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Bitcoin Update: "Your Money May Be 'Tied Up' In Unconfirmed Transactions"
As the torch of responsibility is rapidly handed off from exchange to exchange to the Bitcoin source code, Gavin Andersen (one of Bitcoin's protocol core developers) explains just what is going on - and what it means for the 'wealth' stored in the virtual currency - "Users of the reference implementation who are bitten by this bug may see their bitcoins “tied up” in unconfirmed transactions" - so that's what 'bit' stands for in bitcoin...
Update On Transaction Malleability
You may have noticed that some exchanges have temporarily suspended withdrawals and wondering what’s going on or more importantly, what’s being done about it. You can be rest assured that we have identified the issue and are collectively and collaboratively working on a solution.
Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions. This is exposing bugs in both the reference implementation and some exchange’s software.
We (core dev team, developers at the exchanges, and even big mining pools) are creating workarounds and fixes right now. This is a denial-of-service attack; whoever is doing this is not stealing coins, but is succeeding in preventing some transactions from confirming. It’s important to note that DoS attacks do not affect people’s bitcoin wallets or funds.
Users of the reference implementation who are bitten by this bug may see their bitcoins “tied up” in unconfirmed transactions; we need to update the software to fix that bug, so when they upgrade those coins are returned to the wallet and are available to spend again. Only users who make multiple transactions in a short period of time will be affected.
As a result, exchanges are temporarily suspending withdrawals to protect customer funds and prevent funds from being misdirected.
Thanks for your patience.
As a reminder, Andersen previously explained:
Transaction malleability has been known about since 2011. In simplest of terms, it is a small window where transaction ID’s can be “renamed” before being confirmed in the blockchain. This is something that cannot be corrected overnight. Therefore, any company dealing with Bitcoin transactions and have coded their own wallet software should responsibly prepare for this possibility and include in their software a way to validate transaction ID’s. Otherwise, it can result in Bitcoin loss and headache for everyone involved.
As Mike Krieger recently noted,
Bitcoin is no longer in Phase 1 of its evolutionary cycle. I believe Phase 2 for Bitcoin began in earnest back in November 2013, when the Senate Committee on Homeland Security and Governmental Affairs held its first hearings on the topic. Those hearings made it clear that, at least for the moment, no significant roadblocks would be put in place to prevent people from transacting with one another using the crypto-currency. Phase 2 also saw the largest Bitcoin investment to-date, a $25 million infusion led by Silicon Valley VC firm Andreessen Horowitz, as well as acceptance by major U.S. retailers, with Overstock being the most significant. Bitcoin is becoming serious, and serious means serious accountability.
As a free market currency, the market will decide the products required to keep the Bitcoin protocol open and functioning to its highest potential.
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Snort. Now that right there is funny stuff. Poor fonestar.
if you dont like bitcoin you can surely trust reggie's ultracoin. he has dona alota research cuz he is who he is
I like Reggie, but I'm puttin' all of my clients in KanyeCoin. Blue Horseshoe loves KanyeCoin!
If he just hung up his "fone"; I'd be happy.
Maybe satoshi blew a load in fonestars mouth so big that he just cant speak at the moment.
If you really want to talk with Fone Star that bad you can always message him on his YouTube Homepage...
https://www.youtube.com/user/weihrauchfan1999
I am adding people to my Little Black Book.
You ought to take a look at the Gun Videos in his Favorites. I like Guns too but Explosives are much more fun...and cheaper.
He's not home from band practice yet.
8 X 16d nails to the cranium will do that better.
With a nail gun.
Why would Fonestar hang himself? Because a minor issue affecting badly coded exchanges temporarily depressed the price of his bitcoins to 3,300% of what they were last January?
I'm sure he's just distraught about it all. He'll never recover.
You remind me of a former poster named Michael with his joker imposed Pelosi avatar. He was her just to pump a 2012 republican presidential primary challenger. Remember him? He disappeared as soon as his guy was eliminated by Romney.
I've been around for a couple years now. I ain't goin' anywhere. :)
Fair enough.
