Fraud, Not Hackers, Took Most of Mt. Gox's Missing Bitcoins

← Back to Stories (view on slashdot.org)

Fraud, Not Hackers, Took Most of Mt. Gox's Missing Bitcoins

Posted by timothy on Thursday January 1, 2015 @10:03AM from the shocked-simply-shocked dept.

itwbennett writes Nearly all of the roughly $370 million in bitcoin that disappeared in the February 2014 collapse of Mt. Gox probably vanished due to fraudulent transactions, with only 1 percent taken by yet-to-be-identified hackers, according to a report in Japan's Yomiuri Shimbun newspaper, citing sources close to a Tokyo police probe. The disclosure follows months of investigations by police and others into the tangled mess surrounding the disappearance of the 650,000 bit coins.

108 comments

Min score:

Reason:

Sort:

Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:10 · Score: 1, Interesting

$370 million is subjective. 650,000 inherently worthless pieces of information went missing. Nobody should have lost any money unless you were dumb enough to buy Bitcoins.
1. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:15 · Score: 0
  
  DING DING DING!!!
  Give the man a prize.
  This is why I'm homeless. Can't lose it if you ain't got it.
  My life you say? Worthless as well!
2. Re:Bitcoin != Coins by wonkey_monkey · 2015-01-01 10:22 · Score: 4, Insightful
  
  What do you think those funny little rectangles of material we all carry around with us all the time to exchange for goods and services are inherently worth?
  There's nothing subjective about the fact that you could, as some particular time not specified by the summary, exchange those 650,000 bitcoins (not "bit coins" as the summary would have it) for $370m.
  
  Nobody should have lost any money unless you were dumb enough to buy Bitcoins.
  Yeah, yeah, we're all bitter about not getting in on the ground floor too. Let it go.
  
  --
  systemd is Roko's Basilisk.
3. Re:Bitcoin != Coins by hey! · 2015-01-01 10:26 · Score: 1
  
  $370 million is subjective. 650,000 inherently worthless pieces of information went missing.
  "Inherently worthless" is the salient feature of money. When you trade things of intrinsic value you are bartering. It's only the fact that you were taught to value "dollars" without question that makes you think "$370 million" has any intrinsic value.
  
  --
  Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
4. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:35 · Score: 3, Insightful
  
  With bitcoin, the only thing you are trading is the knowledge that somebody wasted a shitload of electricity.
5. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:39 · Score: 5, Insightful
  
  Yeah, yeah, we're all bitter about not getting in on the ground floor too. Let it go.
  The most common comment on stock trading forums discussing speculative stocks. And bitcoin has so far behaved very similar to speculative and gamed stock trading.
6. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:44 · Score: 1, Insightful
  
  What do you think those funny little rectangles of material we all carry around with us all the time to exchange for goods and services are inherently worth?
  They are worth the face value because they ARE money. If I had gold in my pocket you may feel its wroth more however its useless if nobody want it and people stop caring about its rarity and scientific values. Cash IS money because my government has decreed it to be so. Unless you are a libertarian that you should realise what the government says goes, we are not savage beasts living in the wild trading sticks are rocks for goods and services.
7. Re: Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:55 · Score: 1
  
  Which is more than you are trading with cash.
  Even trading gold is nothing more than trading the energy consumed in mining it.
8. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:55 · Score: 0
  
  Nobody should have lost any money unless you were dumb enough to buy Bitcoins.
  I see your memory faded faster than the retirement accounts that were fucking liquidated from the financial meltdown in 2008, which involved exactly zero digital currency.
  Hate to break it to you, but every damn currency is a gamble these days. You act like the USD is rock-solid, or the mechanisms behind it.
  I'm guessing you've also never heard of the stock market either. Or the "stability" that precious metals have shown in recent times.
  Wake up, and consider yourself lucky if you've managed to keep your invested wealth to this point. Let's hope the financial elite don't fuck it up. Again.
9. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 10:58 · Score: 0
  
  they are at least worth the material they are made of.
  But how much material worth do 22 GB of data have?
10. Re:Bitcoin != Coins by Kjella · 2015-01-01 10:58 · Score: 4, Insightful
  
  There's nothing subjective about the fact that you could, as some particular time not specified by the summary, exchange those 650,000 bitcoins (not "bit coins" as the summary would have it) for $370m.
  No, there was never such a time. When MtGox collapsed there was less than 13 million bitcoins total, most of which is being hoarded. Looking at the exchange trade volume there's maybe $5-10 million dollar daily liquidity. In order to sell out without the market crashing you probably couldn't sell more than 10% of that so it'd take years to cash out. And that's assuming you don't overdo it and spook the herd so they all cash out too.
  
  --
  Live today, because you never know what tomorrow brings
11. Re:Bitcoin != Coins by Mister+Transistor · 2015-01-01 10:59 · Score: 1
  
  Is that you, Mike?
  
  --
  -- You are in a maze of little, twisty passages, all different... --
12. Re:Bitcoin != Coins by hey! · 2015-01-01 11:11 · Score: 2, Informative
  
  With bitcoin, the only thing you are trading is the knowledge that somebody wasted a shitload of electricity.
  The technical term would be 'seigniorage'.
  
