Bitcoin exchange: Greedy traders to blame for DDoS attack

The soaring value of crypto-currency Bitcoin stuttered slightly last night - after a main exchange for the currency was flooded with network traffic and Bitcoin wallet site Instawallet was suspended. Mt Gox, the most popular Bitcoin exchange, blamed an ongoing distributed denial-of-service (DDoS) attack for trading lags and …

[Anonymous Coward]

So Insta-Wallet has had to tell all its users that there is an unsurmountable problem inherent in their current software so they are having to turn off the service and users will not be able to access their bitcoins directly. I wonder how many of the freetards who are so much in support of bitcoins also maintain the "DRM is evil because a company can turn off you access to the stuff you've bought whenever they want to"!

[Lee D]

Well, if you keep funds of any currency in a third-party, you are of course at the mercy of that third party and their continuing operation. It's like saying that people who put money in a bank obviously think that banks won't just disappear. Of course they do. But it doesn't mean that banks, or any other company holding your stock or money of any currency, couldn't disappear tomorrow either - legally or not.

The "freetard" argument in terms of Bitcoins is a fallacy. You're just trying to drag in old arguments from other quarters (e.g. DRM) that have little or nothing to do with Bitcoins, or a fundamental misunderstanding of what they are. Of course, your entire Bitcoin balance relies on other people running the bitcoin software, updating it, and assigning value to its product (which is just a bunch of numbers). How that overlaps with software freedom or DRM is beyond me.

[Old Handle]

Us freetards run the Bitcoin software on our own machines and were not affected.

It's a shame about Instawallet, though. It was handy service. Security was not its strong point, and they were up front about that, but obviously it turned out to be even less secure than they thought.

[Code Monkey]

I've invested in magic beans - which are entirely resistant to DDoS. Yeah take that Bitcoin!

[firefly]

Well considering that MtGox stands for Magic the Gathering Online Exchange (seriously), I think your beans would be quite safe there.

[Flywheel]

I'm investing in Unicorn Blood meself..

[Don Jefe]

Re:

I went for dragons teeth myself.

[HereWeGoAgain]

Or perhaps America is the source of the DDOS

America does not like anything it does not control. So bringing down a Bitcoin would suit it well.

[Aldous]

Re: Or perhaps America is the source of the DDOS

The governments of the world can barely keep their stuff together as is. Bitcoin is definitely in the small fry league at least until the cartels start using it and then you may see some traction. The various bodies looking at financial issues can't keep up with all the normal financial fraud. I'm sure if the U.S wanted to kill BC they would use some of the SHA-256 ASIC's they almost certainly have and crash the market (look at the history of DES).

DDoS such an unrefined weapon its like claiming government assassination for everything when it is much easier and less attention getting to ruin someone or jail them. Look at Litvinenko vs the oligharchs thrown in jail for media coverage. This does not apply to tinpot dictators and China ( who don't need to even do it state sponsered just let the "patriots" do it! ala Jester on a massive scale)

FYI: Long term miner who has made a lot of profit off of BC so not anti, just realistic.

[HereWeGoAgain]

Re: Or perhaps America is the source of the DDOS

Your arguments are plausible only if the Americans wanted to be identified as the source. Otherwise thd DDOS method is deniable.

[Robert Helpmann??]

Re: Or perhaps America is the source of the DDOS

The economics of the attack are simple: the greater the value, the greater the incentive for attack.

[shonangreg]

bitcoin hosting: good idea? alternatives?

I have a basic question. Please give me your thoughts.

I'd like to make a blog, under a domain I choose, with a host I choose, but untraceable to me. I want full control and would like to be able to make money off ads. So, what I am thinking.

- I get bitcoins

- I pay a registrar and a hosting service in bitcoins for my blog

- ad revenue is converted by the host or another entity into dollars for my account.

Would this work? Is anyone doing this now? Could it withstand everything including both court orders and hacking? If no on these questions, what would my best options be?

[Anonymous Coward]

Re: bitcoin hosting: good idea? alternatives?