My point is that it makes sense to question why one is so vocal about a certain topic. Posting here and there and everywhere (the gummy bears) on certain topics simply makes me wonder why - those inclined to adopt BTC don't sweat these bumps on the road, but those that don't, why try to refute them?
BTC will prove itself (or not) over the next few years with or without what one posts on an internet board ;)
"BTC will prove itself (or not) over the next few years with or without what one posts on an internet board ;) "
I completely agree! In fact, I tell myself that everytime I see one of my posts voted to -10 because I attempted to explain some technical aspect of the Bitcoin sytem. :P
I post mainly because I find the whole thing so fascinating; nothing like it has ever really existed before. One way or the other, it's going to cause a lot of people to completely rethink what they were taught about economics.
3300% vs last january? no way dude. fonestar bought in circa 2009; just ask him. he's up a gazillion %; just ask him. hell, if the debut was in 2006 he'd claim that. he'd never lie (well, except those lies of his that I've explicitly pointed out).
to hear many of the pumpers, they all bought in a $0.001. Just yesterday a poster claimed to buy at $102 during the flash crash. Nevermind that the $102 window was open for all of 3 seconds. And no one ever claims to have lost money on Btc. Yep, no one bought at $1256 or $1156 or $1056 or $956 or $856 or.... I guess the were no counterparties to those, and they're all fictitious (much like foney's riches)
He just shit his pants so much that he is having trouble getting up to his computer
Good thing he still has that 2006 ford focus to fall back on.
So the network breaks, and your money is unavailable and might be gone forever. Brilliant. A scumbag bank is safer. At least you'll know who to hang.
Honest to god, the first time I heard about phone sex, I thought it was a joke.
Some Dude, is gonna pay by the minute, for what? Shows WTF I know.
I thought sexting was a joke - really did.
"No man, it's forreals!"
WHAT!
Bitcoin is still intact haters. $1k by March 1. You missed your buying opportunity.
I'll add it to the list of thousands of other "buying opportunities" I've missed in the last 30 years.
"Take care to sell your horse before he dies.
The art of life is passing losses on."
Robert Frost
The only reason I like Frost is because he used 'queer' in a poem.
He must have been refering to these "Church of BTC" posts on here.
Thou shalt not draw a picture of prophet Satoshi.
Well damn you need to stop looking to invest and just bury your money...lol
There is a better chance for gold to be 1500EUR/ounce by the end of March than for BTC to be 1000 USD.
that's what got me into bitcoin some stacker fucktard betting someone silver would clear $50 before bitcoin. first time i saw a bitcoin chart what apeach. But hey you can touch silver right and now it does't cost much for the experience.
EscapingProgress Bitcoin is still intact haters.
I think you are the actual hater - hater of reality.
Are you saying that Bitcoin is not, in fact, intact?
He's saying that bitcoin is, in fact, bitfiat.
I don't agree with the label "fiat", since it implies value mandated by a central authority. It's also clearly not a commodity money in the traditional sense, however.
We may need to come up with a new category . . .
...wooden nickel. No, that consists of something real too.
For the moment it appears to be intact.
But considering bitcoin is the biggest cracking challenge NSA has ever seen, the biggest challenge ever to their inflated "we own everybody's data" ego, I wouldn't bet on its intactness nor anonymity going forward.
If it sounds too good to be true, it probably is. That "maxim" has saved me from lots of regrets and lost dollars.
Bitcoin sounds too good to be true.
Just my opinion.
And yes I like the open source concept. I use an open source operating system with no concerns because my open source OS isn't an in-your-face challenge to the biggest central bank and spy agency on the planet
... like fonyfart proudly says bitcoin is.
Perhaps that is just what this is. Maybe the NSA has figured something out and needed to test it. Why not create a DDOS to make lots of garbage in the logs and sneak in a small and isolated attack under the smokescreen? I'm not in the NSA but that's what I'd do. Nobody has time to go through ALL the logs to find that one single attack, especially if they don't even know to look much less what to look for.
