A Bitcoin Address with 782,000 BTC Moved Through It | Hacker News Reader

A Bitcoin Address with 782,000 BTC Moved Through It

blockchain.info

189 pointspatio11112 comments

While I am still terribly sad that I didn't mine bitcoins with my workstation 3-4 years ago, I am glad I can stand at the sidelines and watch this amazing drama unfold.

Incidentally, I never figured out how to pronounce "Mt.Gox" But now I know: "Empty Gox" sounds about right :-)

7 - 8 years ago I was envying all my friends who were buying properties that keep going up and up ...

I bought my house 6 years ago. I bought some bitcoins this autumn.

You lucky bastard! :D

It sounds like a winning investment strategy would be to go short on whatever you are investing in.

Can this be applied recursively? Can you go short on your own going short, then go short on that as well?

That was the best back-handed compliment I’ve heard since the last episode of Downtown Abbey. I'm sure csv hates you every tiny bit I love you right now. :)

I don't hate anyone. I love living in my house, and I was fully aware of the risk when I bought my bitcoins. And I actually bought them just after the collapse when China dropped out, so I bought them at EUR 470, and now they're EUR 430 or thereabouts. The loss isn't huge. Yet. I'm not sure if I should cut my losses at this point.

Then I would have lost a lot on my Apple investment years ago. My only mistake there was to sell years too early.

Also, I'm not sure how I can go short on the house I intend to live in.

please tell me about your next investment so I can keep my money safe

Just FYI, bitcoin has had half a dozen 50% retraces into 1000% explosions already. This is probably another one (I hope, at least, I just bought another 2 btc at 480).

>has had half a dozen 50% retraces into 1000% explosions already.

Something shared by almost every hyped and now defunct securities out there.

Upside potential should not be the only factor for selecting an investment.

Risk management => Downside risk, liquidity, momentum etc. are way more important than limited past performance.

A better argument would be the evidence the hash rate is going through the roof. The inertia of those miners won't be stopped by bad sentiment caused by even worse software venerabilities. You either believe in the idea of what crypto currency technologies bring us, or you don't. Invest accordingly and leave your fears at the door.

When the price of electricity is higher than the mining payout, the hash rate will again plummet. Even though hashing with ASICs is much more efficient than CPUs or GPUs, it still takes electricity. And if the transaction rate remains low, the payouts are going to be smaller and smaller.

Mining capacity should act like a utility company that spins up and down power stations in response to demand for electricity. Mining slows until transactions payments go up enough to make it worthwhile. (And that doesn't even cover the fact that mining is still a lottery for the pools).

Change in hash rate only gives you a loose indication of what the miners guesses the price development will be, assuming you know their cost base well enough (i.e. there are no ASIC developments that people have been keeping quiet).

Also, any strongly positive or negative correlations to the price movements in other financial instruments.

It hardly matters that Bitcoin spikes and crashes its price every so often if you can't move your other investments around to profit from it. For this reason, every hedge fund manager on the planet is constantly looking for strongly negatively correlated prices that no one else knows about yet, or paying quants to invent instruments that show such behavior so that they have the information advantage until the other guys' quants decipher the formulas.

The graph that shows price vs time for a single asset is not a great thing to look at in isolation if your goal is to make piles of money on it.

I blew all my money on Beanie Babies and tulips.

I'm pretty sure its "Mount Gocks".

Funny fact, Mt.Gox originally stood for Magic The Gathering Online eXchange.

No, it almost certainly did not originally stand for "Magic the Gathering Online Exchange".

https://en.wikipedia.org/wiki/Talk:Mt.Gox#Possible_citogenes...

Discussion about this topic on HN: https://news.ycombinator.com/item?id=7249615

What's in dispute is whether there was ever a card trading site hosted at mtgox.com, not whether that's what it stands for. Even if it never hosted a card trading site, it is generally assumed that the domain was originally purchased for one.

It almost certainly did, but it was never used for that purpose.

