Buying bitcoins

Dr Silly Bollox MD

Google Trends

Russia, US, Scandinavian 3 driving the searches for it.

Capt'n Midnight

51% attack is easy.

If I understand it correctly you wait until both sides are at 49% and use your 2% processing power (Amazon / GPU botnet / NSA ) to join the side that first realises that half a loaf is better than no bread.

Yes you need a lot of resources, but you only need to use them when it's close. So running costs are very low. Capital costs could be very low too. Imagine every half decent public sector PC in the UK waking up on lan in the middle of the night.

fergalr

Capt'n Midnight wrote: »

51% attack is easy.

If I understand it correctly you wait until both sides are at 49% and use your 2% processing power (Amazon / GPU botnet / NSA ) to join the side that first realises that half a loaf is better than no bread.

Yes you need a lot of resources, but you only need to use them when it's close. So running costs are very low. Capital costs could be very low too. Imagine every half decent public sector PC in the UK waking up on lan in the middle of the night.

Assuming you are not just trolling, I don't think you really understand what you are talking about.

Would you mind walking us through how your 'attack' works, in detail?

Giblet

fergalr wrote: »

Assuming you are not just trolling, I don't think you really understand what you are talking about.

Would you mind walking us through how your 'attack' works, in detail?

A potential attack vector is BTC Guild itself, which controls nearly 50% of the network. As pooled miners usually just rely on the honesty of the administrators not to perform an attack, it's a viable attack to try and take control of BTC Guild from the owner (or the owner himself could do it). How long it would be able to pollute the block chain for is another matter, so it might not be successful.

This is probably different to what Capt'n Midnight suggested, although a shortfall would probably need to be replaced as miners realised what has happened and stop mining.

Capt'n Midnight

It's really an opportunistic "attack" where you wait until one group has a vested interest in having a longer block chain, not your everyday fork. Since you have the resources to tip the balance either way you can try to bargain for a disproportionate share of that groups rewards.

It's kinda like only buying lotto tickets during a very large rollover. But then buying enough lotto tickets to guarantee you wining more than you invested.
http://www.nytimes.com/1992/02/25/us/group-invests-5-million-to-hedge-bets-in-lottery.html?pagewanted=all&src=pm

You'd have to wait until conditions were ripe and that may not happen.

Stingerbar

Newish to this whole Bitcoin thing but work in finance

Can anyone explain to me how this isn't anything other than opportunist gambling?

It just seems that the currency itself is very illiquid, the platform it's on is not what I would call rock solid

Ontop of that it's main use so far seems just to buy illegal drugs, etc on the net?

The only stable factor appears to be greed

srsly78

It works very well as an internet currency, it's much easier to pay for stuff online with bitcoin than it is to use credit card or other method. There are no middlemen like Paypal or Visa taking a big cut.

The problem is all this hype and speculation is stopping it from being used for it's main purpose due to deflation. Once the price returns to sane levels normal activity can resume. There was a big boom+crash 2 years ago, this is round 2.

If people are actually using it as an investment, then yes that is opportunist gambling!

Giblet

It cannot be used as a currency at all, it has a extremely high spread and is illiquid.
It's much easier to buy and sell as quickly as possible to take advantage of this.

Imagine buying something for 200 dollars or 1btc, and it takes a week to process, meanwhile the value is now half that.
Complete lunacy, even during normal trading of this "stable" currency.

Amberman

Its takes you a week to buy a bitcoin? Hows that?

Giblet

To cash out as a retailer, hey, a week is a gross exaggeration, it's lost >30% of the value in the last few hours.

Amberman

Why does it take you so long?

Giblet

What's the lag on MTGox at the moment?
If you bought something last night for a bitcoin, have you suddenly paid too much for it, or has the retailer received too little, or does it matter as you never cared about the cash value in the first place... With normal currency, there is a spread, with bitcoin, it's a vast chasm.