Fed to NSA: "FIND a way to break bitcoin damnit. We don't care how you do it, but do it. We're NOT gonna be one-uped by some sleazy slant-eye. Need money? Just say the word, we'll buy you the biggest baddest computers, biggest baddest hackers, whatever, but BREAK that damn thing, CAPICHE?"
Saro Are you saying that Bitcoin is not, in fact, intact?
I made no comment on whether bitcoin is intact or not. I only commented on EscapingProgress. I think you should have posted your question to that person.
EscapingProgress is excaping reality.
Beat it ya piece of shit, go find your next get rich quick without working scam. People here aren't buying your computer money.
Mad Mohel's puppy fund: 1Ao4h7R7XNpJCajnvaBpQZY1t6jubpcjYA
That's what they said about Pets.com when it dropped from 20-something to 14 (on it's way to 20 cents).
When the financial system is finally in ashes go find someone who wants your bitcoins.
Transaction malleability has been known about since 2011
No need to proactively fix that until there is an issue..
Oh, that's today!
FS must be "tied up" right now, LOL!!!
No need to proactively fix that until there is an issue..
Hey, it works for nationwide government website rollouts.
It's a feature. Well, actually it sort of is. It allows for multi-signature transactions where, for instance a child could not spend funds without a parents permission. Or a Trust Fund with approval of their appropriate lawyers, etc, etc.
Good luck with that. He's out with Hugh Hendry taking shots of cheap rum and avoiding mirrors.
Good luck with that. He's out with Hugh Hendry taking shots of cheap rum and avoiding mirrors.
lol...I read it as..."As the torch of culpability is rapidly handed off from exchange to exchange..."
Guess I need to get my eyes checked ;-)
Bitcoin as a store of value.
LMAO.
It's a store of value alright; looking more like a lemonade stand by the minute.
I own none, but this DOS attack looks to me like it will backfire, per this quote:
"This is a denial-of-service attack; whoever is doing this is not stealing coins, but is succeeding in preventing some transactions from confirming. It’s important to note that DoS attacks do not affect people’s bitcoin wallets or funds."
Unlike the bank confiscations in Cyprus, and Argentina, where people are assured their money is still there and then discover later they never recover it -- this situation, should it resolve properly and access be restored to people . . . it will strongly make a statement about the integrity of the storage/transport vehicle.
I make this point in all such threads. This is about capital controls and it's not about anything else. Bullish or Bearish doesn't matter. "Store of value" doesn't matter. What matters is it can defeat confiscation at the airport. Gold's storage of value is meaningless when it gets xrayed and grabbed at the airport. Cash would get grabbed, too.
Only bitcoin is immune to that and THAT is a very important thing.
In a SHTF scenario you are relying on someone at the other end of the deal being convinced that BitCoin has value.
FRNs are based on the US government being able to coerce the population to pay all the bills and the aforesaid government having the biggest stick.
I doubt BitCoin would do well in the SHTF scenario.
As regards metal, look at the amount of smuggling of gold that's happening in India. Some humans can find a way around just about anything another human can put in his way. Risk and reward come into play here, obviously.
But Cyprus was not and is not a SHTF scenario. People eat. People go to the hospital. Those are not true in SHTF, and in a proper SHTF scenario they never eat again and hospitals never exist again.
In the Cyprus capital controls scenario, which I very carefully specified, bitcoin is immune to airport detection. As for not taking your gold to the airport . . . that means you get on a plane with no money at all. Who was going to feed you at the destination? What was your life to be at the destination? Were you going to mooch?
If you're a Cypriot with bitcoins and you want to get out before it gets worse, you can do so. Without bitcoins, your ATM card won't work at the destination. Your funds are frozen. But with bitcoin you could presumably use the free airport wifi at the destination and access some local currency -- and you could do this, and actually eat food, while your gold was at the bottom of a lake in a country you may never be able to re-enter.
CrashisOptimistic IMO is right. The best and highest value of BTC is the ability to move your wealth around with practically no hindrance if you take some precautions.
"In a SHTF scenario you are relying on someone at the other end of the deal being convinced that BitCoin has value."
I think relying on the internet would be the bigger worry.
What is bitcoin's "counterparty risk"? The internet itself.