  --
  Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
13. Re:Bitcoin != Coins by Drethon · 2015-01-01 11:16 · Score: 1
  
  22 GB of data that could be replicated?
14. Re:Bitcoin != Coins by rubycodez · 2015-01-01 11:30 · Score: 2
  
  the proper answer is that they are worth whatever you can get for them. Aluminum was once a precious metal worth more than gold.
15. Re: Bitcoin != Coins by lucm · 2015-01-01 11:34 · Score: 3, Funny
  
  trading gold is nothing more than trading the energy consumed in mining it.
  Gold comes from mines? I always believed it came from pawn shops and elderly relatives.
  
  --
  lucm, indeed.
16. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 11:35 · Score: 0
  
  No, there was never such a time. When MtGox collapsed there was less than 13 million bitcoins total, most of which is being hoarded. Looking at the exchange trade volume there's maybe $5-10 million dollar daily liquidity. In order to sell out without the market crashing you probably couldn't sell more than 10% of that so it'd take years to cash out. And that's assuming you don't overdo it and spook the herd so they all cash out too.
  From the analysis I read, the MtGox fraud was responsible for the run up in Bitcoins at that time.
17. Re:Bitcoin != Coins by BitcoinBenny · 2015-01-01 11:47 · Score: 0
  
  And the fact that the "shitload of electricity" secures a peer-to-peer trust network with a 4 billion dollar market cap capable of doing trusted transfer between parties on the Internet in a provably verifiable way that can't be counterfeited, intercepted, or modified. When did the Luddites completely take over Slashdot, news for nerds indeed.
18. Re:Bitcoin != Coins by tompaulco · 2015-01-01 11:48 · Score: 2
  
  $370 million is subjective. 650,000 inherently worthless pieces of information went missing.
  One of the principals of economy is that everything is worth what somebody is willing to give you for it. The 650,000 bitcoins were worth $370 million because somebody would have been willing to give that much money for them. Of course they are inherently worthless, just like every other piece of matter or information or string of bits. Nothing has intrinsic worth. It only has the worth of what someone is willing to give you in trade for it.
  
  --
  If you are not allowed to question your government then the government has answered your question.
19. Re: Bitcoin != Coins by dk20 · 2015-01-01 12:00 · Score: 1
  
  "Cash" is backed by the government that printed it.
  Bitcoin is backed by?
20. Re: Bitcoin != Coins by Anonymous Coward · 2015-01-01 12:08 · Score: 0
  
  If that were the case, ores which were harder to collect than gold would be worth more.
21. Re:Bitcoin != Coins by bloodhawk · 2015-01-01 12:10 · Score: 1
  
  Nobody should have lost any money unless you were dumb enough to buy Bitcoins.
  I see your memory faded faster than the retirement accounts that were fucking liquidated from the financial meltdown in 2008, which involved exactly zero digital currency.
  HUH? I think citation is required for such a bold statement.
22. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 12:22 · Score: 0
  
  I'm laughing at you. I saw what was going to happen, so got in on the ground floor, cashed out at around $900/btc with about 100 coins, and put the money to good use helping a friend start a small business, and fortifying a stack of gold bullion coins. Yup, I am clearly a moron, and your shit is worth more than gold.
23. Re:Bitcoin != Coins by murdocj · 2015-01-01 12:29 · Score: 3, Insightful
  
  Yeah, yeah, we're all bitter about not getting in on the ground floor too. Let it go.
  The most common comment on stock trading forums discussing speculative stocks. And bitcoin has so far behaved very similar to speculative and gamed stock trading.
  Wish I could mod the parent up. Exactly right.
24. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 12:30 · Score: 0
  
  HAHAHAH bitter? Fuck off! I'm laughing my ass off at you pack of morons that actually thought Bitcoin was worth more than the shit I'm about to take.
  At least my shit can be used to fertilize something.
  I'm guessing you were one of the lucky ones who escaped with minimal loss from the financial fuckups that nearly broke the USD in half a few years ago.
  That's sad. It would have made that bullshit spewing from your mouth a less effective fertilizer as you live under the stupid illusion that your investments are somehow magically more stable.
  Wise up dumbass. They aren't. You've been lucky. Nothing more.
25. Re: Bitcoin != Coins by jhantin · 2015-01-01 12:31 · Score: 2
  
  trading gold is nothing more than trading the energy consumed in mining it.
  Gold comes from mines? I always believed it came from pawn shops and elderly relatives.
  Well, the generation of that gold probably occurred in a process even more energy intensive than bitcoin mining, such as a very large star going out with a bang. After that it's just been transferred around.
  