It certainly did, which is easily confirmed with archive.org:

https://web.archive.org/web/20070525044536/http://mtgox.com/...

Clarification: MTGOX was intended to stand for that, but the card exchange was never finished, probably for lack of interest.

Which means Mt.Gox did originally indeed stand for Magic The Gathering Online eXchange. Doesn't really matter if it was finished or not when talking about what the origin of it is.

McCaleb has said that MtGox was at least at some point used for trading or buying cards.

You didn't need to mine any coins. You just had to pick your buy and sell points correctly.

That's all you need to do to make money on stocks, or bonds, or any other speculative trade. The trick is being consistent :)

Sure. The point is that mining wouldn't have helped if you sold at the wrong moment.

So... for those that might not know how to read the blockchain.info site, this isn't 782,000 BTC moved today.

That's the total amount the address has ever been exposed to, ever. As you scroll down you'll see red arrows and green arrows, along with dates. Red = withdraws from the address, and green = deposits into the address. You can see the dates and note this is just an address that's been doing business(whatever that is) for awhile now. You see the pagination at the bottom and can view history for at least a year back.

In short, this isn't news. It's people who are angry looking for a target. Don't let this be a repeat of SheepMarketPlace fiasco... http://www.theguardian.com/technology/2013/dec/09/recovering...

You can't catch bitcoin thieves this way. They need to make some other mistake somewhere else outside of blockchain world.

Yeah, it could be just a coincidence that the total amount matches the amount stolen from Mt. Gox. Or it could be the culprit.

Is it possible to verify whether this came from Mt. Gox? And Whether it matches the transactions that were messed with?

The fact that it wasn't all moved today does not mean it isn't related. The theft was due to a leak that happened over a long period of time. The transactions to this address start in April of 2012. That is entirely consistent with the theft. 740k worth of transactions in one day would make it a less likely candidate for being related.

What are the Public Note: sections in the blockchain about?

One of the transactions from this account traces down to this address (https://blockchain.info/address/16cou7Ht6WjTzuFyDBnht9hmvXyt...) that contains 53,000 BTC. Transactions into this account have Public Notes saying things like

- Worth a shot. My sis really is dying man. https://www.facebook.com/MySisterHasCancer. Debts around 310,000.00 now. I dont get it, its nothing to you..

- I am from Russia. Help to buy a house. I need 100 BTC. 1MEmKEuJxXT71UgRCAhDpjDpYWSMSNcgKp I would be grateful :) Would century are numbered ;)

- I am a Chinese college students, I have a loving father, but I can not help him, he needs to do heart bypass surgery, I can not help him, because the cost of 100,000 or so needed, please help me, lifelong You pray Thank you!

Any ideas what that's all about?

Just random people begging for money; trying their luck.

https://blockchain.info/wallet/website-faq

Scroll to the very bottom.

I'm not really familiar with how all these annotations work, but that is spam, no? There are a few references to casions. One message about a "SR mixer" where BTC owners send an amount to a certain address to have it mixed and returned (which I don't trust a bit). It looks to me--though as I said, I may be misunderstanding it--that this account is engaged in some light BTC phishing?

edit: oh, yup. misunderstanding. Those are transaction to the wallet, presumably because this wallet is so obviously well-heeled.

This address was mentioned in November in Washington Post article about 194,993 BTC transaction:

[Sarah Meiklejohn: ] "About half of the transactions sending bitcoins to this 12sENw address between August 29 and November 14 were from addresses we had associated with Bitstamp. This could be true for a lot of reasons (a heavyweight user withdrawing their bitcoins, for example), but there were a few other weird things I saw that made me think otherwise.

For example, a lot of the bitcoins that flowed out of the 12sENw address went to one of two other addresses: 1Drt3c8 and (especially recently) 1HBa5. The former of these addresses we have tagged as Bitstamp, and the latter is often within one hop of a known Bitstamp address (e.g., it has also sent a lot of bitcoins to 1Drt3c8).

