Mt. Gox under DDoS attack as bitcoin price surges(computerworld.com)
computerworld.com
Mt. Gox under DDoS attack as bitcoin price surges
http://www.computerworld.com/s/article/9238118/Mt._Gox_under_largest_DDoS_attack_as_bitcoin_price_surges
14 comments
I know this is a commonly held belief, and quite possibly also the correct legal interpretation of the situation, but I find it so strange. A currency is just what we call a currency. If tomorrow my friends and I decide to start trading goods for bicycles, then our bicycles become currency. I don't see how that would all of a sudden make it OK to steal each other's bicycles, or somehow put bicycles outside the scope of existing laws. If I went to the police and said "Someone stole my bicycle", it would seem crazy for them to respond with "haha should have kept that value in USD instead sucker!"
Every physical good we have has only the value we instill in it in our minds. The absolute best analogue to this is chips at a casino. Chips really are a parallel currency. They can buy you anything within the mini economy of the host casino (and additionally are accepted by other fringe elements in said city). They can be exchanged back for USD as well. Despite this, the authorities in Las Vegas take casino chip theft very seriously. Now people can go out of their way to explain how chips aren't really currency for whatever reason they want. To that I could then respond "fine, but in that case I also don't believe bitcoin to be currency either, just my own digital property, like an iTunes song. So I still expect to have these digital assets protected by the law".
Every physical good we have has only the value we instill in it in our minds. The absolute best analogue to this is chips at a casino. Chips really are a parallel currency. They can buy you anything within the mini economy of the host casino (and additionally are accepted by other fringe elements in said city). They can be exchanged back for USD as well. Despite this, the authorities in Las Vegas take casino chip theft very seriously. Now people can go out of their way to explain how chips aren't really currency for whatever reason they want. To that I could then respond "fine, but in that case I also don't believe bitcoin to be currency either, just my own digital property, like an iTunes song. So I still expect to have these digital assets protected by the law".
How is your iTunes library protected by law?
IANAL, but if someone steals a hard drive from me which I can prove contained $10,000 worth of iTunes purchases, I am relatively certain the punishment would be harsher than stealing an empty hard drive from me. Replacement value and all that.
It's at least certainly the case that if I were to find a way to download the iTunes tracks off iTunes for free, I would be charged with theft (whether you agree with that or not).
It's at least certainly the case that if I were to find a way to download the iTunes tracks off iTunes for free, I would be charged with theft (whether you agree with that or not).
That would be a really interesting test case (the hard drive one) which I think we missed a golden opportunity back with $10,000 CAD packages that node locked to the drive serial number.
But to address your original comment, you are absolutely correct that folks can create arbitrary currencies out of arbitrary goods (such as bicycles), but some make better choices than others.
Bicycles have the benefit of having both a 'property' value which was established by their replacement cost (great posts on Priceonomics on that[1]) but a poor recovery rate. They are also hard to store and are distinctly less useful to people far away from you because shipping has high costs. You could use in-game WoW items, but they too get little respect when stolen [2] :-) Casino chips however are a great analog, not only because they translate 1:1 to dollars but also because I grew up in Las Vegas and had lots of experience with them as a "currency" and later as a forbidden currency.
When Casino chips are stolen, surprisingly enough, the police don't care. Which is to say that as far as the police are concerned they have zero value (even though they have a nominal face value) That value is enforced by the casino not the state. So casinos care when they are stolen and take responsibility for punishing the people who steal them.
There was a series on one of the discovery channels called "Cheating Vegas" [3] which talked about some of the higher profile ways in which casinos were taken advantage of and something you should note if you get to see it, is that the people who stole Casino chips and forged casino chips, they aren't accused of theft they are accused of cheating the casino. It's a weird thing but people go to Vegas in order to "get" chips from the casinos, the casinos make up games with rules by which they can do that, and the gaming commission ensures that neither the customer nor the casino can violate the rules as stated. Forging casino chips isn't so much a "crime" as it is an unlicensed way to accumulate chips. How strange is that? Anyway the point is that the Casinos spend a ton of their own money (a portion of their profits) on security systems, private guards, etc.