  --
  ...when you're writing a game...tweak the difficulty of "Easy" to something [your mother] can cope with. -- onion2k
26. Re: Bitcoin != Coins by Patent+Lover · 2015-01-01 12:37 · Score: 1
  
  So if somebody steals your cash the government reimburses you?
27. Re: Bitcoin != Coins by Anonymous Coward · 2015-01-01 12:47 · Score: 0
  
  And if/when their currency collapses that backing is worth zilch..
28. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 12:55 · Score: 0
  
  The USD didn't nearly break a few years back. The US government could have just bought out the underlying bad assets to keep that from happening. In fact, that's what they should have done as it would have been far less expensive than the other options on the table.
  Bottom line is that it was mostly morons that thought it was going to happen. There was still plenty of stuff that one could buy with USD and the US economy was still producing, albeit at a lowered rate. The main problem was credit, not the denomination with which payments and transactions were being made.
  Before you open you're mouth, you ought to consider what shit it is that's coming out and keep it shut.
29. Re: Bitcoin != Coins by Anonymous Coward · 2015-01-01 12:57 · Score: 0
  
  Cash hasn't been backed by anything for at least 40 years.
30. Re:Bitcoin != Coins by Immerman · 2015-01-01 13:23 · Score: 1
  
  Actually, it's generally accepted that things like oxygen and water have inherent worth - it's just that most such things exit in such quantity that they have very little *economic* worth - a largely unrelated concept.
  
  --
  --- Most topics have many sides worth arguing, allow me to take one opposite you.
31. Re:Bitcoin != Coins by dissy · 2015-01-01 13:28 · Score: 1
  
  With bitcoin, the only thing you are trading is the knowledge that somebody wasted a shitload of electricity.
  So bitcoin is bad because the metal presses that stamp out coins and the printing presses and cutters that make bills all run on magical unicorn farts instead of electricity?
32. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 13:30 · Score: 0
  
  You are as full of shit as you are carbs frankly. The only people who made money out of Bitcoin are scammers.
33. Re: Bitcoin != Coins by QilessQi · 2015-01-01 13:35 · Score: 1
  
  If the cash stolen is in an FDIC account, then yes, it does.
  
  --
  Koans and fables for the software engineer
34. Re:Bitcoin != Coins by umdesch4 · 2015-01-01 13:40 · Score: 1
  
  Doesn't matter to me what you think really, but I just wanted to mention that all I did was notice an article here on slashdot about bitcoin when it was first launching, said to myself "huh, this looks like an interesting concept", grabbed the client, mined a couple blocks of 50 coins in a matter of days with a mediocre video card, then turned it off and forgot about it. When the price skyrocketted, I knew it wasn't sustainable, and this neat little experiment had gone too far, so I sold most of them at that point, on an exchange. What part of that was me being a scammer?
35. Re: Bitcoin != Coins by dk20 · 2015-01-01 14:04 · Score: 1
  
  Then care to explain why it is not worth zero?
  Dont forget to go to work tomorrow so you can get paid in yuor "worthless" currency... Later you an use it to get a coffee and groceries..
36. Re:Bitcoin != Coins by Locando · 2015-01-01 15:36 · Score: 1
  
  The 650,000 bitcoins were worth $370 million because somebody would have been willing to give that much money for them.
  We don't know that. In fact, I would consider it highly likely that if someone tried to unload 650,000 bitcoins at once, the value of the bitcoin would quickly drop enough so that those 650,000 wouldn't be worth $370m anymore.
37. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-01 15:58 · Score: 0
  
  Care to post your bitcoin addy to back up your claim? When mining via GPU code was released it was actually rather hard to get a full block of coins. Either you were incredibly lucky or full of it.
38. Re: Bitcoin != Coins by mysidia · 2015-01-01 16:03 · Score: 1
  
  FDIC does not insure or otherwise offer any protections or guarantees against fraud or theft. FDIC only protects against insolvency by your bank not consisting of any fraud, theft, or other regulatory breaches.
39. Re:Bitcoin != Coins by witherstaff · 2015-01-01 16:08 · Score: 1
  
  Bitcoin has been one of the hot button items on here for awhile and I'm not sure why. The blockchain is a very interesting technological creation. The creation of a peer to peer payment system world wide that has no central authority is also neat. The ability for anyone online to give and receive payments, from fractions of a cent to significant amounts, is also pretty cool. The 300+ million in venture funding for bitcoin related projects reminds me of the early dotcom days.
40. Re:Bitcoin != Coins by umdesch4 · 2015-01-01 16:14 · Score: 1
  
  Ok, maybe I'm mis-remembering, and the client didn't tap into my video card back then, since now that you mention it, I didn't check out CGminer until about a year later. But looking at my wallet, I can see that it was July 2010, and I got my blocks on July 13th and 15th. Either way, the point is that I was lucky enough to check this thing out when it first started, and for once, simply being a curious geek paid off.
41. Re:Bitcoin != Coins by Noah+Haders · 2015-01-01 16:34 · Score: 1
  
  to the best I could determine seigniorage is the cost of making money, eg metals, printing presses, etc. There were some historical uses but those don't work any more.
42. Re: Bitcoin != Coins by Mr.+Shotgun · 2015-01-01 20:50 · Score: 1
  
  Gold comes from mines? I always believed it came from pawn shops and elderly relatives.
  I thought it came from Fox news...damn you Gretchen Carlson! You damn minx, you shall not fool me again!
  