So, while a lot of things could explain many bitcoins being received from Bitstamp, it seems like fewer of them could be explained by many bitcoins flowing from Bitstamp and then back to Bitstamp in a small span of time which is what leads me to think this is an internal shuffling of some kind.

Of course, I could also be completely wrong! For example, I should definitely mention that, for the direct transaction of interest, I don't have any of the input addresses tagged (i.e., they might or might not belong to Bitstamp), so that my inferences are really just going on the past behavior of this small handful of addresses."

http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/23...

So this address was tagged as "Bitstamp" in her database.

I doubt this is the thief's wallet because it would mean that they somehow managed to execute withdrawals of 3k and 5k bitcoin 7 and 5 days ago respectively - MtGox has stopped all withdrawals for weeks/months now.

The number of transactions seems low as well, the malleability bug would have involved thousands of smaller transactions.

It would also be insanely stupid for a sophisticated hacker to funnel their loot through a single wallet. Someone who understands transaction malleability enough to exploit it likely won't be making that mistake.

It isn't hard to pick out a number of bitcoin and then dive into the blockchain and find a wallet that has a same/similar number of bitcoins. Similar types of misidentification happen during the Silk Road and Sheep Marketplace heists.

I don't think they are suggesting it's the thief's wallet - it's presumably the Gox hot storage wallet.

It never had more than a few thousand BTC (except for a few peaks) at any point in time. [1]

[1] - https://blockchain.info/charts/balance?address=1Drt3c8pSdrky...

Also fairly round, large denomination. Even when scamming somebody as incompetent as MtGox, as a criminal I'd be more elaborate than saying "I haven't received the 5000 BTC, can you send them again?" to the same address hundreds of times.

I don't think this has anything to do with it, it should be easy to determine if the transaction are linked to MtGox and malled tx's

Criminals are lazy

Do you think this means that it is less likely, or more likely to be related to the thefts?

According to Gox, the theft was happening over a long period of time, not one lump sum. Transfers to this address began in April of 2012, which is consistent with the story.

If this address does belong to the thief, why would they steal all the bitcoins with a single address? Surely using different addresses would make it less suspicious

I don't necessarily believe that this address was related to the theft, only pointing out that the expectation of one transaction containing all the stolen bitcoin is not correct. Yes, using different addresses would be less suspicious.

How accurate this is? It looks like at few points balance is negative.

How traceable are bitcoins? Would it be possible to track when someone tried to offload the stolen bitcoins on one of the major exchanges by tracing back to this address or some Gox logs?

Given the value of the stolen coins are in the range of 0.5B USD it's not unreasonable to suspect that some government capacity would investigate this.

If the stolen coins can indeed be detected - how would they go about extracting the value? Seems like a large scale, risky money laundry effort would be needed.

You can trace all transactions forever, they're all public in the Bitcoin ledger (blockchain). But since Bitcoins are fungible, if you transfer them to an address that holds BTC from many people, you can "mix" them and make it harder to tell to where did your amount go: https://en.bitcoin.it/wiki/Mixing_service

You can also use alt-coin exchanges, e.g. BTC->LTC->BTC, or even multiple exchanges (one to buy, one to sell) to obscure the trail even more.

Keep in mind older transactions are pruned from the tree on most nodes. While you may see where a Bitcoin originated, not all intermediate addresses will be shown forever in some version of the Blockchain. That's not to say that someone somewhere doesn't have the full blockchain, so you should keep in mind that it depends on what blockchain you are viewing at the time of investigation.

If I were the NSA, I'd be keeping track of the full blockchain.

Based on current observations, I would assume they are and have for some time.

That's not exactly true. Older transactions aren't indexed by most nodes, so it's a lot of work to retrieve them, but almost all nodes still have a full copy of the entire transaction history.

You can't trace individual coins, but you can trace amounts. Bitcoin is made of nothing but the blockchain which is the whole ledger of which wallet owns how many BTC.