To achieve a similar enforcement system with Bitcoin you would need some agency which used part of their profits to hunt down and deal with people who acquired their BitCoin in an unapproved way. So lets say Mt. Gox did this. They took 1% of their transaction charge and funded a team of ex-special forces types working for Blackwater[4] to apprehend them. Then what? Under what you and I recognize as "the law" the status of BitCoin is the same as gold coins in World of Warcraft, a digital product that some people are willing to exchange for other currencies.
So here is the bottom line, if you steal a currency that is issued by a country as legal tender, that country has an internationally recognized right to prosecute in their judicial system. If you steal a currency that is issued by a private enterprise their actions are limited by what they can do in the Terms of Service (for game companies) or adjacent laws (in the case of gambling). Stealing this stuff really pisses people off and its wrong but in all the ways that count it isn't actually "illegal" as far as I can discover. (would love to hear a legal theory on prosecuting a bitcoin theft btw, I've been chatting off and on with my public defender sister-in-law and she hasn't come up with one either)
[1] http://blog.priceonomics.com/post/30393216796/what-happens-t...
[2] http://www.youtube.com/watch?v=jSyjcib_Fps
[3] http://america.discovery.com/tv-shows/cheating-vegas/about-c...
[4] http://academi.com/ (renamed Blackwater, see http://abcnews.go.com/Blotter/blackwater-renames/story?id=15...)
But to address your original comment, you are absolutely correct that folks can create arbitrary currencies out of arbitrary goods (such as bicycles), but some make better choices than others.
Bicycles have the benefit of having both a 'property' value which was established by their replacement cost (great posts on Priceonomics on that[1]) but a poor recovery rate. They are also hard to store and are distinctly less useful to people far away from you because shipping has high costs. You could use in-game WoW items, but they too get little respect when stolen [2] :-) Casino chips however are a great analog, not only because they translate 1:1 to dollars but also because I grew up in Las Vegas and had lots of experience with them as a "currency" and later as a forbidden currency.
When Casino chips are stolen, surprisingly enough, the police don't care. Which is to say that as far as the police are concerned they have zero value (even though they have a nominal face value) That value is enforced by the casino not the state. So casinos care when they are stolen and take responsibility for punishing the people who steal them.
There was a series on one of the discovery channels called "Cheating Vegas" [3] which talked about some of the higher profile ways in which casinos were taken advantage of and something you should note if you get to see it, is that the people who stole Casino chips and forged casino chips, they aren't accused of theft they are accused of cheating the casino. It's a weird thing but people go to Vegas in order to "get" chips from the casinos, the casinos make up games with rules by which they can do that, and the gaming commission ensures that neither the customer nor the casino can violate the rules as stated. Forging casino chips isn't so much a "crime" as it is an unlicensed way to accumulate chips. How strange is that? Anyway the point is that the Casinos spend a ton of their own money (a portion of their profits) on security systems, private guards, etc.
To achieve a similar enforcement system with Bitcoin you would need some agency which used part of their profits to hunt down and deal with people who acquired their BitCoin in an unapproved way. So lets say Mt. Gox did this. They took 1% of their transaction charge and funded a team of ex-special forces types working for Blackwater[4] to apprehend them. Then what? Under what you and I recognize as "the law" the status of BitCoin is the same as gold coins in World of Warcraft, a digital product that some people are willing to exchange for other currencies.
So here is the bottom line, if you steal a currency that is issued by a country as legal tender, that country has an internationally recognized right to prosecute in their judicial system. If you steal a currency that is issued by a private enterprise their actions are limited by what they can do in the Terms of Service (for game companies) or adjacent laws (in the case of gambling). Stealing this stuff really pisses people off and its wrong but in all the ways that count it isn't actually "illegal" as far as I can discover. (would love to hear a legal theory on prosecuting a bitcoin theft btw, I've been chatting off and on with my public defender sister-in-law and she hasn't come up with one either)
[1] http://blog.priceonomics.com/post/30393216796/what-happens-t...