  --
  Of all tyrannies, a tyranny sincerely exercised for the (supposed) good of its victims may be the most oppressive
43. Re:Bitcoin != Coins by delt0r · 2015-01-01 23:34 · Score: 2
  
  You are trying to have a rational discussion with a bitcoin fanboy. It is like talking to a HFT proponent about the benefits of increased liquidity in the market via millisecond trades of already liquid stock.
  
  Don't get me wrong, I am sure there are plenty of people dealing with bitcoin for what it is. A speculate "stock" with limited daily volume. But they don't go round ranting about it much.
  
  --
  If information wants to be free, why does my internet connection cost so much?
44. Re: Bitcoin != Coins by delt0r · 2015-01-01 23:35 · Score: 1
  
  I currently live in Switzerland. I thought it all came from the Nazis :D.
  
  Boom Godwind! And i win internets for the day.
  
  --
  If information wants to be free, why does my internet connection cost so much?
45. Re:Bitcoin != Coins by delt0r · 2015-01-01 23:38 · Score: 1
  
  You can in fact design the whole thing in a way that doesn't use a shitload of electricity for absolutely no good reason.
  
  --
  If information wants to be free, why does my internet connection cost so much?
46. Re:Bitcoin != Coins by Ginger+Unicorn · 2015-01-01 23:44 · Score: 1
  
  During these "bitcoin is a scam" arguments, no one ever seems talks about using bitcoin for what it was designed. As an alternative medium of exchange. I would never keep money in bitcoin, because it's chaotic. I never keep money in my paypal account either, but that's not what it's for - it's just a very useful tool for buying things in certain circumstances.
  
  --
  (1.21 gigawatts) / (88 miles per hour) = 30 757 874 newtons
47. Re:Bitcoin != Coins by delt0r · 2015-01-01 23:51 · Score: 1
  
  I would love to have a system (like bitcoin) that worked properly, but for something to be a useful medium of exchange, it needs to have more price stability than bitcoin. It is hoarded and that just stops it being all that useful as a currency.
  
  --
  If information wants to be free, why does my internet connection cost so much?
48. Re: Bitcoin != Coins by Anonymous Coward · 2015-01-01 23:51 · Score: 0
  
  Then care to explain why it is not worth zero?
  Dont forget to go to work tomorrow so you can get paid in yuor "worthless" currency... Later you an use it to get a coffee and groceries..
  Because, just like with bitcoins, lots of people believe it's worth something and will trade goods or services for it. It's the exact same mechanism that gives it value.
49. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-02 00:50 · Score: 0
  
  You can in fact design the whole thing in a way that doesn't use a shitload of electricity for absolutely no good reason.
  Unless you can explain how I call BS. Most likely you've missed something.
50. Re: Bitcoin != Coins by QilessQi · 2015-01-02 01:04 · Score: 1
  
  Interesting, I did not know that the FDIC did not cover theft from the bank (electronic or otherwise), since the main point would seem to be to instill consumer confidence in putting their money in banks in the first place. Thanks!
  
  --
  Koans and fables for the software engineer
51. Re:Bitcoin != Coins by BitcoinBenny · 2015-01-02 02:51 · Score: 1
  
  Yeah. Please explain how in fact you can do this. The reality is that any scheme that uses a different security algorithm has different characteristics. Proof-of-work wasn't chosen at a whim, but as a technically sound basis on which to build a crypto-currency. There are other work schemes, but none of them have the proven track record of plain old Bitcoin.
  Also, shitloads of electricity is very relative. How much should we spend on a global payment network that no one entity controls? In my view of the world its probably worth more than another boat load of fighter jets, or a few more nuclear warheads.
52. Re:Bitcoin != Coins by delt0r · 2015-01-02 03:07 · Score: 1
  
  There are in fact some schemes that copy a lot of bitcoin and get rid of the wasted work problem, there are a few proposals in the literature as well. These changes just plug in to a bitcoin like system.
  
  If your an economist you don't like doing things without utility. Artificially restricting supply of something does not require that much wasted effort. Hell even the human working hours wasted on designing the ASIC miners would have been better used to do something else.
  
  --
  If information wants to be free, why does my internet connection cost so much?
53. Re:Bitcoin != Coins by TeknoHog · 2015-01-02 03:42 · Score: 1
  
  Public/open GPU miners only came out around September or October 2010. The blocks you mined in July were easily done on a good CPU.
  
