Posts tagged "selloff"

MtGox is a sinking ship

Earlier today MtGox put out a press release regarding their issues surrounding halting all withdrawals. Friendly SA Forums goon Begby breaks it down for us here:

Basically when you send bitcoins to someone, there are several inputs in the transaction. Like the destination address, the amount, etc. Based on those inputs you get a transaction ID which is a hash of those inputs. If you want to see if something was confirmed on the blockchain, you can look up that transaction ID.

However, there is an attack you can do. You can actually change the order of the inputs and have the transaction still go through and end up with a different transaction ID.

Here is how the attack works:

1. Hey, MT Gox, I want to withdraw 4 butts to this address.

2. Mt Gox sends you those 4 butts and gets a transaction ID, broadcasts the transaction to get confirmed (basically yells to the internet, hey you stupid miners confirm this)

3. You, the totally awesome hacker, also broadcast the transaction with the inputs in a different order and yell to the internet louder. This results in a different transaction ID if it gets confirmed first.

4. If you yell loud enough, the blockchain confirms your set of inputs. So the transaction went through, but not under the transaction ID that Mt. Gox was expecting.

5. Call up Mt Gox and complain that you didn’t get your butts

6. Mt. Gox looks in their DB for the transaction ID they have on record, tries to look it up in the blockchain and can’t find it so they think it wasn’t confirmed. They then send you the butts again.

This is a well known issue with the bitcoin protocol and other exchanges workaround this by looking up the inputs in the blockchain instead of relying on the transaction ID, and only using the transaction ID after the transaction has been reliably confirmed. Mt. Gox is saying that this is a problem with bitcoin to cover their ass. I am not sure if its even bug. Its more of “don’t assume a transaction ID is legit until the transaction has actually been confirmed”.

So basically Mt. Gox has been getting ass raped by this known exploit for who knows how long, and has resent god knows how many butts. So their internal ledger is completely and totally fucked and they are going to have to go through every transaction they have ever done, look it up in the blockchain by inputs instead of transaction ID, and try to pick up the pieces. This is like finding out that you have accidentally been writing two checks for all your bills and then only realize this when your account goes negative.

TLDR; Mt. Gox got robbed using a well known exploit with an easy workaround that is so well known is not even a top ten issue for the devs. When successful this exploit will cause gox to double send butts to someone on a withdrawal. Who knows how much they double sent, they probably don’t even know.

Edit: Bonus, one of the devs said he had warned Mt. Gox of this several times over the past few years.

It's in someone else's wallet, that's where

It’s in someone else’s wallet, that’s where

11 comments
Posted by killhamster - February 10, 2014 at 10:06 am

Categories: Buttcoin, Captains of Industry, Featured   Tags: , , , , , , , , ,

It’s So Easy

As the price of Bitcoin trundles to new heights, more and more people are looking to cash in their Beenz and run like Hell before exchanges vanish or are “hacked,” and are finding it to be a rather daunting task. With the popular Magic: the Gathering Online eXchange taking almost two years to allow withdrawals, Bitcoiners are turning to smaller exchanges that are ill-prepared to handle the volume, small-potatoes ATMs, or shady parking lot deals made through LocalBitcoins.

We’re here today to detail the story of a man in Canada who happened to mine some Bitcoins back when CPU mining was possible, then forgot about them until the hype started to bubble the price unsustainably. This adventure is proving to be a little more difficult than expected. Here is his story so far, as outlined by SA Forums goon UberJumper: Read more…

61 comments
Posted by killhamster - November 27, 2013 at 9:35 am

Categories: Buttcoin, Editorial, Featured   Tags: , , , , , , ,

Bitcoin: a story in six panels

asaybitcoin

3 comments
Posted by killhamster - April 10, 2013 at 12:22 pm

Categories: Buttcoin   Tags: , , , , , , ,

Is MtGOX manipulating the Bitcoin market?

For those not in the know, the Magic: the Gathering Online eXchange (MtGOX for short, emptygox to some) is the largest and most popular bitcoin “exchange,” a service that matches fools wishing to buy bitcoins with those who are just a bit wiser and are trying to get out. It’s somewhat similar to real stock exchanges, except it focuses on only one thing, does a terrible job trading, and was originally intended to exchange virtual Magic: the Gathering cards. MtGOX theoretically matches buyers and sellers, then takes a fee for each transaction, then apparently throws that away instead of spending it on maintenance, infrastructure, or administration. The site is notoriously laggy, has been hacked, DDoSed (if its admins are to be believed,) and appears at most times to be held together by twine.

mtgoxmagiccard

Despite all of this, MtGOX has prevailed and is widely used to buy and sell what amounts to Chuck E. Cheese tokens. Recently, the price has risen meteorically and is skirting USD 200 (let’s face it, nobody cares about other currencies) at the moment, though it’s oscillating wildly enough to produce a tone. MtGOX has been the primary arbiter of this “value” throughout the entire wild ride, but some things are starting to seem more and more suspicious. The lag in transaction times on MtGOX is infamous now, so much so that the official bitcoin IRC channel has a bot command that posts the lag in seconds and the distance traveled from the sun (measured in Astronomical Units) during that time. Typically during large selloffs and other market scares, the lag reaches ten to fifteen minutes, during which time light from the sun reaches Earth or beyond. The big-boy stock exchanges spend fortunes to optimize their connections to shave milliseconds off of their transaction times while MtGOX is running on hamster wheel power. The lag is normally manageable, but during panic selloffs, it kicks in quickly, acting as a brake and halting any potential crashes, easing off when buying appears to be in vogue again. This isn’t nearly as great an issue when people are in a buying frenzy, despite what bitcoiners would have you believe. The lag is blamed on numerous things including high volume trading (this is possible,) a poorly coded backend (this is absolutely true,) and DDoS attacks (this is bunk.) Some also wonder if it’s not intentionally instated, acting as an emergency brake to keep the price up, keeping people trading and keeping MtGOX in business. During the last price drop, the site was actually taken offline, halting the crash (and any potential purchases) entirely.