[2] http://www.youtube.com/watch?v=jSyjcib_Fps
[3] http://america.discovery.com/tv-shows/cheating-vegas/about-c...
[4] http://academi.com/ (renamed Blackwater, see http://abcnews.go.com/Blotter/blackwater-renames/story?id=15...)
Buying drugs for bitcoin just happens to be the most famous use, because the media love to pay attention to Silk Road. So when everyone think about bitcoin, silk road comes to mind. Everything else associated with bitcoin just get left behind because it is boring.
EVE Online has drugs, too. #justsaying
It should be noted that when there is a legal authority behind a currency, there is immense incentive to find ways to manipulate and infiltrate that authority. I would even argue that this incentive is stronger than the incentive to manipulate a decentralized currency.
In this article Mt Gox says that the attacks are to manipulate the currency. My first guess was this was a shakedown; it's not uncommon for organized criminal gangs to DDOS a site until they pay a ransom. Grey market sites are particularly vulnerable to extortion; online gambling, for instance.
Some Russians tried this in May 2011 during the last bubble. MtGox was transparent about it.
https://bitcointalk.org/index.php?topic=7494.0
https://bitcointalk.org/index.php?topic=7494.0
What kind of sources do you have to back up this theory? Never heard of that before.
The main source I've read on DDOS extortion is "Fatal System Error". It's largely about Barrett Lyon's company Prolexic, a company specifically providing DDOS protection for online casinos. But that's just one example, I think there are many more. I have zero specific evidence that there's been DDOS extortion against BitCoin providers, but it sure seems plausible.
Prolexic is also the company providing DDOS protection for MtGox.
Source: MagicalTux (person who runs Gox) in freenode #mtgox.
Source: MagicalTux (person who runs Gox) in freenode #mtgox.
Here's a similar example: https://sealswithclubs.eu/currently-experiencing-a-ddos-atta...
And the concept is hardly new: http://news.bbc.co.uk/2/hi/technology/4579623.stm
And the concept is hardly new: http://news.bbc.co.uk/2/hi/technology/4579623.stm
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Mt. Gox is in the midst of a major technical overhaul of its exchange. Gay-Bouchery said Mt. Gox is rebuilding its trading platform from the ground up.
We're throwing out our entire OLTP system, but trust us - the lag and error pages that have been popping up on our heaviest trading day of the year are caused by hackers.
We're throwing out our entire OLTP system, but trust us - the lag and error pages that have been popping up on our heaviest trading day of the year are caused by hackers.
Attackers. They're not hackers, they're vandals throwing eggs at your house.
Yes it's entirely more likely that they're breaking their own service (which with transaction fees is their primary income source) rather than some person or group screwing with the exchange in order to influence the price.
Heh. I'm suggesting their trading platform is having trouble scaling, not that they're doing it on purpose.
[deleted]
With all the vague claims about attacks and building a "bullet proof" system I have a hard time trusting them any more than a trader at a big bank selling their own complicated financial instrument. He seems to be trying to manipulate the prices with these statements too. Good thing it is unregulated. Oh yeah, and "He warned bitcoin traders not to panic or invest more money than they're willing to lose." IMHO this is a straight up admission it is a speculative investment and not a real currency at the moment.
> IMHO this is a straight up admission it is a speculative investment and not a real currency at the moment.
Did anyone ever claim that it was? I mean...it's a real currency in the sense that people are using it to exchange goods and services, but IMO anyone who has the expectation that Bitcoin should have had all of its issues figured out right out of the gate has their standards set a wee bit high.
Did anyone ever claim that it was? I mean...it's a real currency in the sense that people are using it to exchange goods and services, but IMO anyone who has the expectation that Bitcoin should have had all of its issues figured out right out of the gate has their standards set a wee bit high.