  --
  Escher was the first MC and Giger invented the HR department.
54. Re: Bitcoin != Coins by X.25 · 2015-01-02 06:45 · Score: 1
  
  "Cash" is backed by the government that printed it.
  I really don't know whether I should laugh or cry.
55. Re: Bitcoin != Coins by mysidia · 2015-01-02 08:44 · Score: 1
  
  since the main point would seem to be to instill consumer confidence in putting their money in banks in the first place
  Other issues are addressed by federal regulations and required rules that banks need to adhere to and routine auditing that banks have to undergo in order to protect against fraud/theft. There are minimum dollar amounts in capital required to be chartered as a bank, and there are additional private insurance protections banks are essentially required to take out, so banks have to have some coverage against fraud/theft to be allowed to operate. It's just that those protections are not backed up by the full faith and credit of the US government.
  Still... plenty of people buy homes and take out Homeowner's insurance policies or Auto insurance policies, even though the government does not guarantee the payout for these policies in the event of a claim coupled with insolvency by your Home/Auto insurer.
  FDIC largely insures deposits against honest business failure, as in fractional reserve issues -- such as a run on the bank; anything else is up to a bank's private insurers.
56. Re:Bitcoin != Coins by tompaulco · 2015-01-02 09:17 · Score: 1
  
  Yup, and the same thing would happen if you tried to sell that much value in other lower volume currencies. However, that is how we value things. We consider the spot price and don't consider slippage.
  
  --
  If you are not allowed to question your government then the government has answered your question.
57. Re:Bitcoin != Coins by DanielRavenNest · 2015-01-02 09:26 · Score: 1
  
  > "Inherently worthless" is the salient feature of money. When you trade things of intrinsic value you are bartering.
  They are not disjoint sets. Money was whatever commodity had the most acceptability and was easiest to trade. Normally that happened to a commodity with features like durability, scarcity, divisibility, etc. The US dollar is backed almost entirely by debt, so it is not true to say it is inherently worthless. Those debts (Treasury bonds, mortgage-backed securities, and bank loans) have value because they pay interest, and you can trade a pile of dollars for any of those debts if you want to hold them directly. Paper money and coin are just convenient size trading units. A home mortgage or Treasury bond are inconvenient for day-to-day purchases.
58. Re: Bitcoin != Coins by lucm · 2015-01-02 12:45 · Score: 1
  
  It is interesting that Switzerland did all they could to protect the secrecy of the accounts of war criminals and dictators, but did not think twice before sharing information about US customers with the IRS.
  Swiss banking secrecy and swiss cheese now have many things in common (they stink, they have holes, nobody cares about it, etc).
  
  --
  lucm, indeed.
59. Re:Bitcoin != Coins by markass530 · 2015-01-02 19:05 · Score: 1
  
  It's been pretty steady for a while now
60. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-02 20:51 · Score: 0
  
  It's been pretty steady for a while now
  We have different definitions of "pretty steady".. Even just looking at last 60 days there is a 40% difference from lowest to highest value. To put money into that is not pretty steady, it is highly speculative.
61. Re: Bitcoin != Coins by dk20 · 2015-01-03 01:26 · Score: 1
  
  Try this.
  Go to say a gas station, convenience store, etc and offer to pay by "bitcoin" and see what they do (laugh or cry).
  I will do the same with "cash" which MUST be accepted at those stores and walk away with my product.
  One says "legal tender" and therefore is considered a legally mandated form of payment, the other is not.
62. Re: Bitcoin != Coins by Anonymous Coward · 2015-01-03 05:05 · Score: 0
  
  I'm sorry, but I disagree. A lot of people care about the cheeses of Switzerland.
63. Re:Bitcoin != Coins by eric_harris_76 · 2015-01-03 05:34 · Score: 1
  
  Value is subjective. If it weren't nobody would trade anything for anything, because everyone would value everything exactly the same as everyone else did.
  
  --
  There's no time like the present. Well, the past used to be.
64. Re:Bitcoin != Coins by eric_harris_76 · 2015-01-03 05:37 · Score: 1
  
  Hard to believe that the "precious metal" that was used to crown the Washington Monument was aluminum. (Or so I'm told.) Refining it chemically was extremely expensive. Refining it today is pretty cheap.
  
  --
  There's no time like the present. Well, the past used to be.
65. Re:Bitcoin != Coins by Anonymous Coward · 2015-01-04 11:03 · Score: 0
  
  well... if you trust the movie industry anywhere between 135000 to 1350000 USD... counting 800 megs per movie...
Here's your insightful comment by frovingslosh · 2015-01-01 10:25 · Score: 2, Interesting

You can't defraud a digital currency without some form of hacking.

--
I'm an American. I love this country and the freedoms that we used to have.
1. Re:Here's your insightful comment by CaptainDork · 2015-01-01 10:39 · Score: 1
  
  They probably mention this in the fine print of the TV ad.
  
  Electronic payment service BitPay this week launched a campaign aimed at making Bitcoin transactions more appealing to mainstream business owners — the first time Bitcoin has been featured in a TV spot. Conceived by Felton Interactive Group, the two new ads promote Bitcoin and BitPay as a secure alternative to traditional credit-card transactions.
  
  --
  It little behooves the best of us to comment on the rest of us.
2. Re:Here's your insightful comment by Virtucon · 2015-01-01 10:47 · Score: 3, Insightful
  
  it's not hacking if you're on the inside and you own the playing field. It's still theft albeit of digital bits.
  