GoxLag

While the lag is the most glaring and obvious issue, there are other, less noticeable problems that pop up repeatedly. Selling and buying follows an odd pattern of large sales, after which the price drops (or plummets, as is often the case,) and then numerous (sometimes dozens or more) small purchases appear, each incrementally increasing the price until it’s recovered a bit. This isn’t to say MtGOX is doing this though, as it could be easily explained by high-frequency trading (at least as high a frequency as five to ten minutes of delay allows) bots kicking in at certain price points to push the “value” up and avoid losses. The sudden flurry of activity from such an event could also explain the lag and accusations of DDoS.

Further complicating the lag, trading problems, and general unusability is the expected incompetence of a bitcoiner-run “business” and its infrastructure. MtGOX claims to rake in several tens of thousands of dollars in profits per day, but apparently has invested none of this into more capable hardware or more efficient code. Seeing as it has the dominant market share over all the other bitcoin exchanges, it has no incentive to improve. Their profits are based primarily on trade volume, so the more they let through (especially when people are buying in and driving the price up,) the more they make. Seeing as their fees are percentage-based, it makes perfect sense for them to prop up the price, maximizing profits.

Another odd thing that’s been noticed time and time again are the fake buy and sell walls. These used to be much more common and obvious, especially during flash crashes, as they’d vanish immediately upon being reached, but are seen less frequently now that the lag more effectively controls crashes.

r630i

Lastly, but hopefully the least likely, the MtGOX admins could be directly manipulating the prices, pushing them further and further up during periods of wild speculation, once more in order to maximize profits based on per-transaction fees. There is no evidence of this in particular, but with no one reputable auditing their practices and no proper regulation, this can’t be entirely ruled out. Until MtGOX either somehow fails catastrophically, runs off with bitcoins, or proves otherwise, it’s best to hold them under suspicion of butt market fuckery and manipulation.

Note: During the writing of this article, MtGOX pulled the plug yet again to stop a small crash. Someone sold 5,000 coins and the price dropped by $10 USD instantaneously.

22 comments
Posted by killhamster - April 8, 2013 at 3:15 pm

Categories: Buttcoin   Tags: , , , ,

bASIC overheats, releases magic smoke

Last night Tom from bASIC, “Next generation Bitcoin mining hardware” built in his garage, blew a gasket:

these type of threads are BULLSHIT

we have always honored our refund requests but a thread like this basically just kills my business

Ask yourself this question:

Do you want a nice friendly refund as we have been giving or do you want to completely put me out of business?

because if you completely put me out of business than you are going to have to come to NY to take me to small claims court.

ask yourself this question, do you really want to come to NY to take me to small claims court? or do you just want to wait your turn and quietly get your requested refund as hundreds of people already have. Keep with the mob mentality its only going to keep you separated from your money longer.

this thread is bad for anyone seeking a refund, and the mods need to take notice and remove threads such as this.

HELLO CUSTOMERS
this is not good for you. Please stop.

im reporting this to the mods myself – I encourage others to do the same.

-Tom

This occurred throughout multiple threads on the Bitcointalk forums.

Read more…

Posted by killhamster - January 23, 2013 at 10:38 am

Categories: Buttcoin   Tags: , , , , ,

Bitcoin crashes below the $5 mark, loses 35% of it’s value, MASSIVE selloff today.

This may be the final straw for bitcoins. There was a massive selloff today (180k coins and counting) as the price of bitcoins crashed through the $5 price point. Everyone’s jumping ship right now.

There’s really little chance of it ever coming back above that price point. Here’s the all-time chart, this is by far the largest selloff in Bitcoin’s history happening right now.

And just for fun, here’s another graph:

Remember when I called the peak at the beginning of June? I got so much shit for that.

13 comments
Posted by Buttcoin - September 9, 2011 at 11:11 am

Categories: Buttcoin   Tags: , , , , , , , ,

The buttcoin crash begins

Someone look at my post yesterday and tell me I wasn’t right on the fucking money with where in the bubble we were.

Someone decides they want to be an internet million, sells off 135k of bitcoins, becoming a millionaire off the backs of broke nerds.

i'm rich, bitch!

What happens when you place a sell order that large in a market that volitile? It drops like a fucking rock.

Woah, nelly. And it seems to be dropping and dropping more and more every minute.

The currency of the future!

BTW Mt. Gox stands for “Magic the Gathering online exchange”. That is the larget bitcoin marketplace, a discarded MtG site.

4 comments
Posted by Buttcoin - June 11, 2011 at 5:01 pm

Categories: Buttcoin   Tags: , , , , , , , , ,