No, probably not and certainly not. Decide whether you want a commercial or an anonymous site, both together doesn't work. If you want to publish anonymously in a relatively difficult way to trace the publisher use Tor to seed an upload to BitTorrent, but don't try to get ad revenue, as money is easily traced, especially BC unless you use a different proxy chain and ID for every trade, which requires you control a botnet. The management effort of that gets stupid pretty fast.

[TakeTheSkyRoad]

Re: bitcoin hosting: good idea? alternatives?

Well this might be your main obstacle "under a domain I choose".

Owning a domain requires registration and that registration requires full details such as Name, Address and Contact Number. You could place an extra obstacle by creating a shall company with a PO Box number but that would be a minor speed bump to pass while they look up the Company Owner (you).

http://www.icann.org/en/resources/registrars/raa/ra-agreement-21may09-en.htm#3.3.1

[Muscleguy]

Re: bitcoin hosting: good idea? alternatives?

If you incorporate your company in Delaware then it is against the law there to reveal the owner of that company. You will then need a chain of offshore accounts in secrecy jurisdictions to launder the proceeds through. The tricky bit is to get the money out in some form you can benefit from that the taxman can't get you for.

[Charles 9]

Re: bitcoin hosting: good idea? alternatives?

Actually, there is a tangent project to create a decentralized DNS system. It's called Namecoin. Run the name through Google and do some research. It seems a bit raw at this point, but you never know.

[Anonymous Coward]

not magic beans

The internet has provided a route to communicate across boundaries which is decentralized, virtually free and can be anonymous (if you want). But until now, there was no payment system with the same characteristics. The only problem with bitcoin is that nobody can seriously use it if the price fluctuates so wildly. The more outlets that accept it, the more speculators buy into the bubble, and the more its price jumps so nobody spends it. Maybe fractional reserve banking can help stabilize it, but then you're back with all the kind of banking shenanigans every other currency gets destroyed by.

As for bitcoin being used to purchase drugs, I am pretty sure that most dealers in London only accept pounds sterling... as do the hookers, illegal bookies, hit men and guys selling stolen laptops in pub car parks. And yet curiously nobody is queuing up to rant about the evils of cash issued by HM government.

[Charles 9]

Re: not magic beans

Perhaps in the black markets, no, but Bitcoin aficionados have been refining the technique of performing physical transactions using Bitcoin, usually through the passing of QR Code tokens either printed on paper or displayed on mobile devices.

[Anonymous Coward]

Re: not magic beans

Yes, but people have been having illicity meetings for years and passing wedges of banknotes to each other and nobody has ever suggested this makes cash evil.

[Tim Brown 1]

Hmm...

An interesting (if somewhat vitriolic) analysis of the attack can be found here (the author thinks the people who run MtGox are a bunch of idiots).

http://polimedia.us/trilema/2013/its-been-an-epic-few-days-what-happened/

[MondoMan]

Re: Hmm...

Well, based on Mt. Gox losing a big chunk of the money (real and virtual) their customers had deposited with them a few years back, all due to both poor security and not having a backup, they may very well be idiots.

Bitcoinland is plenty wild-n-wooly. Besides the DDOS against exchanges, it's common to have DDOS attacks against one or more "mining pools" that create the coins. The reasoning is along the lines of "in the land of the blind, the one-eyed man (or mining pool) is king." Another potential worry is that any group that controls more than half of the total extant mining power (usually measured in gigahashes/second) can defraud the system by validating copies of already-used Bitcoins. Definitely not for the faint of heart, but if you've got a reasonably high-end ATI graphics board or five and cheap electricity prices, it can be a fun hobby to join a pool.

[Spoddyhalfwit]

Re: Hmm...

Controlling 50% of the bitcoin network processing power would require pretty phenomenal resources... It's actually rather a clever concept to create a digital currency with no single issuing authority, and rely on the network processing in this way. The big problem with bit coins is the fluctuating price at present. Perhaps as the value of the total issued bitcoins grows, it may stabilise, but with speculators rushing in, I'm not so sure.