  --
  Harrison's Postulate - "For every action there is an equal and opposite criticism"
3. Re:Here's your insightful comment by bloodhawk · 2015-01-01 11:09 · Score: 1
  
  you need to look up the definition of fraud. You most definitely can defraud people without hacking, especially when you are on the inside such as those within MT Gox. taking coins from peoples accounts and selling them is defrauding them and would require no hacking from someone within Gox.
4. Re:Here's your insightful comment by Alien1024 · 2015-01-01 11:12 · Score: 1
  
  Not particularly insightful; the vast majority of all government-backed money in existence is "digital" anyway - i.e. it doesn't exist in any analog form (such as coins and notes).
5. Re:Here's your insightful comment by catmistake · 2015-01-01 11:39 · Score: 1
  
  you need to look up the definition of fraud. You most definitely can defraud people without hacking, especially when you are on the inside such as those within MT Gox. taking coins from peoples accounts and selling them is defrauding them and would require no hacking from someone within Gox.
  It would have been nice if TFA explained what it was talking about, re: fraud, because I doubt its what you suggest.
  
  --
  The Admin and the Engineer
6. Re:Here's your insightful comment by Jane+Q.+Public · 2015-01-01 11:44 · Score: 1
  
  It would have been nice if TFA explained what it was talking about, re: fraud, because I doubt its what you suggest.
  I don't.
  
  While it's possible TFA meant something else, I said from the beginning that it was probably an inside job. Anything is a galaxy-scale violation of Occam's Razor.
7. Re:Here's your insightful comment by Anonymous Coward · 2015-01-01 11:55 · Score: 1
  
  It is almost certainly what he suggests. especially as they are talking about both fraud and hacking as distinctly separate crimes that took place. It is highly suspected (with quite a lot of evidence to support it) that those within MT Gox were the ones that stole the money and the hack was more a convenient way to try to hide what they had been doing.
8. Re:Here's your insightful comment by Noah+Haders · 2015-01-01 12:42 · Score: 1
  
  what kind of fraud do you think it is? seems kinda straightforward.
9. Re:Here's your insightful comment by davester666 · 2015-01-01 16:33 · Score: 1
  
  No. That's called being an investment bank.
  
  --
  Sleep your way to a whiter smile...date a dentist!
10. Re:Here's your insightful comment by Virtucon · 2015-01-01 18:12 · Score: 1
  
  investment banks deal in all types of risk, if you invest in the products they sell you can expect loss to zero to some return; it comes with the territory. MTGOX was considered a safe haven for Bitcoin, a bank but unlike a bank there was no regulation to insure that fraud didn't occur and that the deposits would have some sort of insurance against loss, whether by overt or inadvertent acts. Instead, insiders of MTGOX stole Bitcoins it gets that's fraudulent activity. People entrusted these digital assets and the caretakers stole them. In large part it wasn't a third party stealing them, a hacker, it was an inside job.
  
  --
  Harrison's Postulate - "For every action there is an equal and opposite criticism"
11. Re:Here's your insightful comment by Vintermann · 2015-01-01 20:52 · Score: 5, Interesting
  
  But here's the interesting thing.
  Who owns what? According to the hard core of bitcoin fans, it is based on one principle - that the blockchain is the final word on that issue, at least as it concerns bitcoins themselves. If you have the key, the coins are yours.
  If you say "those bitcoins aren't yours, they're stolen!" you're implicitly accepting another standard of property - of who owns what - as higher than the blockchain. Then you concede to the messy passions of society to determine who owns what, rather than the mathematical certainties of the block chain.
  Bitcoin fans are a bit two-minded on this. On one hand, they demand that money in anonymous accounts belongs to whoever controls the keys, and it's none of your business how they got there. On the other, some do call for blacklisting coins, e.g. the coins FBI seized when Silk Road went under. The technology actually makes that possible, unlike with cash or even conventional digital payments.
  I'm all for convicting Karpeles for fraud (and in fact this article is old news to me - despite lots of anonymous accounts trying to pooh-pooh it, investigations of the block chain made a convincing case for fraud in the weeks after MtGox's fall), but I'm also for recognizing the limits of the blockchain, and I'd like BTC fans to realize it can't be a substitute for government, or even government-issued currency.
  
  --
  xkcd is not in the sudoers file. This incident will be reported.
12. Re:Here's your insightful comment by tibit · 2015-01-01 21:28 · Score: 2
  
  Well, an exchange really works by taking the bitcoins - they now own them, not you, all that you have is an entry in some other database - a digital IOU. They could have used the blockchain to store a tamper-proof backup of who was the "real" owner of the coins held by the exchange, too, but chose not to.
  
  --
  A successful API design takes a mixture of software design and pedagogy.
13. Re:Here's your insightful comment by carnivore302 · 2015-01-02 23:20 · Score: 1
  
  What I don't understand is: they know which bitcoins are lost. As soon as someone is spending them, he must be the thief/fraudster/whatever. There is a trail, can't the police track him down?
  
