulation or reversible transactions, Bitcoin security has to be very good indeed, and this is the sort of incident that might encourage better security measures.

Quite frankly, Mt. Gox never struck me as particularly secure. I'm very surprised anyone would keep a large amount of money in it, instead of transferring it out to their accounts.

I agree. Stress tests like this are inevitable, so the sooner they happen, the better hardened Mt Gox and other exchanges can become.

This (http://news.ycombinator.com/item?id=2676336) is why it happened.

  > Then trying to withdraw $5 million USD from Mt. Gox?

He was stating that he could have withdrawn the entire amount, but didn't want to appear shady (especially since doing so would have made him seem even more like a hacker that initiated the sell order).

Yeah, reading the story that is what he says, but the fact that the also doesn't want to give back the 600BTC or so that he ended up getting out to me suggests that he isn't quite that honest.

If the limit had been $10,000 -- I'm sure he would have gone for that.

Why? There is a perfectly legitimate argument for letting him keep the funds. They were put up for sale, and he bought them. It was MtGox's systems that executed the trade. If the sell order was invalid, it was MtGox's fault, or the seller account holder's, not the buyer's.

I'm not really sure I agree with this.

The right to sell something is predicated on owning the item in question.

A buyer of stolen goods is unable to take legal ownership, it doesn't matter if he doesn't know the item is stolen. (i.e. I steal a car, and sell it to you, you don't own the car even though you gave me money and you didn't know the car was stolen)

It does matter that the coins were not put up for sale by the owner.

So, would you say the same if I placed a standing buy order two weeks ago, and it was automatically executed?

How is a buyer supposed to know if the seller is making a bona fide offer, esp. where the buyer may place its buy order in advance of the sell order?

I stand by my position that it's up to the exchange and the seller to protect against unauthorized sell orders.

Of course, under extreme circumstances, the buyer will see that something is out of place – as is exactly the case here, where the buyer came forward because he felt that the sell order was not valid.

BUT (and here's the most important point): who gets to decide when a case is "extreme" enough to put the burden on the buyer? It's not a call anyone should be able to make, unless there are clear rules, published up front.

Yes I would say the exact same thing. The buyer was a direct counter-party to a trade involving stolen property.

The buyer isn't liable as he didn't know the property was stolen, but he don't get to keep the property. Typically in this case he would need to seek damages from the exchange to recover his assets (the dollars used in the trade)

IANAL but I have first hand seen this type of stuff on various exchanges. (i.e. stock gets fraudulently wired out one account, and sold. Trades get busted)

It sucks all around, but the fact of the matter is the great deal the buyer was getting never would have existed if somebody didn't steal from someone else. If I stole your life savings and sold it to your neighbor for a dollar, you don't really think your neighbor should be able to keep it do you?

Buying stolen goods on an exchange doesn't make it ok. It sounds to me that you'd like it to be - but that isn't how it works.

I doubt you'll find much legal precedent (or published rules on the exchanges) supporting your theory, except in the case where a broker makes unauthorized trades on a seller's behalf. Feel free to prove me wrong...

When I say I have seen it I mean I have seen it first hand. I have worked for banks where trades were unwound with the counter-party for this exact reason. The implementation is messy, but no bank on the other side of a trade wants to be party to trafficking in stolen goods resulting from a fraudulent trade.

What happened here is akin to me logging into your brokerage account with a stolen password and selling all your securities. This happens and those trades get busted. Sometimes the selling bank just eats the loss as it would take too much work or too much embarrassment to recover, but other times they work with the counter-party to unwind.

I'm not asserting this happens in all cases. As I said above, IANAL. I know equity laws in particular are a bit different than a lot of other types of property which fall under common-law.

That is kind of moot though as equity laws don't apply here - bit-coins aren't equity.

Also, you're talking about counterparties cooperating because they do many transactions together at the institutional level. That's different from the exchange itself voiding the transaction.

> A buyer of stolen goods is unable to take legal ownership, it doesn't matter if he doesn't know the item is stolen.