Grown ups don't take their gold to the airport; goofball. you leave it in a vault until you want to convert some of it into some kind of currency.
..or they store it at the bottom of the lake.
You'd think that you wouldn't have to say something so obvious, but no.
It already is backfiring, on a couple levels. One, this is a massive DoS attack -- meaning someone is investing time and resources (a lot of them) on something that has no direct payoff. The end result is hardened infrastructure (as has been the case from prior DoS attacks.) As an aside, the only motivations for doing this is either to undermine bitcoin, or to suppress its price so that it can be purchased cheaply. That this happened at the same time as a JPM slam peice is super suspicious to me.
The other level is that bitcoin is proving to be fairly anti-fragile -- no coins are lost and the protocol gets improved. The larger and bigger the attacks on bitcoin, the stronger it has become. If the primary motive was to undermine bitocin, they've failed over and over the past year.
Safe Haven... Just like gold was supposed to be...
Possibly the same fiat forces that target gold are now targeting bitcoin
Possible and probable
So I would not be surprised if the BIS governors have discussed Bitcoin in depth and decided to target it, line they target all substantial threats to their status quo ..... Gold being their mainstay.
They will regret
+ 10 BTC seek, nice explanation. I myself have only a light grasp of Bitcoin technology, but it appears to be robust.
"This is a denial-of-service attack; whoever is doing this is not stealing coins".
NOT YET
Not necessarily not yet.
The usage of denial of service attacks to manipulate prices for purposes of Bitcoin acquisition is fairly well established.
You could argue that Stolper's incessant Muppet rapings were not currency theft by GS (if you work at the SEC) but it certainly wouldn't pass the smell test around here.
Why is Bitcoin any different? (Other than relatively little guys getting a taste of what the big boys do, and deciding it's not really so bad after all... as long as they're the one's profiting by said manipulation/theft)
I agree. The early history of bitcoin exchanges pretty much established if there is any way to steal the coins, they will be stolen. While one powerful entity might play a long game and use an exploit for DoS and not theft, there are far more entities equally well funded that would happily take coin if they can. Thus one can be fairly certain this is being exploited for the only weakness it provides -- slower transaction confirmation.
Do not imply I suggested a DoS could/would steal coins. All I am stating is at some point, with some techincal or even non-technical mechanism, coins will be stolen.
And there lies the rub...what does stolen mean ? If a Bitcoin's purchasing power gets reduced by half overnight, that can be a form of 'stolen'
Don't think of a Bitcoin being stolen, as if it disappears from a wallet. There can be other ways. Can a Bitcoin get sucked into a virtual black hole and never get out ? You know that virtual world can be a mother fucker.
Yes, but apparently it's not immune to some 13-year old with a zombie-bot army. That doesn't inspire confidence.
Seems to me any complex encryption system that can be designed can be hacked. Even within a fiat banking system. The difference is, the full faith and credit of the Feds lawdogs and their guns can temper any threat to the currency of the realm, where BTC operators don't possess that kind of force.
Store of value implies that you are not concerned with temporary blips. The US$ is not questioned when exchanges have problems. BTC will be trading consistently >$1000 by Q2 2014. These issues will only increase resiliency,
You're right, what could go wrong?
Issues like these will only add to the doubt and hesitation.
Look dude, I realize you guys are pumping "a product" here and I do appreciate your one week old handle was created to push "the product" but I've been consistent on what it is and is not.
Right now, I wouldn't even use it for what I believe its most valuable feature is, namely, moving fiat from one location to another.
Its not money.
Please don't confuse the BitCoin "BeLIEvers" with facts and reality, they are as allergic to it as are the liberals. Both seem quite content to live happily in their self perpetuated fantasy lands, and IMO its not our place to disturb them out of thier 'dream' that is a process they have to go through all alone.....
IT geeks are very socialistic. And deluded.
They all swear to the open source movement, working for free and get payed nothing.
At the same time they all shit their pants when the god of outsourcing asks them to train the new recruit from India.
I've noticed that...and veering OT slightly...