  --
  Please login to access my lawn
Slashdot covered this on a previous release? by Severus+Snape · 2015-01-01 10:57 · Score: 1

Didn't we all talk about this ages ago and the firm conclusion was MtGox used the bug the transaction malleability bug to their full advantage and ran off with everyones money?
1. Re: Slashdot covered this on a previous release? by Anonymous Coward · 2015-01-01 19:46 · Score: 0
  
  TFA implies only 1% was taken that way and the rest was stolen on the inside.
AC Shit or GMO+Chems? by lucm · 2015-01-01 11:31 · Score: 2

At least my shit can be used to fertilize something.
Maybe it's time for me to stop buying organic fruits & veggies at the grocery store.

--
lucm, indeed.
1. Re:AC Shit or GMO+Chems? by Anonymous Coward · 2015-01-01 12:05 · Score: 0
  
  you should. organic is a marketing bullshit gimmick to get hipsters like you to pay more. dumb fag.
2. Re: AC Shit or GMO+Chems? by Anonymous Coward · 2015-01-01 13:24 · Score: 0
  
  Sad but true. Food has always been organic. Well at least the stuff we pick off of plants has.
3. Re: AC Shit or GMO+Chems? by nedlohs · 2015-01-01 13:59 · Score: 1
  
  A word in English having different meanings in different contexts. It's unheard of!
4. Re: AC Shit or GMO+Chems? by Anonymous Coward · 2015-01-01 14:10 · Score: 0
  
  Sad but true. Food has always been organic. Well at least the stuff we pick off of plants has.
  It's like people who whine about "chemicals" in their food.
Retirement accounts were not liquidated ... by Anonymous Coward · 2015-01-01 11:48 · Score: 1

What liquidated retirement accounts? Retirement accounts are *not* an asset of the company, they are managed by not owned by the company. Mine went down 30% and recovered after a few years and is now well above 2008 levels. And I'm referring to a roll-over IRA, not something that is receiving additional contribution.

Are you referring to those investment firms that failed? In that case you should know that the retirement accounts they managed were transferred to other companies. So they too have recovered and are now way up.
"Fraudulent transactions" what does that mean? by Anonymous Coward · 2015-01-01 12:14 · Score: 0

Seriously "fraudulent transactions" what does that even mean? Don't hackers create fraudulent transactions? Or is this saying it's an inside-job from employees stealing?
Clarify, morons.
1. Re:"Fraudulent transactions" what does that mean? by Immerman · 2015-01-01 13:24 · Score: 1
  
  Well yes, that would be one way hackers could steal assets. If however there was no hacking involved in the majority of the fraud, then that would suggest an inside job, wouldn't it?
  
  --
  --- Most topics have many sides worth arguing, allow me to take one opposite you.
Better news report by Anonymous Coward · 2015-01-01 12:54 · Score: 1

http://the-japan-news.com/news/article/0001825662
"The MPD is currently investigating Mt. Gox, suspecting a person who is familiar with the exchange system may have misappropriated bitcoins of the company’s customers."
That unambiguously sounds exactly like what the parent post posited.
1. Re:Better news report by catmistake · 2015-01-04 18:55 · Score: 1
  
  Perhaps I'm reading more into what they were saying, because I don't believe those behind Mt. Gox, as a profitable company, would risk what they have, and have coming, on petty fraud. The problem is motive. What would motivate a rich ceo to defraud his investors? Nothing. So if the GP is and the article is talking about insiders like employees with more clearance, then ok, I'll buy that. But its really wacky to junp to a conclusion that the Mt. Gox leadership, or an individual among them would risk a secure lucritive future for petty embezzlement. Also, considering that something like 300K bitcoins unrelated to the missing bitcoins were recovered from somewhere... looks like there's a good bit of incompetance. Maybe there is NO fraud, and entirely (legally culpable?) financial incompetance?
  
  --
  The Admin and the Engineer
Punctuation and Capitalization Errors by Bing+Tsher+E · 2015-01-01 13:35 · Score: 2

Why do people make so many errors when putting the name of the Magic The Gathering Online eXchange in a news story?
It's almost like it isn't still a hobby site.
1. Re:Punctuation and Capitalization Errors by Anonymous Coward · 2015-01-01 15:18 · Score: 0
  
  Because it ceased to be the Magic the Gathering Online eXchange long before it touched bitcoins. The only thing that is the same is the reused domain name.
2. Re:Punctuation and Capitalization Errors by Richard_at_work · 2015-01-01 20:19 · Score: 1
  
  Can't sites change use in your world? At one point it might indeed gave been "Magic the Gathering Online Exchange", but it doesn't always have to stay that.
3. Re:Punctuation and Capitalization Errors by tibit · 2015-01-01 21:31 · Score: 1
  
  Well, the modus operandi and know-how of the operator didn't change much, so there...
  
