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195K Bitcoin Transaction
First time accepted submitter saidi writes "The Washington Post reports that yesterday a truly massive Bitcoin transaction occurred, from the article: 'In this particular transaction, bitcoins from 15 different Bitcoin addresses were consolidated and sent to address 12sENwECeRSmTeDwyLNqwh47JistZqFmW8. The size of the transaction? 194,993 bitcoins. Given that one bitcoin is worth around $800 right now, the transaction is valued at more than $150 million.'"
A researcher did a bit of digging, and it appears that this was the Bitstamp exchange moving their balance around (business appears brisk).
This is an excellent example of traffic analysis and how you can leak your identity based just on the nature of the transaction. It makes me wonder why bitcoin users do not routinely engage in 1:1 transactions simply to frustrate traffic analysis.
#fuckbeta #iamslashdot #dicemustdie
To be honest, Slashdot and http://phys.org/ are by far, my favorite websites for interesting stories news.
However, I am getting tired of fucking bitcoin stories. Enough is enough.
You don't have to read the summary. You don't have to click on the links. You don't have to post annoying comments. In fact, I think slashdot will be better if you do stop "reading" it.
But, yeah, I'll give you that there are way too many bitcoin stories...
No, I cannot allow that. Even if you leave Slashdot for whatever shitty site that is, I will come to your house, put a gun to your head, and force you to read Bitcoin stories much like Unknown Lamer does here. You must read them. This is not an option. If you had a choice, there would be some sort of summary on the front page with a link instead of how it is now where every bitcoin story locks your browser and won't let you navigate away unless you post.
This is simply good stewardship. One of the largest exchanges (actually not, Bitstamp, rather another ahem Magic: The Gathering Online Exchange site) had a rush of buy orders, so they decided to redeem an address they kept in cold, offline storage to meet demand.
This is a good thing(tm), as it means that there isn't any fractional deposit factoring going on.
If you create an account, go to options under your username after logging in, you can set terms to ignore and those stories should not appear on your front page. Setting a term Bitcoin should stop stories about bitcoin from entering your front page.
If you insist on posting anonymously, then simply log out after seeing what stories interest you and opening them in another tab.
I'm personally at a loss to why people think so highly of bitcoin. There are about 80 or so other virtual currency exchanges out there and it seems that none of them are stable in the sense of real currencies. I understand the concept of it being like a credit card with the limitations of a wallet (Ie if you lose your wallet, you lose only the funds in it where if you lose your credit card, it can be charged until it is shut off), but beyond that, I just don't get it.
This isn't a bank but an exchange, which I presume buys bitcoins with real currency. Thus they may build up large amounts of bitcoins that they sell for cash when they think the market timing is right. So they would own those bitcoins, since they bought them with money. In other words, that is their own giant private wallet and someone noticed the bitcoins (a lot of them) had been moved around or consolidated in some way.
Better known as 318230.
Why are people trusting their coins to a bank?
Well, here are the reasons that we have to keep national currencies in the bank:
1) Because it's hard to guard your cash all day and all night.
2) Because the bank pays you interest.
3) Because the bank gives you the ability to send and receive money using checks, transfers, money orders, cards.
All these reasons (except #2) are valid in case of BTC. The more backups of your wallet you make, the more likely it is that one of them gets exposed to a thief. The fewer backups you make, the more likely it is that you will lose your wallet forever. A bank does not keep your money in a wallet, though they have deposit boxes for other items. If you deposit your BTC into an account, the record states that the bank owes you so many BTC. You have a copy of all transfers of that money, in or out. Loss of wallet is immaterial. Theft of wallet is immaterial. If the paper says you have 10 BTC in your account, that's what you will get. If someone sends you 20 BTC, you do not need to fiddle with blockchain and confirmations - as soon as your bank says you have the money, you have the money. The bank isolates the customer from the technicalities of running BTC clients. Add credit cards and checkbooks, and you can pay with BTC just as you pay with USD or GBP. Credit cards will be swept instantly (and not in 15 minutes.) The latter is, actually, very important because the raw BTC is ill-suited for small, numerous transactions that have to complete within seconds.
How do you steal cash that disappears when held too close to a match?
I've poo-pooed Bitcoin before. If it's now at the point where there are $150 million transactions, that's significant. I sure hope the operators of that exchange don't disappear with the money, get hacked, or any of the other nastiness that seems to happen every couple of weeks. A $150 million heist would be a big deal, and damn few internet-connected systems are secure enough to thwart even moderately skilled crackers. For example, a certain national agency I'm familiar with that does cyber-security training is wide open to SQL injection and other attacks. I sure hope these bitcoin exchanges have better security than the agencies that set security standards have. If not, somebody's going to steal $150 million in bitcoins any day now, and that'll be a big deal.
How do you streal something that disappears after a magnet is passed over it?
Are we talking about Bitcoins, or music?
I've poo-pooed Bitcoin before.
I'll keep poo-pooing it.
How can anyone set prices in bitcoins? You might offer to sell some good or service for 1 bitcoin. Then, a week later, your potential customers are laughing at you saying "one bitcoin for THAT? WOW talk about over priced, thats ridiculous!" and then they will buy from someone else.
Bitcoins simply cannot be used as a medium of exchange for goods and services.
If you look at how much a good or service costs in bitcoins you are probably and reasonably going to make a mental conversion into 'real' currency. Each week those goods and services effectively cost more and more.
The seller has a choice; post a stable price in bitcoins or post a (constantly adjusted) realistic price in bitcoins.
Ie in order to sell things in bitcoins and maintain a realistic price you have to keep charging less and less of a bitcoin. If you post a price in bitcoins and don't continually adjust it downward anyone who wants to buy and doesn't already have 'old' bitcoins is going to look at how much they now have to spend on bitcoins just to pay for your goods/services and, probably, think twice about it and probably go somewhere else.