I was talking to an IT guy today. Nice enough guy, a vet (for what its worth)...put his kids through college and one of them is in the molecular sciences...found a way to keep fruit from rotting too fast genetically (I can't say how, it will be litigated) but I came away thinking...what has your daughter done, that may destroy us all by this discovery?
She is a lib (as is commonly known, I call them progressives) and no doubt had helping all of humanity in her heart as her initial purpose...but now its down to money (her discovery) and she wants it (yes, its her discovery, legally it appears).
I can't help but feel, at the intersection of the legal, the humane, the ethical and the greed...there is going to be a gigantic train wreck.
What progressives avow publically, and what they do are completely different.
Absolute TRUTH there my firends
Farmers would make her rich in a heartbeat.
"Pope Benedict in 2006 vilified scientists who"modify the very grammar of life as planned and willed by God...To take God's place without being God, is insane arrogance, a risky and dangerous venture."
And she wants *gasp* money? Horror! she might buy gold! or sumpin' ; ) coughBTCcough
"And, for those so inclined, whole new dimensions of things to worry about are on offer. Genetically Engineered crops will be left in the dustbin of outdated frets, like an old food fad:"remember when we thought Bt corn was the end of the world?" Stewart Brand- Whole Earth Discipline (re synthetic biology)
Not WMDs in conjunction with insanity, not pandemics. Climate change DOES have the greatest potential to 100% destroy us all, along with 90% of the other species on Earth.
I agree nmewn, I feel there is going to be a gigantic train wreck. I swore off blogging about it and resigned to return to my haymaking tools, but with the Arctic sea ice situation and the continuing release of the IPCC AR5 (Working Groups 2, 3, and 4) in progress this year, I'm back in the fight at least until Paris 2015.
I must be a glutton for punishment; I quit the pm lab for the farm field, took on my Exwife the lawyer in family court, and now help sound alarm bells on Zerohedge about global warming! LOL
and speaking of food, here's a plan or 40
we now return to our regularly scheduled Bitcoin brawl...
The US$ deserves lots of criticism, but it doesn't swing 25% in value in a day.
Sometimes your brain just fills in....
Don't be too hard on yourself.
Culpability is probably closer, anyway.
just wait till the NSA starts to break BTC up...oh wait...
Yep, the NSA has been down in the bowels of bitcoin from Day One!
Just biding it's time...
You may have a very good point.
From the above article: "Somebody (or several somebodies) is taking advantage of the transaction malleability issue and relaying mutated versions of transactions."
And then this from another article I found:
"The integrity of Bitcoin depends on a hash function called SHA-256, which was designed by the NSA and published by the National Institute for Standards and Technology (NIST).
Is it hard to believe that could the intelligence community have a secret exploit for Bitcoin? While there is no evidence yet to support the speculation.
“If you assume that the NSA did something to SHA-256, which no outside researcher has detected, what you get is the ability, with credible and detectable action, they would be able to forge transactions. The really scary thing is somebody finds a way to find collisions in SHA-256 really fast without brute-forcing it or using lots of hardware and then they take control of the network.” Cryptography researcher Matthew D. Green of Johns Hopkins University said."
http://thehackernews.com/2013/09/NSA-backdoor-bitcoin-encryption-sha256-...
Wouldn't "forged transactions" and "mutated versions of transactions" be synonymous?
Wouldn't "forged transactions" and "mutated versions of transactions" be synonymous?
No.
The bitcoin network validates transactions in with local copies of the blockchain, and when enough peers all agree they have a copy of the transaction, it's deemed validated.
The mutated transactions aren't getting validated, because they don't match the valid transactions. The transaction ID is the same but the details aren't, so it basically ends up getting rejected. A genuine forged transaction would make it into the blockchain, e.g. wouldn't get rejected. That would be a much bigger deal.
SHA-256 isn't used to create transactions itself, but it's the regulating mechanism in mining blocks -- which are compilations of transactions that are ultimately placed in the blockchain (e.g. the bitocin ledger.) If you had a magic hack that let you backwards-compute a double SHA-256 hash (and that double part is pretty important here) it would in theory let you mine blocks faster than the current brute-force method. This means you could consistently be the first to have a valid block solution, and that would basically let you decide what transactions would be validated and let you "own" the blockchain, thus altering the ledger at will.