I am not a banker or an economist, but when I hear the word currency I have certain expectations, savings and spending come to mind first. Speculation is not something I immediately think of. In reality the use of it as a currency seems to be limited, at the moment, to high margin items (food, virtual goods). While I have personally seen virtual services accepting Bitcoins I have yet to see a local small business accept them myself. I would not feel comfortably saving or spending them at the moment, so I don't look at them as a true currency. I do highly stress "at the moment" though, anything is possible and this is fascinating to watch from the sidelines.
My dad does hobby trading in the currency markets. It is absolutely speculative, and you bet against trends in how currencies trade against one another.
Just like with bitcoin.
The difference is that USD, Euro, Yen, etc are all trillion dollar markets, where BTC is measured in millions. The speculative market pushes around the valuation a lot more, and BTC swings a truckload more from trading in its exchange rates than any other currency - changes in the Euro are measured in cents over a year, not in a hundred dollars over 6 months.
I won't argue people are buying BTC to use for exchange right now, though - of course a lot of people are investing in it when it is gaining legitimacy.
Just like with bitcoin.
The difference is that USD, Euro, Yen, etc are all trillion dollar markets, where BTC is measured in millions. The speculative market pushes around the valuation a lot more, and BTC swings a truckload more from trading in its exchange rates than any other currency - changes in the Euro are measured in cents over a year, not in a hundred dollars over 6 months.
I won't argue people are buying BTC to use for exchange right now, though - of course a lot of people are investing in it when it is gaining legitimacy.
It seems like you have more of an issue with the Bitcoin evangelists moreso than Bitcoin itself. I bought a few Bitcoin because I find the idea fascinating and like to see how the system works -- more to be a part of an experiment than to do actual business, but anyone who thinks that Bitcoin is ready right now as an alternative to fiat is out of their mind.
You are probably right. While I am cynical in my judgment of the current state of Bitcoin I am optimistic in the theory as a whole, maybe too much so. I love the idea of a decentralized currency and see it as part of the natural evolution of globalization. Maybe I can afford to lose a little ...
I'm pretty sure that Grade A bonds, CDs, and IRAs, among few others, accounts are the only types of investments that one should consider putting more money then they're willing to loose into.
Bitcoins is a ForEx market, and like any ForEx market, you can lose money, quickly.
Bitcoins is a ForEx market, and like any ForEx market, you can lose money, quickly.
Technically speaking, an IRA is just a (brokerage|bank) account with a special tax designation. It won't stop you from putting all your money in a penny stock or out of the money options, for example.
Ah. I thought they were a combination of various things that made them fairly stable, or more so than a 401(k) anyway. Thanks for the clarification.
Unless you do most of your financial transactions in bitcoin, you're treating it as a speculative investment.
If you're buying bitcoins in order to make an online purchase, you're using it as a currency.
If you're buying bitcoins, then selling them back to dollars/whatever when you need money, you're treating it as speculation.
If you're buying bitcoins in order to make an online purchase, you're using it as a currency.
If you're buying bitcoins, then selling them back to dollars/whatever when you need money, you're treating it as speculation.
The lag of six or seven seconds before a trade is executed "is not acceptable,"
I don't understand what a DDoS has to do with trade lag. They're DDoSing the website, not the trading engine, right?
6 or 7 seconds is bad enough, but it's a huge understatement. MtGox's trading engine "lag" can grow to absurd numbers, it was like 10 minutes a couple days ago. I honestly can't comprehend how it gets this bad. It should be on the order of micro or milli seconds. It's not like matching up trades is computationally expensive.
Anyone have an explanation?
I don't understand what a DDoS has to do with trade lag. They're DDoSing the website, not the trading engine, right?
6 or 7 seconds is bad enough, but it's a huge understatement. MtGox's trading engine "lag" can grow to absurd numbers, it was like 10 minutes a couple days ago. I honestly can't comprehend how it gets this bad. It should be on the order of micro or milli seconds. It's not like matching up trades is computationally expensive.
Anyone have an explanation?
I would hope not, but this makes me skeptical. Does this mean that the trading engine and the website are the same entity?