How big a proportion of people who use bitcoins mined them themselves? How big a proportion got those bitcoins through selling goods/services for them? How big a proportion bought the bitcoins with 'real' currency? My guess is that most bitcoin users pay for them with another currency and these people are not going to use them to buy and sell; they are going to hoard them.
Therefore, bitcoins are useless for anything other than speculation which was not the original intention of the system; it was intended to be used to buy and sell services. Therefore bitcoins are now useless for their intended purpose.
WTF happened here? Has the bitcoin been deliberately sabotaged? Or is this just an unintended consequence? Do we need a new virtual currency that won't devolve into this and stay useful?
In the free world the media isn't government run; the government is media run.
Financial markets like MtGox could easily maintain fractional reserves because many account-holders don't withdraw their entire balance of bitcoins every night. There is plenty of opportunity for the exchange to do whatever they want with a portion of the deposits. In essence "mtgox bitcoins" are already a fiat currency that are payable in real bitcoins upon request. They just haven't started paying out at less than 1 bitcoin per mtgox bitcoin yet, like half of the other bitcoin exchanges/banks/whatever have when they got hacked.
Thats kind of what I mean; you can't set prices in bitcoins. That impacts the bitcoins utility as a practical unit of currency.
In the free world the media isn't government run; the government is media run.
I know what would happen to my bank account, but would that have thrown the entire system into chaos if I cashed in that many at once?
There is a liquidity problem with BTC. You probably would have great trouble trying to cash in that many, AND get actual US dollars for them.
Sure... you could switch from a BTC balance to a USD balance at Mtgox... do you think they will be sending you your check anytime soon?
It is also quite obviously in the middle of a massive bubble. If you look at the movement of the price, the shape of the curve, it is moving just like any other commodity that is being thinly traded and having massive speculation. That sort of thing might be good if you like to play the market and try to make a quick buck, but it's really really bad for anything trying to be a currency. It also is almost inevitably followed by a crash. Hence why bubbles are called that because they pop.
I suppose it is there radically possible that Bitcoin is some kind of exception and its value will continue to rise forever, but it would be the first time that is been true for anything that moved like this. Massive, volatile price changes are not the sort of thing that signal real growth, but rather a speculation bubble that is doomed to collapse sooner or later.
Premise #1 relies on a bank that is better at security than you are a target. Since these outfits are 0% legislated at this point, I wouldn't put credence on their assurance that your money is safe there. Remeber, if one bank gets ripped off and stolen, there is literally nothing that they can do to get your money back. Hope you're enjoying the ride.
Bye!
I don't disagree, it sure looks like a major bubble, so on that point I still think it's very risky to get involved in. Where my perception has changed is that it looked like a toy, something tin-foil-hat people play with. I laughed it off. It seems it's now big enough that one shouldn't laugh it off. As an example, with over $150 million in a single exchange, an unlicensed bank, it probably makes sense to seriously look at appropriate consumer protections.
Remeber, if one bank gets ripped off and stolen, there is literally nothing that they can do to get your money back. Hope you're enjoying the ride.
I personally don't own BTC, and consequently don't store them in banks. But as the OP indicates, quite a few people do both. I believe they will be eventually separated from their money - in part because these "banks" are not regulated, and in part because extremely fast deflation of BTC (currently caused by speculation) makes BTC useless as a stable coin. IMO BTC should be compared to tulip bulbs.
Right, which is what I'm getting at; the bitcoin is useless as a 'coin' that you can buy and sell goods and services for. Its only use at the moment is speculation.
You can't set prices of goods and services in terms of 'thinly traded commodities subject to massive speculation'.
You can't put bit coin price tags on things, this would be completely impossible. Yet I see this often online.
In the free world the media isn't government run; the government is media run.
To the average consumer who isn't necessarily aware of being tracked or of the fees paid to payment processors, it probably seems just like a credit card payment. To the person or business on the other end of the transaction, however, the two couldn't be more different. There's no approval process to accept bitcoin, there's no third party to charge processing fees and there are no disputed charges. In a lot of ways, it is more like cash.
Beyond all of that, bitcoin is more interesting as a demonstration of what is possible and an indicator what will soon be possible. It's shown that individuals can cooperate for their own benefit at a global scale, without the need for government intervention. Maybe it's naive to expect that technology can effect substantial change in global politics, but you can't blame people for being excited about the potential to reduce the power of nationalist governments that wage wars and build prisons, and reduce the harm done by stupid, wasteful and corrupt politicians.
Use of the words "good", "bad" or "evil" is almost invariably the result of oversimplification.
We are living the libertarian dream with Bitcoin: a bunch of exchanges, none of them insured.
Libertarians feels that government regulation is unnecessary, but what recourse do those depositors have when one of these exchanges just disappears with their money? None.
I won't be using Bitcoin, no matter how lucrative, until a government agency or large bank insures deposits. It's just not worth the risk.
Frankly, I can't see any sovereign ever backing Bitcoin while they have their own currency, so I don't know how Bitcoin ever becomes a reliable, universal currency.
Try pricing in Zimbabwean dollars - you'll see the same problem.
Well, you won't anymore because the Zimbabwe dollars were discontinued and the country now uses US dollars as its currency because price volatility made continued use of Zimbabwe dollars as a currency effectively impossible.
Now Zimbabwe had inflation not deflation, but the issue of volatility is the same: it makes things ultimately unworkable if it gets too high (even if it moves in a predictable way). When prices change significantly* by the minute and transactions take several minutes to complete then trouble may set in.
* significantly here means, say, double digit percentage change in price every minute. Bit coin is a long way from that currently, but is headed in that direction.
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