Amberman

Well, Im not selling, so I have no idea what the lag at Mt Gox is.

So its a week is it? Thats interesting.

Amberman

Seems like you may be a bit of the mark there

http://techcrunch.com/2013/04/11/bitcoin-price-drop-caused-by-rush-of-interest-not-ddos-says-mt-gox-exchange-newcomers-now-opening-20k-accounts-per-day/

zonEEE

The lag will go, we are in the early days folks, remember every other website on the internet in the early days?

Great time to buy at the moment i think, but sure what do i know

Giblet

Amberman wrote: »

Seems like you may be a bit of the mark there

http://techcrunch.com/2013/04/11/bitcoin-price-drop-caused-by-rush-of-interest-not-ddos-says-mt-gox-exchange-newcomers-now-opening-20k-accounts-per-day/

That seems to confirm 24 hours lag. More than enough to knock 50% off the value of bitcoin it seems, not including lag in actually removing the cash from the system after you have sold it.

zonEEE

Giblet wrote: »

That seems to confirm 24 hours lag. More than enough to knock 50% off the value of bitcoin it seems.

50% of which was gained in the past few days only.

Giblet

zonEEE wrote: »

50% of which was gained in the past few days only.

Yep, really useless as a currency isn't it?

zonEEE

Giblet wrote: »

Yep, really useless as a currency isn't it?

At the moment maybe but as I said, early days....

For stability to come to the price the exchanges need to be stable, which will happen over time.

Amberman

The volatility isnt welcome, thats for sure. Even though I bought BTC ages ago and am very happy with it in general , volatility is still a big problem for wide adoption. The ability to short/hedge Bitcoin should provide some stability. But if MtGox has gone from 75k new users a month, to 600k a month in the space of 4 weeks, the surge is completely understandable....as is the volatility. Seems like standard growing pains to me.

Roonbox

Amberman wrote: »

The volatility isnt welcome, thats for sure. Even though I bought BTC ages ago and am very happy with it in general , volatility is still a big problem for wide adoption. The ability to short/hedge Bitcoin should provide some stability. But if MtGox has gone from 75k new users a month, to 600k a month in the space of 4 weeks, the surge is completely understandable....as is the volatility. Seems like standard growing pains to me.

I agree with you, but with a limit of 21m Coins and a constant increase in buyers then I cant see Volatility going away any time soon

Amberman

with the ability to short BTC, I think volatility will be severely dampened in the very near future. Large buyers will simply go short the market and hedge their coin positions rather than offload their coins in future if they are worried about a price crash after a massive run up like we've just had. It makes a lot more sense to short the market than it does to offload and reload their wallets every time they get a bit jumpy.

Roonbox

Amberman wrote: »

with the ability to short BTC, I think volatility will be severely dampened in the very near future. Large buyers will simply go short the market and hedge their coin positions rather than offload their coins in future if they are worried about a price crash after a massive run up like we've just had. It makes a lot more sense to short the market than it does to offload and reload their wallets every time they get a bit jumpy.

Shorting will definitely help..

I would have been all over a short in the last few days

Amberman

Yeah, I think I would too. The issue with shorting for BTC bears is, that when they bring shorting in, its also acts as a hedge, so price drops won't be any where near as dramatic as they would be without shorting.

EDIT: Just ask the muppets who banned shorting in the hope of stabalising bank stocks in the Eurozone.

fergalr

Giblet wrote: »

A potential attack vector is BTC Guild itself, which controls nearly 50% of the network. As pooled miners usually just rely on the honesty of the administrators not to perform an attack, it's a viable attack to try and take control of BTC Guild from the owner (or the owner himself could do it). How long it would be able to pollute the block chain for is another matter, so it might not be successful.

Sure.

Although, presently, BTC guild have about 30% of the hash rate, so it wouldn't be enough to just take over that pool. You are just describing a normal 51% attack.

Also, your attack would depend on the members of the pool not noticing there were shenigans afoot; that's a big assumption.