Thank you seek.
I appreciate the tutorial.
Always good to learn something new.
seek is one of the best instructors here at ZH re Bitcoin.
And if SHA-256 were broken, there are a lot tasier fish to catch with it than little ol' bitcoin (at least for now).
Ou la la la la la la!
NSA channeling Robin Williams: "Goooooooooooooood morning Bitcoinnam!"
Sorry to break in, but i've never laughed so hard in my life. OMG this is the funniest, ow, oh, I think I broke a rib.
Never underestimate the power of denial and an open forum.
Ok, gotta go. I have a date with Blythe to go ride winged horsey cats.
TschuS!
A problem they;ve known about since 2011? And he says that it can't be fixed overnight?
Seriously? Ok, can it be fixed in 3 fucking years?
I won't came anywhere close to dancing with glee, but will join several others in a great big, "I told ya so."
Damn shame that the origin of the attacks can't be traced...and jesus tapdancing christ please don't any of you pumpers say that it can be traced - because you've spent the last 2 fucking years telling us that it can't be. Oops, no vulnerability there.
Shame because it would be useful to know whether it's: mtgox splashing the shit over everyone while trying to recover losses and maybe even profit from this, or a government agency, or multiple governments' agencies, or "the mob" as some at coindesk have speculated, or....?
On the other hand, if this is the worst exploit a cartel or the legion of script kiddies could mount against Bitcoin, then its technological success is assured.
I'll be very curious if a high number of mutated transactions show up in any particular miner's blocks.
Real surprise is dogecoin!
Look! See! Crypto-currency market capitalization:
http://coinmarketcap.com/
In top five! Dogecoin graph only currency on rise!
So happy! So currency! Wow!
To the moon!
with regard to Bitcoin; "May the farce be with you, my son". I had to say it; the Devil made me do it.
I got your protocol right here.
Bitcoin - a flawless technology
edit: Fuck You Junk King
This is starting to look a lot like ObamaCare ;-)
Or O-Bonercare. Or O-Bonerdoesntgivearatsasscare.
Trapped in the ole matrix shopping cart when ones ass is on the line isn't the best place to be is it? ;-)
How long until Boner 'officially' announces that he's a socialist pig, I wonder?
Do we honestly have to wait to be 'officially' told something that we all ready know??? Maybe that is part of the prob in 'meriKa is everyone is waiting for the BIG Press Conference to announce [Fill in Topic] be fore we accept whatever as reality??? Not me I accept the the America I was 'schooled' on in the 70's & 80's is LONG dead and gone, so I figure out what I can't do and FOCUS on what I can do.
BTC differs radically from the ACA in a number of ways, e.g. - it's brilliant, interesting, successful to this point, has a future ... that said, I would have been unloading at $1,000 hand over virtual fist. It's obviously going to go tits-up.
At my age, finding anything female willing to go "tits up" would be well worth the $1000 USD.
RE
This is what pleases the Federal Reserve (b/c, for now, they "control" the market).
This is also what keep every FOMC member up at night.
Hacking could impact a digital currency based on zeros and ones? Who would have thought?
Bit by a bug and left with no coin.
Incredible aint it?
Its like the damned Bit-ATM ran out of cash at the same time as Mt.Gox decided to take a Winklevoss so Shatoshi & crew could scram out the backdoor...what are the odds?
Lemme check my non-virtual stack over here...yep, it still seems to be ninety nine point ninety nine percent fine, just like I left it. Hell, I don't even have it in an account or encrypted or need electricty or internet.
I'm just kinda eyeballin it though ;-)
At least you can eyeball your stack, I made the dreadful mistake of trying to show my PM's the nice springtime outdoors.
What a disaster that turned into, now I have to wait until the water temp gets warm enough for me to go snorkeling.
Even then I can't get deep enough to recover them, but they still glisten when the sun is just right and the algae blooms are not too high.
I guess the bitcoiners have to make sure they put their digital wallets in some sort of water proof sandwich bag huh?