  --
  A successful API design takes a mixture of software design and pedagogy.
So the bogeymen didn't do it? by Anonymous Coward · 2015-01-01 13:45 · Score: 0

Whodathot that!?!
Once a Blue Planet by Anonymous Coward · 2015-01-01 14:35 · Score: 0

Its absolutely horrible this planet we live on.. a place where us humans are so driven by evil to steal, murder, rape, pillage and plunder one another. Its horrible. Is every planet out there plagued by all this senseless slaughter? This uncontrolled nightmare can't go on forever.
1. Re: Once a Blue Planet by Anonymous Coward · 2015-01-01 17:35 · Score: 0
  
  Pick up a history book and read between the pages.
  You're sure to find that the current unprecedented burst of capitalism has secured your own safety and security.
  People short on resources and material wealth will almost certainly attack the more affluent if they can
explain to me by Tom · 2015-01-01 22:26 · Score: 1

What I don't understand is this: Bitcoin is a distributed network. We know (or can know) which bitcoins were "lost" in MtGox. What is "true" in the Bitcoin world is determined by the "opinion" of the network.
So couldn't the top 5 or 10 players in the network, who collectively have something like 75% of the computing power, collude and simply invalidate the transactions out of MtGox?

--
Assorted stuff I do sometimes: Lemuria.org
1. Re:explain to me by Anonymous Coward · 2015-01-02 01:05 · Score: 0
  
  So couldn't the top 5 or 10 players in the network, who collectively have something like 75% of the computing power, collude and simply invalidate the transactions out of MtGox?
  It's practically possible to invalidated transactions after they have been accepted and confirmed for this long (older blocks than 2 hours is very hard to ignore). It's also not possible to invalidate specific transactions, so valid transactions would disappear as well. It's intended to be this way. When you've got coins in your wallet you're supposed to be 100% certain that you'll keep them, no matter what anyone did earlier in the chain.
2. Re:explain to me by codebonobo · 2015-01-02 01:20 · Score: 2
  
  What I don't understand is this: Bitcoin is a distributed network. We know (or can know) which bitcoins were "lost" in MtGox. What is "true" in the Bitcoin world is determined by the "opinion" of the network.
  So couldn't the top 5 or 10 players in the network, who collectively have something like 75% of the computing power, collude and simply invalidate the transactions out of MtGox?
  No, the top largest mining pools cannot because:
  1) A 51% attack doesn't change the blockchain history or allow one to steal funds out of existing accounts. If this even ever did occur(unlikely) they could simply either temporarily deny new transactions from being processed or make 1-3 double spends before being noticed and stopped.
  2) The miners in the mining pools can instantly switch pools if their trust is misplaced by the pool operators with no effort and have done so repeatedly in the past where top mining pools have gone out of favor
  3) The true power of the direction of the Bitcoin protocol lies within the "Full nodes" which is any user who chooses a wallet that downloads the full blockchain and not a SPV or thin wallet.
  4) Fungibility is an important concept that many in the community hold as sacrosanct and choose to respect. Their are certain fundamental principles which define bitcoin that we agree upon for the most part and one of them is the fact that all coins are equal and blacklisting will not be instituted
3. Re:explain to me by gordo3000 · 2015-01-02 05:56 · Score: 1
  
  no. assume you have one transaction 50 blocks ago that requires changing. In order to preserve every other transaction in those 60 blocks, you will need to recalculate all 60 blocks (each block of transactions feeds into the hash algorithm for the next block). There are thousands of blocks that need to be "fixed" to do what you are talking about. The computing power required to "catch up" to the current blockchain is obscene unless everyone agrees to stop working on this blockchain until that is done.
4. Re:explain to me by DanielRavenNest · 2015-01-02 09:50 · Score: 1
  
  > We know (or can know) which bitcoins were "lost" in MtGox
  No, we can't, because those were not block chain transactions. They were funds transactions internal to Mt. Gox's account books. Let's assume Mt. Gox had 500,000 bitcoins in "cold storage" (the private keys printed out and stored in a safety deposit box, where no hacker can get to them). Some of those 500,000 coins belong to Mt.Gox itself, from accumulated trading fees. The rest belong to customers. Who owns what is kept track on their internal database. By fiddling with the database, they can move ownership between accounts without ever touching the coins in cold storage. Being able to trace what shenanigans happened to the database depends entirely on available backups of the database *before* the shenanigans happened.
  > So couldn't the top 5 or 10 players in the network, who collectively have something like 75% of the computing power, collude and simply invalidate the transactions out of MtGox?
  If by that you mean transactions from a Mt.Gox owned address to one outside Mt. Gox, again no. Blocks from 9 months to 3 years ago (when Mt. Gox was presumably messing around are linked to every block afterwards (that's why it is called a "block chain"). The linkage is by including the hash value of one block as part of the data in the next block (along with new transactions). If you change an old transaction, the hash of that block will change, and no longer match the value stored in the next block. You would have to recalculate new hashes for every block after the one you want to change. This is basically impossible, as it took the whole network's combined power to generate the existing series of block hashes. If 75% of the network gave up working on new blocks, they would lose future income *and* past income, as a different set of people would get the coins generated in each recalculated block. In turn, all the people who spent all those block rewards, or parts thereof, downstream of the miners, would have their balances invalidated.
5. Re:explain to me by Tom · 2015-01-02 11:41 · Score: 1
  
  Thanks to you and everyone else for their answers, now I understand the whole thing a lot better.
  
  --
  Assorted stuff I do sometimes: Lemuria.org