You cannot[1] track thieves through the blockchain like this. If you're going to catch any alleged MtGox thieves, they need to make some other mistake outside of bitcoin-world. Like a leaked email, or telling a friend who then goes leak it, etc. e.g. SilkRoad's Dread Pirate Roberts got caught because of his errors outside of bitcoin's blockchain.

1. https://news.ycombinator.com/item?id=7235113

Your argument would benefit from precision; it's exactly 'through the blockchain' that you can track thieves. The issue you are bringing up is that it is straightforward to move value off the blockchain.

I stand corrected. :)

So, what about it? Does it belong to some BTC exchange? Or is it all stolen, or something?

I'm pretty sure there are lots of company and governmental bank accounts with lots of money moving through them...

MtGox has about 700k+ BTC

Wasn't it said they lost 700k BTC? Also just comparing balances doesn't seem like a very strong indicator of identity to me.

Couldn't someone with a known withdrawal from mtgox use the address the money came from to trace up the blockchain? I don't know if gox used multiple wallets, but if not it should be pretty obvious where the money came from and went.

This refers back to http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-S..., an allegedly leaked MtGox document detailing their crisis management strategy, where a theft of 744,408 BTC is discussed.

I think in another 5-10 years bitcoin will finally be realized as one of the great scams of our time

Why would it be? Bitcoin on it's own is just a good that can be traded, just like gold, silver, or bags of potatoes. If you setup an exchange for gold,but then instead of paying people who deposited gold with you ran away with all of it, would you call gold a "scam"?

Or tulips.... https://en.wikipedia.org/wiki/Tulip_mania

This is really annoying. No - not even comparable to Tulip mania. That thing was based on artificially limited supply. If you want to start trading bitcoin or get your own miner, you can do it any time you want at a reasonable investment. Supply is always known in this case and demand is not ongoing (as in, bitcoins you keep don't disappear after a couple of days, unless you keep them with mtgox). Or do you want to explain why it's comparable?

Because bitcoin has an artificially limited supply built into the system and the pricing has exhibited the kind of wild fluctuations more characteristic of penny stocks rather than a currency? Toss in the fact that the entire system is predicated on making early adopters rich and it's a basic econ lesson concealed behind some cool crypto code.

Isn't BTC supply also artificially limited? I though that was the whole point so it wouldn't become 'inflationary'?

I can't stop being amazed by the persistent denial and non-sequitur arguments made by many BTC fans as to why none of the problems BTC has been suffering from are relevant and how BTC is nothing like a tulip bubble or a pyramid scheme, or a scam, or whatever, but the 'money' of the future. Huge price swings, theft, illicit trade, failing exchanges, problems withdrawing or converting BTC, yeah sounds like a great alternative to 'money controlled by central banks' :-S

It's just like gold, silver, and it's definitely much better than fiat, because... it's THE FUTURE, it's FREE, and it uses TECHNOLOGY!

> Isn't BTC supply also artificially limited?

It's limited in a known and consistent way. I'd say it was artificially limited if there was a person telling you you can't get more than 1BTC/mth while others could find a way to work around it.

Basically it's "world cannot produce more tulips" -vs- "I forbid you to start your tulip farm using law and crazy high prices". One of those will fall, the other will not. I'm not saying it's not a scam, that early adopters don't have leverage, that there are no problems, etc. Only that tulip mania does not apply here.

Any time hordes of people are rushing into a new investment with an unstable price in hopes of getting rich quick and assuring themselves that the math will protect their investment then it is exactly like Tulip Mania.

The diamond market is way more comparable to tulips than Bitcoin.

I missed the part where people were able to use tulips to transfer money internationally, without fees, and faster than established wiring methods.

You can't smell a Bitcoin or admire its beauty. You're missing the point.

That's a separate set of characteristics from talking about Bitcoin as an investment.

Tulips, when the price crashed, were still pretty flowers.

Bitcoins, if the price goes to $0.01/BTC, still have those characteristics you described.

Not really - the ability to use Bitcoins to transfer useful amounts of money is very much dependant on their value and vice-versa. They probably don't need to be anywhere near the current price in order to support the current transaction volume, but I doubt $0.01/BTC would work.