Yes, they are.
They currently have a project underway to separate the two.
The site owner, MagcialTux, said yesterday in irc that for the last couple of years (since the first bubble) they've basically made barely enough revenue to keep the site running (and sometimes at a loss), much less improving it. They looked at loans, but the most they could arrange was a couple hundred thousand, which wouldn't have been enough apparently. They also privately contacted big bitcoin fortune holders for loans, to the same result.
The kind of people that you'd hire to make it work right are expensive, to no one's surprise. The last few months have given Gox a huge increase in revenue, and they're using it to finally upgrade their tech.
I'm not a Gox fan, and I wish people would use the other exchanges and get some diversity into the system, but I can understand how they got where they are.
They currently have a project underway to separate the two.
The site owner, MagcialTux, said yesterday in irc that for the last couple of years (since the first bubble) they've basically made barely enough revenue to keep the site running (and sometimes at a loss), much less improving it. They looked at loans, but the most they could arrange was a couple hundred thousand, which wouldn't have been enough apparently. They also privately contacted big bitcoin fortune holders for loans, to the same result.
The kind of people that you'd hire to make it work right are expensive, to no one's surprise. The last few months have given Gox a huge increase in revenue, and they're using it to finally upgrade their tech.
I'm not a Gox fan, and I wish people would use the other exchanges and get some diversity into the system, but I can understand how they got where they are.
6, 7 seconds? Few days ago there was a 1 HOUR lag. I am not kidding. All MtGox APIs have lagged a whole frickin' hour behind their trading engine. Now THAT was bad. And I see more than 60 seconds lag nearly every day.
Edit: Seems you updated the post, so now my is obsolete :).
Anyway, their official explanation is that the engine is so slow because when iterating over the whole orderbook, which is huge, they have to check if every offer has enough funds for it to be executed. This is a design flaw and they want to fix it by not letting you to place a order without sufficient funds in the first place.
Edit: Seems you updated the post, so now my is obsolete :).
Anyway, their official explanation is that the engine is so slow because when iterating over the whole orderbook, which is huge, they have to check if every offer has enough funds for it to be executed. This is a design flaw and they want to fix it by not letting you to place a order without sufficient funds in the first place.
That sounds like terrible software engineering and doesn't inspire confidence.
Actually for them it's a feature, and there is an API call for that: http://mtgox.com/api/1/generic/order/lag
Currently: "lag_secs":85.319123
Now: {"result":"success","return":{"lag":588717,"lag_secs":0.588717,"lag_text":"0.588717 seconds"}}
What is bad is that sometimes you can't cancel a bid or an offer and you end up selling or buying something you didn't want.
Well that's actually bad if you day trade... which is kinda bad for the currency anyway.
Well that's actually bad if you day trade... which is kinda bad for the currency anyway.
[deleted]
Anyone remember EFNet IRC in the mid-1990s? Bitcoin is going to be like that, except real money is at stake.
I remember EFNet allright, but I've still no clue what you're talking about.
At least to my understanding, EFNet was (is?) an IRC network. With channels. Where people chat. Maybe I missed some relevant history?
At least to my understanding, EFNet was (is?) an IRC network. With channels. Where people chat. Maybe I missed some relevant history?
Basically, the old IRC protocol was pretty brittle. You could break the network with DDOS attacks, exploits, etc. in order to get "ops" on IRC channels. This resulted in a sort of emergent hacker game called channel wars. Massive attacks were constantly being launched, to the point that running an IRC server became a way to have a serious target painted on your connection.
Oh yes. Now I remember EFnet in the 90's.
I think he's remembering #e or something like that, where I spent a great part of my childhood (before it moved to Freenode and forked to #gah) where things happened before the public knew, such as VA Linux, E17, offended.co.uk (author of feh), and MythTV.
And ferite. (a c-like scripting language that I love, with regex's)
And ferite. (a c-like scripting language that I love, with regex's)
[deleted]
I'm still banned for life from EFNet for some mid 90's transgressions.