DaddyO
I stamp the private key in non-corrosive sheet metal. Worked like a charm but I've since seemed to have misplaced it somewhere.
My bitcoins are still sitting there on the blockchain right where I left them. MtGox and any other fiat exchange can become insolvent and this won't effect my bitcoins.
So we have two things happening here. A massive DoS attack and fake transactions trying to hide in the noise of the DoS attack. Fun times indeed.
Definately as good as gold and silver coins. ;) People are that stupid, it's incredible.
But what about the geothermally propelled bitcoin algorithm number crunching machines in Iceland that are working 24/7 .
I can't bear to break the news to them...
Speaking of which, anybody know what the marginal cost of production is currently? Seems like at a certain price, production should cease.
No counterparty risk they said...
True. Only exchange risk.
Well if an exchange doesn't exchange your exchange I guess its not a problem. I mean it's not as I've you wanted that transaction to complete.
If I give you bitcoins to provide a good or service, and you don't provide the goods or service as specified, what is my recourse?
What is the definition of counter-party risk?
Bitcoin has no inherent counterparty risk. However, when you hand someone something you own because they promise to take care of it, you just introduced some.
Gold is no different, by the by.
By that definition, the USD has no counter-party risk.
Most gold transactions are either face-to-face or involve specific mechanisms to protect against counter party risk (Reg E for retail) and Bank Letters of Credit for commercial.
In the good old days before TBTF - licenses were yanked and fines were imposed for the sort of blatant disregard of reality or nuance, or outright fraudulent product pumping that the new kid is pushing (at least until one was well established in the industry - as Madoff clearly demonstrated).
USD has counterparty risk because another party controls the quantity. Bitcoin has no central bank.
My point is, we don't say that gold "has counterparty risk" merely because it can be stolen or misplaced.
That's pricing risk, not counter-party risk (unless you're an institution-sized player who can just lop off the ,000.00 and use USTs as Fedline currency), or an "investor" in USD accounts at financial institutions- since what a bank depositor actually has is a claim on a percentage share their bank's Mt. Eccles FedWallet (which is most certainly subject to unilateral quantity changes), but the latter type of "investor" is probably the same sort of "investor" who would park their Bitcoin wallet at a seductively "convenient" Bitcoin Bank/exchange.
With the current questions surrounding Mt Gox operations there may be overlapping custody risk and fiduciary risk issues depending the circumstances of an individual Bitcoin user, but at this point hard facts about the financial solvency and viability of Mt Gox are in short supply vs the excess of speculation.
For any currency, one can theoretically avoid counter-party risk by not engaging in a transaction. However, if there is a currency transaction between two parties there has to be counter-party risk (and if it's big enough- usually a banker peddling "insurance" for that risk).
Bitcoin requires a 3rd party known as "the internet". But as long as that is up and running nothing can stop you from sending or receiving funds to/from anyone.
Bear in mind that this is a temporary glitch. Individuals are trying to find the same weaknesses that existed on MFGox across the bitcoin ecosystem. This is the equivalent of taking a box of receipts to a store hoping that they will give you a refund. Most (hopefully) exchanges have been aware of the trans mal issues and are not vulnerable in the same way that the thieves at MFGox were. BTC has already rallied back to the previous levels. We'll see what happens next.
Serious question: how in the actual &$@% do you know that?
He doesn't know. He's either a lying shill or a retard.
How does he know what? How does he know that it's a temporary glitch?
Because the issue is well-known and there are already well-known solutions for it. Exchanges simply can't wait any longer to implement them.
with all due respect, yes, the glitch is known and has been speculated on well before this manifiestation,
BUT...if the solution was simple it would have already been implemented. Other solutions to exposed vulnerabilities have been implemented and much more quickly. In this instance the "known" cures might be worse than the ailment.
Did you just say the word glitch?
There was a time, in Central Planning Folklore 101 where this was an acceptable word, not anymore.
Now you're a razzzist ;-)
Viz Full Metal Joker: Howdy, Pilgrim. You can eat the Bitcoins out of my Shi-it.