Giblet wrote: »

This is probably different to what Capt'n Midnight suggested, although a shortfall would probably need to be replaced as miners realised what has happened and stop mining.

Yup.

Capt'n Midnight wrote: »

It's really an opportunistic "attack" where you wait until one group has a vested interest in having a longer block chain, not your everyday fork. Since you have the resources to tip the balance either way you can try to bargain for a disproportionate share of that groups rewards.

It's kinda like only buying lotto tickets during a very large rollover. But then buying enough lotto tickets to guarantee you wining more than you invested.
http://www.nytimes.com/1992/02/25/us/group-invests-5-million-to-hedge-bets-in-lottery.html?pagewanted=all&src=pm

You'd have to wait until conditions were ripe and that may not happen.

I don't think you understand what you are talking about here.

You seem to just be describing a standard 51% attack, except, in your scenario, you control 2% of the network, and find someone that has the other 49% and is willing to collude with you.

Doesn't seem anything very interesting about saying that.
You've not given any special reason why anyone would collude with you, or highlighted any other attack.

I don't think you've backed up your original statement '51% is easy'.


Also, I don't see at all how this is like buying lottery tickets.
Brute forcing lotteries only works when its possible to buy tickets with positive expected value; which it shouldnt be, in a well constructed lottery. It tends to only happen in certain circumstances, such as high rollover, as you say, or when organisers have miscalculated the intermediate prizes; I fail to see how the analogy applies here.

Capt'n Midnight

http://bitcoin.clarkmoody.com/

Trading is halted on MtGox until 2013-04-12 02:00am UTC to allow the market to cool down following the drop in price. Read more details on the support. Additionally trading fees will not be charged within 48 hours of trading resuming (until 2013-04-14 02:00am UTC).

EDIT https://support.mtgox.com/entries/21519569-Market-Cooldown-for-12-hours it's a 12 hour cool down

Orders will not be accepted for the moment as we need to upgrade our database to accommodate the trading volume. However, you may still cancel your pending and open orders. Trading will resume at 11.00 am JST. Our apologies for the inconvenience caused and thank you for your patience while we work to resolve this issue.

pH

Even if you can get 51% of the network - the "honest" net doesn't just have to sit around and accept it. Exchanges will suspend, the network will be reconfigured not to accept the hacked blocks and it would be restarted.

Even if you have 51%+ of the network it's still pretty limited to what you can actually do - you can attempt to double spend coins you actually own - that's pretty much all.

The chances are no one would accept your double spent bitcoins (it would be obvious the network had been compromised) and the attacker would be left with the bitcoins they bought.

moneymad

Sh!tcoin lost 39% in a few hours. How anyone can put money into this yolk is hilarious.
Can anyone tell me can you actually cash out these coins for usd or euros ?

spix

moneymad wrote: »

Sh!tcoin lost 39% in a few hours. How anyone can put money into this yolk is hilarious.
Can anyone tell me can you actually cash out these coins for usd or euros ?

It's a bit hard to take your first two sentences seriously after reading the third :rolleyes:

You cash out by selling them at exchanges or by personal sales. Coins are stored in a bitcoin 'wallet' https://blockchain.info/wallet/ and can be transferred to other wallets free of charge by using a wallet address. For example this is mine 1F6VxCpdDAWpACnoTcdC7Gge6XQX8c9Pi5 Feel free to send me bitcoins

moneymad

spix wrote: »

It's a bit hard to take your first two sentences seriously after reading the third :rolleyes:

You cash out by selling them at exchanges or by personal sales. Coins are stored in a bitcoin 'wallet' https://blockchain.info/wallet/ and can be transferred to other wallets free of charge by using a wallet address. For example this is mine 1F6VxCpdDAWpACnoTcdC7Gge6XQX8c9Pi5 Feel free to send me bitcoins

What if they are too high and i don't have a buyer of my coins on the exchange? Can i cash them out no?