True - I was reaching out for an extreme. When the price dropped to less than $3 from ~$35 I think it was close to losing its critical mass, but I think as long as the price is at least $10-20/BTC, the infrastructure backing it as a medium of transfer will still exist.

Bitcoin is a game for geeks: nothing more, nothing less.

But digital currencies will be the future. It's just that we have still to find the best way to do it.

A digital currency with libertarian ideas hardcoded in it is not a good idea. We don't need a new gold.

A successful digital currency has to be attractive to people who are free to choose among a variety of digital currencies. That implies it must have properties that are like gold, or perhaps even more compelling in the same ways. Or you have to find a different set of compelling properties.

I don't think you can get around the fact that free people have a set of motives that is at cross purposes with governments. If you degrade the ability of governments to seize or control the transfer property and information, the Leviathan starts to look like a 20th c. museum piece. Hobbesianism is at least as dogmatic, rigid, and brittle as big-L Libertarianism.

The biggest scam of BitCoin is never even mentioned; that the creator reserved for himself vast numbers of them.

How dare he take profits for his work! How dare Zuckerberg keep 56% of Facebook for himself. Jesus the things we read on HN these days.

Well, now that you mention it, I think it is totally fair to take a critical view of the way we allocate the rewards for a successful enterprise. There's no natural law at play here. We live in a system that deliberately rewards founders and financiers over the other pieces of the puzzle.

Well, he wouldn't have gotten more than any other early adopter. And nobody accuses them of being scammers - just taking a heck of a gamble and it paying off.

Edit: Apologies, I did more research after posting this comment. Apparently Satoshi did mine quite a lot in the early days, but the addresses he used are well-known (one of the advantages of a public ledger - go to blockchain.info and look at any block with an index less than 20,000), and if anyone tried to spend them, it would be in the news.

That is simply not true!

The creator was one of the early miners and benefited from that, but whoever Satoshi was, he/she did NOT reserve a large number of bitcoins. (This HAS happened with certain other alt-coins.)

While I think bitcoin might not go the distance, It's clear that crypto currencies have a place in the world. Looking back through history, practically every major technology has it's initial boom, catastrophic bust and gradual rise back to stability phase.

In the first half of the 20th century there were thousands of car manufacturers. Then came the shakedown which reduced that number to a fraction, then slowly, bit by bit, stability and diversity returned to the auto making industry.

Most people on HN probably remember the dot com bubble, and the sentiment that came with the burst; That the internet was a non starter, that it had failed. But then came the step by step rebuilding process and look at where we are now.

I think the same is true of crypto currencies. We're learning the merits, the risks and the pitfalls. Bit coin may not survive (or maybe it will) but I think long term, crypto currencies are here to stay and we'll look back on this time and marvel at how badly we handled the whole thing.

Life is always dangerous for pioneers, and everyone in the bitcoin business right now is a pioneer. Pioneers serve an important role and while the rewards can be great, the price of failure is often deadly.

One thing I will add in Bitcoins defense: People need to start using the contracts feature that was built into bitcoin from he start. There's no need for people to hold bitcoins in escrow. Keep that stuff in the blockchain where it's safe.

Yep, I think you're spot on. I think the most likely scenario ends up with useful cryptocurrency being to a large extent co-opted by governments (much as the web has been). That might be a blow to libertarian dreams, but I think we'll still see radical changes as a result.

This whole situation reminds me of Michael Bolton's virus in Office Space.

Yeah or Richard Pryor in Superman III

If I was going to steal 782,000 BTC over a period of two years why would I steal them all from the same address? Doesn't pass the sniff test.

Nice try hacker.

The hacker really only needs to be slightly smarter than whoever wrote that bad PHP in the first place. It's not implausible really that they'd send it through the same address.

To save you doing the math, that many bitcoins is about $375 million at today's prices - not that the market is deep enough to be able to sell it for anywhere near that price.