This is (subject to numerous exceptions) not correct. While in common law you are correct, in equity, if the buyer is a bona fide purchaser for value without notice, he or she can get title.

(IANAL, TINLA)

Can you point me to the evidence that the coins were not put up for sale by the owner? I did not realize that was established.

When Nick Leeson traded fraudulently with Barings customer's assets did they get a do-over?

--

http://en.wikipedia.org/wiki/Rogue_trader - shows other examples too

I feel like the concept of "own" is specific to the item. Land ownership is very different than owning money, for example. BitCoin ownership is fairly clear, it's part of the algorithm, and I feel like that should be respected. If you don't respect the rules of the commodity, then don't participate; to change the rules takes away the uniqueness of the commodity.

Are you using "honest" to mean "good intentions"? Because I think he's told the truth about everything, and I'm not surprised that someone who made money in a market wants to keep that money.

How is that not honest? He followed the rules of trade even though he knew he could easily exploit them.

So the same folks encrypting their grocery lists with 8192bit RSA so the NSA doesn't read them are relying on ideals to keep the currency exchange functioning?

A system robust against outright criminals still works when you have decent people. The converse is not true.

> Then trying to withdraw $5 million USD from Mt. Gox?

He didn't do that. He withdrew $1000, once, and some bitcoins. Then notified the administrators.

It sounded like he probably tried to remove the bitcoins, hit the limit, then contemplated hitting that $1000 limit a bunch of times.

Honestly, this whole forum post reeks of "I know I did something wrong, hopefully posting here will make the pit in my stomach go away."

Same goes for contacting magicaltux (the admin of mtgox) -- I bet he was absolutely losing his mind when the trade went through. I know I would have been.

You're upset he contemplated doing something shady? Jesus, since when has uncouth thoughts been grounds for conviction? If it was, I'd be guilty of a trillion crimes.

>Jesus, since when has uncouth thoughts been grounds for conviction? If it was, I'd be guilty of a trillion crimes.

Are you seriously putting these words in my mouth? I didn't say anything like that. The gist of my post was that from a casual reader's perspective, bitcoin was a hobby for cryptographic nerds, and that this demonstrated that it's "lost its innocence", so to speak.

Am I "upset" by this? Sure. In the same way that I would be upset if I was competing on something like allrgb, but nvidia decided to come in and destroy me and my friends by building custom glass. Is nvidia be "immoral" there? No. Are they being, to be blunt, assholes?

Thoughtcrime? Convicted?

I want this to be clear to anybody reading this that doesn't understand the context of what I'm saying: (I'm trying to say this in the most polite way possible) your response here is completely incorrect, and without merit.

You're accusing me of something that I consider morally abhorrent (accusing somebody of "thoughtcrime"), and it's ridiculous.

> It sounded like he [...] contemplated hitting that $1000 limit a bunch of times.

That's the thought, and you treat it like a crime. Hence, thought-crime.

How am I treating this like a crime? I'm saying that all of the players in bitcoin aren't altruistic.

In case you missed the context here, my original argument was that my naivety caused me to assume that people playing with bitcoin were mostly just cryto geeks.

> Honestly, this whole forum post reeks of "I know I did something wrong, hopefully posting here will make the pit in my stomach go away."

This is what you said about him contemplating transferring more money out of mtgox. You're acting like he did something abhorrent, or should think he did.

> my naivety caused me to assume that people playing with bitcoin were mostly just cryto geeks.

They are. But you're trying to say "... and I'm surprised one of them would be thiefly, like this guy."

Really, all this shows is that he should have transferred all the bitcoins out immediately. Then mtgox would have to deal with him instead of just slandering him. Now that he's pointed everything out to them he's just a scapegoat.

Tell that to the British people:

http://en.wikipedia.org/wiki/George_Soros

http://en.wikipedia.org/wiki/Black_Wednesday

What happened here is just natural selfishness: the person that executed this buy order knew that the market was crashing, and that something was going wrong, but decided to exploit it regardless.

All others moaning about what he did who bid at 0.1 weren't?