Because what is "Mt. Gox"???
https://encrypted.google.com/search?q=Mt.+Gox
https://mtgox.com/ "Mt.Gox is the world's most established Bitcoin exchange."
https://encrypted.google.com/search?q=Mt.+Gox
https://mtgox.com/ "Mt.Gox is the world's most established Bitcoin exchange."
It's a Magic the Gathering Online card exchange.
Does anyone had a withdrawal request processed by Mt.Gox during the last days?
I requested 2 withdrawals more than a week ago and didnt receive any funds nor do the requests show up in my account history...
I requested 2 withdrawals more than a week ago and didnt receive any funds nor do the requests show up in my account history...
Largest DDoS attack? A mighty claim without any numbers. I thought we just had the largest attack on Spamhaus the other week anyway? Oh well, I quit tech news stories.
I assume against Mt. Gox.
Bitcoin makes for some great speculation, but I absolutely cannot treat it as a currency until the prices stabilize independent of the exchange used.
Are there patterns in flow traffic that monitoring tools could help detect/mitigating a DDoS like this?
It's a bird....It's a plane...It's Cloudflare!
Edit: Oh they're already using it? Guess they can't save the day then... MtGox seem to be up now though.
Edit: Oh they're already using it? Guess they can't save the day then... MtGox seem to be up now though.
Most Bitcoin websites, Mt. Gox included, are already behind CloudFlare. Worryingly, this means they have surrendered their SSL private keys to a secondary company.
Worryingly, indeed. To me it appears that the "cloud" is the next bastion of centralization and "too big to fail"s. In this case, instead of providing services in a decentralized fashion that makes it hard to attack, they hide behind ever larger and stronger behemoths.
In the case of cloudflare there is no great data loss if they disappear, though they could intercept passwords and private data (can you trust them? who has access? what if they are hacked?). But when a service such as gmail (suddenly) disappears... it would be devastating to many people. Much like the failure of a bank.
In the case of cloudflare there is no great data loss if they disappear, though they could intercept passwords and private data (can you trust them? who has access? what if they are hacked?). But when a service such as gmail (suddenly) disappears... it would be devastating to many people. Much like the failure of a bank.
Yeah, but you also already have to trust the certificate authority, your ISP, your employees who have access to the server...the list goes on.
Furthermore, I believe the way it works is that clients make an SSL connection to CloudFlare, who makes another SSL connection to your service (using different key pairs.) Granted, they still get to see all your traffic unencrypted, but it all just comes back to trust.
Furthermore, I believe the way it works is that clients make an SSL connection to CloudFlare, who makes another SSL connection to your service (using different key pairs.) Granted, they still get to see all your traffic unencrypted, but it all just comes back to trust.
SSL is end-to-end; the ISP is just one more untrusted carrier. And I would expect MtGox to have access controls around employee access to their servers. Both MtGox and their certificate authority have much stronger incentives to play nice than CloudFlare do.
"Hosting provider" probably was meant more than ISP.
One thing with Bitcoin that still needs to be decentralized is the exchanges. This shows again that mtgox is the achilles heel. Sure, there are many other exchanges and ways to sell/buy, but it's telling (and sad) that DDoSing mtgox is an effective price manipulation method.
As the stakes grow higher Bitcoin is turning into an interesting endeavor in building resilent systems and preventing Single Points of Failure.
As the stakes grow higher Bitcoin is turning into an interesting endeavor in building resilent systems and preventing Single Points of Failure.
It is already decentralised in the sense that there are plenty of alternatives, and there are "over-the-counter" places like Bitcoin's #bitcoin-otc.
I know that. But for some reason there is an extreme reliance on mtgox for price information. Even trades in -otc are usually based on the mtgox price. So maybe I worded it wrong, it's not so much trade that is centralized but the trade/price broadcasting.
Ah, I see. Well, there are some sources that aggregate data, like Bitcoin Charts:
http://bitcoincharts.com/markets/
http://bitcoincharts.com/markets/
Agreed. Still, bitcoincharts is a centralized site too, and could be DDoSed, overloaded, blocked, etc.