[MondoMan]

Re: Controlling 1/2 the bitcoin network closer than you think

Most miners join mining pools. The BTCGuild pool currently controls almost 40% of the total network hashing power. Plenty of other pools control the 11 or 12% needed to carry them over 50%. That would sure worry me if I had significant resources in BTC. Check out

https://bitcointalk.org/index.php?topic=104664.0

[Don Jefe]

End Point

The advantage of a finite resource as a currency is the problem as well: There comes a point where there isn't enough to go around. It increases the value of the currency in the short term but as the resource becomes corralled by a minority the currency loses value as the only people who can trade it are the people who already have it. There's no point in having it and the resource loses its value.

The only way to address the situation is to increase the availability of the resource (Bitcoin in this case) so that others can access it and ascribe value to it (an unattainable resource has no value no matter what it says on the tin). With Bitcoin, which has a built in maximum number of coins the upper limit must be increased. This is called 'printing money' and ultimately leads to the screwy economics, banking and trade systems we have today. None of which can function without the idea of infinite expansion. The only way to 'guarantee' infinite expansion is to have an infinite availability of currency to trade with, which undermines the value of the currency.

All that being said, Bitcoin will either implode because the resource is exhausted (hoarded) or it will expand for greater availability and will quickly reach parity with traditional currencies (dollars, pounds, etc...) in which case why not just use the currencies that at least have government support? A few people will make some good money with Bitcoin but only in the run up to the tipping point. It is not a game I would care to play and could not advise anyone else to mess with unless its for sheer entertainment (like a slot machine).

[Charles 9]

Re: End Point

That assumes the currency has a minimum denomination (the US cent or UK pence). Birtcoin is designed to allow for transactions with a smaller precision. Last I checked, the Bitcoin software can track fractional bitcoins down to eight decimals.

[Destroy All Monsters]

Re: End Point

> There comes a point where there isn't enough to go around.

There is enough ... to do what exactly?

What you want is a possibility to SUBDIVIDE the money as its purchasing power increases (or alternatively, as price deflation sets in because the possibilities of production are greater). So if a cup of coffee was worth 1 unit, it may be had at 0.001 units after a few years. There is no problem here. You just have to be able to set the decimal point.

[Destroy All Monsters]

Re: End Point

In government-enforced fiat currencies, we have the inverse problem. The monetary mass is not constant and inflation happens first through issue of new money by the central bank (money which goes to the treasury, then to well-connected cronies for some righteous "spending" at pre-inflation prices, which is the wealth-transfer effect), followed by pyramiding in fracres banking system (1000 units go into your account, 800 units can be lent out while you can still write cheques on your 1000). This quickly causes the purchasing power to decrease (hidden taxation) and zeroes to pile up at the end of prices even though the prices in an improving and non-deteriorating economy should go down.

[Charles 9]

Re: End Point

Many governments encourage some small amount of inflation as an incentive to keep the currency moving (as the more the money changes hands, the more economic activity you can spur). Flat or deflated currencies tend to encourage hoarding, meaning the money doesn't move around. Whether you can keep the inflation game going for too long is a debate among economists.

[Cliff]

Quite, quite mad

Am I the only one who thinks serious investments in a currency whose value is based on woo and hype alone is fucking insane? I blinked and the 'value' of a bitcoin went from $90 to $140 which suggests by the time I get off the loo it could be $90 again, or $10, or $fuckall.

[MondoMan]

Re: Quite, quite mad

You're right, but many (most?) of the people with lots of BTC likely just mined them, especially a few years ago when one could still do so on CPUs, and thus have no investment in them other than the electricity used for mining.

[Charles 9]

Re: Quite, quite mad

You know a fiat currency isn't much better. It's only the trust of the government that keeps them afloat. Some people would rather trust a non-government entity.

[kparsons84]

I hear you...but what about people who bought last summer at around $5 and held them? if you'd spent £5K it would (as of now) be worth £150K. Who gives a fuck if it's a bubble if you can sell out for that? And if you part closed on the way up to cover the £5K then the rest of this crazy rise would have been risk free.

Would you have cared if the whole thing collapsed the next today? I wouldn't.

[Whiznot]

I followed the advice of W. C. Fields and invested my life savings in a beef steak mine.

[Winkypop]

I just don't get it

See title

[Cliff]

sell sell sell

If you can dump your 10000 bitcoins at $280 without crashing the market go for it!

Gosh, I wish they were shortable!