What Did Not Happen At Mt. Gox

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.

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. It's a bit shorter and seems less speculative.

Author here. I think there is some subtlety around the technical point that may be getting lost.

Ittay Eyal and I were the ones who discovered an attack against Bitcoin called selfish mining, where we showed how a miner could earn more than his fair share. This attack did not require, but could benefit from, the attacker racing against honest participants on the peer-to-peer network. Some members of the Bitcoin community claimed that the attacker would reliably lose these races because they start behind.

In the article, I point out that there is indeed a transaction race in this case, that people have demonstrated an ability to outrun transactions, and that this has ramifications for selfish mining. I do not claim that there is a technical impossibility -- quite the contrary! The tricks used to make that succeed are identical to what an aggressive selfish miner would use.

To be fair, malleability attacks require a modified client and some network positioning, so there is nevertheless a technical obstacle. Not one that is impossible to surmount, but one that requires some effort.

I did not know that Mt. Gox performed automatic reissues -- thank you for bringing that up. Would you happen to have a pointer that establishes this?

On the whole, I do not believe that malleability accounts for Gox's collapse at all. Even automatic reissues would put at most the hot wallet at risk. Studies of malleable transactions do not show anywhere near the volume required to account for Gox's collapse. And something I did not mention in the post is that the timing of the observed malleable transactions doesn't match the story from Mt. Gox at all. There is undoubtedly more to this story.

> 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

There's a very good reason to use specific inputs - the only correct way to re-issue transactions is with the same inputs from the failed transaction, ensuring that its impossible for both the old failed transaction and the new one to both exists on the same blockchain.

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.

>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"?

It took me way too long before I stopped reading, looked at a card, and had a lightbulb moment.

Not just that - Magic: The Gathering cards containing the word "thief" in the name.

> 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_Economi...

As he explained, it was a joke.

http://krugman.blogs.nytimes.com/2013/12/29/the-humor-test/

Speaking three languages doesn't qualify him as a competent developer.

Born in France, so he speaks French.

Involved with the internet, so he speaks English.

Lives in Japan, so he speaks Japanese.

This is not impressive.

The normal French academic school curriculum mandates three languages: French, a secondary language studied in-depth, and a tertiary language. So school leavers should be fluent in one, competant in another, and have the basics of a third.

If people are expected to learn languages early, polyglots are the norm.

Some non-Japanese speakers are giving him credit for apologizing in Japanese, and Japanese media is also giving him leeway -- only because he's a foreigner. But his Japanese is really pitiful, and the apology is a farce.

The point of this kind of apology is to tell people you are sorry and you have caused trouble to other people, and you are repenting for this trouble. There is no such feeling in this act of Karpeles.

Moushi-wake-arimasen is a phrase used to mean "there is no excuse [for what I have commited]". He was unable to finish it, and half way through he goes, nan-dakke? Meaning "what was it?". If Mark is really trying to do it Japanese style, he would not have messed up like this. Some people say he is under stress. I don't think that gives a free pass for such a shameful performance.

It's like a foreigner going to US court and thinking, I should act American, so starts by saying "Yo dude, my bad."

I can't speak for his French (or English) proficiency, but I wouldn't go so far as to say that he "speaks Japanese."

He may know enough Japanese to get along in daily life -- many people I know who have lived here for a number of years develop some level of listening proficiency regardless of whether they can speak it -- but the Japanese he uses in the video does not convince me that he can "speak Japanese" in either the normal usage of the phrase (proficiency in the language) or the cultural usage of the phrase (understanding register and when and how to say things).

This should be a perfect, well-rehearsed apology. There's really no excuse for the level of Japanese he demonstrates in there. At the least, he should have written something, had a native check it, and then practiced saying it. He should also have gotten a suit/shirt that fit properly.

I know this comes across as sounding very superficial and nitpicky, but image means a lot here, especially in business situations, and especially with these formal apologies.

I don't know about his motives or feelings, but when I watch that video, it comes across as very half-assed, as if he doesn't really care and someone is making him do it. It's very unprofessional and culturally deaf; I would not use it as evidence that "he's no dummy."

Married to a Japanese woman... allegedly moved there after an accusation of computer fraud in France - http://www.lejsl.com/saone-et-loire/2014/03/01/un-qi-superie...

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_...

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-i...

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/

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.

Third biggest robbery ever if this list is accurate: http://listverse.com/2009/12/01/10-largest-robberies-in-hist...

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?

> 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.

Feeding trolls on IRC sounds like a waste of time when he could have been, like, securing his customers' money or something.

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.

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.