Maybe ticker/trade data could be spread over a gossip network as well. That's not as trivial as it sounds, though, for example how to check that trades are real and not just spam/manipulation. Maybe some way of authenticating exchanges by signing the packets (but then -otc would be left out... maybe their reputation system could be integrated somehow).
Maybe ticker/trade data could be spread over a gossip network as well. That's not as trivial as it sounds, though, for example how to check that trades are real and not just spam/manipulation. Maybe some way of authenticating exchanges by signing the packets (but then -otc would be left out... maybe their reputation system could be integrated somehow).
[deleted]
The reason for a lack of easy to use exchanges is the artificial cost of entry. You cannot simply set up a website to trade coins for money with some friends because of licensing, regulations, capital requirements etc. If you were free to move your money how you want on the internet without questions asked, we would have many exchanges (and probably wouldn't need Bitcoin in the first place).
This is one of promises of Ripple. It will be interesting to see how it plays out.
> What can you do?
> Like our favorite author here at Tibanne says… Don’t Panic!
> “Panic-selling is a wide-scale selling of an investment which causes a sharp decline in prices.[...]” (Source: Wikipedia)
But... But I want it to crash! Just a little! So I can finally buy lots of bitcoins myself!
> Like our favorite author here at Tibanne says… Don’t Panic!
> “Panic-selling is a wide-scale selling of an investment which causes a sharp decline in prices.[...]” (Source: Wikipedia)
But... But I want it to crash! Just a little! So I can finally buy lots of bitcoins myself!
I want it to crash too! Like, drop to half the price and then http://3.bp.blogspot.com/_JZ0rN-zdg2M/TU_NRnvhGfI/AAAAAAAAAF...
I don't think it can crash anymore. Not like the last time anyway. Too many people know that the price will go back again and want this to happen. (me included)
What that means in practice is that some people will buy after 5% drop, more after 10%, even more after 15%, etc... I don't believe anymore that we can have a proper crash in this situation. If we do, the price will bounce back in a matter of seconds. I'm probably not the only one keeping an open order to buy as many bitcoins as possible at below £5. Lack of sell-stop orders on mtgox also means there's nothing to balance them out (apart from automatic trading).
What that means in practice is that some people will buy after 5% drop, more after 10%, even more after 15%, etc... I don't believe anymore that we can have a proper crash in this situation. If we do, the price will bounce back in a matter of seconds. I'm probably not the only one keeping an open order to buy as many bitcoins as possible at below £5. Lack of sell-stop orders on mtgox also means there's nothing to balance them out (apart from automatic trading).
A lot of people wanted tulip prices to rise again, as well.
I agree on the bubble phase being similar, but disagree on what would happen afterwards. Tulips becoming cheap meant that everyone suddenly had access, but the amount was still more limitted than in case of BTC. Also the time of each transaction was not even close to what happens at mtgox. There are thousands of orders just waiting to be filled the moment the price moves. On the other hand physical goods shipment took weeks/months.
So while both events may have a similar cause/progress... there's a huge difference in how the market itself works.
So while both events may have a similar cause/progress... there's a huge difference in how the market itself works.
Actually they would trade tulip futures and, critically, options, which allowed for quick trades and leveraged speculation.
Any day now
to me, the surest sign of an impending crash is when people start to think something is infallible
You should really photoshop those dollar signs into bitcoin symbols.
I don't doubt for a minute that the authorities find this amusing since they would no doubt rather a currency outside anyone's jurisdiction got established and so people who destabilize it are "friends" of a sort. That makes them less likely to intervene.
That combination makes BitCoin sort of like [1] Eve Online, but with drugs instead of spaceships. I wonder if this will lead to the creation of 'recovery agents' like the art world has, usually former thieves or investigators who work for insurance companies for a percentage of the recovered value.
[1] in the sense that you can scheme and plan large takeovers and heists and the "outside" world doesn't care.