It really surprises me that Bitstamp has absorbed 100k+ in last 24 hours at current price range.

Seems that quite a lot of the volume on that address[1] is about 40% of the volume of the of the stuff going through MT Gox[2]. Might be a coincidence.

[1] https://blockchain.info/charts/received-per-day?timespan=180...

[2] http://bitcoincharts.com/charts/bitstampUSD#rg180ztgSzm1g10z...

Context would be nice.

MtGox is the context i believe

The alleged Mt. Gox insolvency document claims that they lost about 744,408 BTC due to malleability-related theft which went unnoticed for several years. This is an address that just happens to have had 782,558 BTC flow through it over the last two years.

Of course, if the Mt. Gox document is a fake, the author could easily have chosen an amount that corresponded to an address that had such a number of Bitcoins flow through it.

It's difficult to know what's going on here.

The account shows transactions roughly matching the number of BTC missing from Mt. Gox. The recent transaction lots are large: 3000 - 15,000 BTC going back to December (at least, I'm still looking). That's $1.5 - $7.5 million in daily TX, which is pretty damned significant. Well above financial reporting requirements pretty much anywhere. For a long time this was at $10k in the US, though that threshold is now lower with improved technical capabilities.

Odd story: a friend of mine was a bagman for a con artist who happened to get caught. The friend ended up testifying in the case. Quite some years back.

Edit: The account dates to April, 2012, with lots of TX, including large blocks, even fairly early on. There's some discussion at reddit here:

http://www.reddit.com/r/Bitcoin/comments/1yvdcd/heres_a_summ...

Well I don't know if this matters but it checks out against benford's law, or at least kinda... http://i.imgur.com/nL9lO6r.png

for comparison here is a dataset that doesn't checkout against benford's law (it's the city of Chicago's employee Salaries)

[IMG]http://i.imgur.com/SxAY1d2.png (don't get too alarmed though, it fails because they've used estimations for hourly employees)

It is possible for the exchanges and miners to get together and change the protocol, to mark the stolen bitcoins as invalid? The thief is probably going to dump the stolen bitcoins on the market - not exactly a good thing for the bitcoin price or the long term viability of bitcoin itself.

Especially since it will take quite some time to dump all thsoe bitcoins - the market isn't all that liquid.

Nobody can say for sure the bitcoins in that address are stolen.

But it would be very possible to reject bitcoins from certain addresses, and the protocol don't need to be changed. All it would take is make a client to reject to include transactions to/from blacklisted addresses into blockchain. And for everyone to update clients. That still would be vulnerable to 51% attack, but it is very real possibility.

It's a flawed idea though unfortunately - a malicious party could have a legitimate address blacklisted by sending stolen bitcoin to them.

It's a wonderfully interesting social issue. We have this high stakes protocol where everything is transparent and the whole system needs to be in a consensus. It's fantastic watching the internal struggle.

Get the pitchforks and the torches! Looks like we've got ourselves a witch-hunt.

Don't worry, the internet is pretty good at these. I mean, Reddit did a great job with the ... oh, that's right.

I hope, his USB-stick doesn't get corrupted or unreadable ...

I'm sure you could find several addresses with a transaction amount in those heights. Exchanges don't operate from a single address - so any theft could only be traced back to several addresses.

Same time MtGox Disappeared

No, it's not, the 780k were not from a recent transaction, they're the cumulative sum of all transactions in the last two years on that address.

The leaked mtgox document claims that 700k coins went missing over the last 2 years

If somebody wanted forge "leaked strategy document" these kind of verifiable facts would be nice to put in.

Many of those transactions were recent. Though the account dates to April, 2012, the volume of TX seems to have accelerated through 2013 and 2014.

More (only because I'm learning this as I go): the balance shows the flow of funds in and out of that account. I've traced a bunch to various endpoints and through intermediaries:

https://blockchain.info/charts/balance?timespan=all&showData...

http://www.reddit.com/r/Bitcoin/comments/1yvdcd/heres_a_summ...

That was me.

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