First they hate you, rebel against you, and then they eat the bit coins out of your shit.
Have a bit-coin day!
Make today a Bit Coin day.
Bit Coin: for the distinguished douche nozzle.
Oh, and happy Valentine's Day and President's Day.
It's too bad that your boat sank and all your bitch coins are underwater.
I took all your soggy biaatch coins and now I'm rich, Biaatch!
I invested in scuba gear while y'all weren't looking. Ha hah haha ha!!!
The exchange IS the counterparty is this instance.
It is not acting as a central netting hub
Russia:
http://rt.com/news/biggest-ddos-us-cloudflare-557
Interesting and "believeable" that we are coming close to another Langley/Ft. Mead surprise courtesy of AT&T and Verizon's backbone
These guys have been attacking commercial banks right and left for the last year with increasing volume with the techniques outlined in this RT news clip you posted.
Thx
There was a wire report on FX from FT news about Russia clamping down on Bitcoin a few days back and now we get a DDoS attack that aimed at Bitcoin exchanges and other sources. For this scale of magnification it has to be a government. Russia screwed with Georgia (elections) with DDoS attacks in 2007. So, very possible it's a cyber warfare play rather than just some "group"
But of course. It's the trojan horse that potentially has lots of gifts.
Russia is smart to be shutting it down. That announcement and action by the Russian banks speaks plenty about the source.
It's probably Putin playing Minesweeper on his Russian-made smarthone causing "interferences"
Eastern Europe is filled with central command rooms of large botnets from all over the world.
The FED could rent, if the price is right, all this infrastructure and DDoS the bitcoin network.
And then blame it on Russian hackers.
Putin's doomsday computer
bu-bu-but tha bitcoynz has the invulnerablez!!!!
OH NOES
Bitcoin is a protocol, and is still working just fine. It's bad implementation code in the ecosystem around it that's causing issues.
That's like saying Fiat debt money system is a sound concept.
Just that the implementation might suck if is done by humans.
If the post office loses a package of precious metals in transit, does this imply precious metals are a bad investment?
But the layperson can use tracking numbers to solve the riddle of the lost package. Tell me, can the layperson solve the riddle of whatever ails bitcoin? I'm not being a wise ass, I'm asking a serious question and pointing out a significant difference between the two vehicles.
That's actually quite an apropos question, since it's the tracking numbers that are getting messed with in Bitcoin currently. The packages are still getting to their destination just fine, but someone's screwing with the tracking numbers enroute, making it more difficult to figure out where they are in transit. Annoying, but not a catastrophe by any means.
But to answer your question, yes: if you can type a tracking number into the UPS site, you can type a source or destination number into the blockchain.info site.
THAT is the exact analogy I thought of while walking my dog this morning, Saro. Cheers.
is that a valid comparison when the boxes are expected to only carry numbers, compared to boxes that actually contain things?
I think the comparison is invalid. The point of gold is in-person real-atoms savings, and that includes cutting out the post or wire transfers to ensure real atoms are attained without loss of purchase using other forms of money.
Bitcoin doesn't have something other than the delivery, it is the delivery method, nothing on the other end is being delivered, or ever would be. It's not meant to be.
hm, fair enough but be defended. It's not like implementations of network hardware or software have been bug-free & we manage to get by. Just don't bet too much knowing deep flaws are there (and not just in bitcoin).
I noticed that my BTC friends were a little crabby about that. I am lost in Windows 7 right now. My nine year old daughter brought me her computer and said "Dad, it's not working right". You really ought to see all of the installs she has made! I am not even sure I can unfuckulate that thing short of wiping the hard drive. This will take me all night. Gotta love crypto currency and children.
You should still back up EVERYTHING first.
That way you can go through everything for anything you might need, at leasure.
Not to take away from the point I think you were trying to make, just advice regarding data.
I have five comps running so I am not too worried. It's just amazing what kids will do.
In the words of many a woman after performing the walk of shame, "you can't unfuck someone", or in this case Windows 7.
"Transaction malleability has been known about since 2011. "
WTF that was 3 years ago. So now that it is bringing the exchanges down you finally decide to implement fixes?