195K Bitcoin Transaction 167
First time accepted submitter saidi writes "The Washington Post reports that yesterday a truly massive Bitcoin transaction occurred, from the article: 'In this particular transaction, bitcoins from 15 different Bitcoin addresses were consolidated and sent to address 12sENwECeRSmTeDwyLNqwh47JistZqFmW8. The size of the transaction? 194,993 bitcoins. Given that one bitcoin is worth around $800 right now, the transaction is valued at more than $150 million.'"
A researcher did a bit of digging, and it appears that this was the Bitstamp exchange moving their balance around (business appears brisk).
Ghost transactions (Score:5, Insightful)
This is an excellent example of traffic analysis and how you can leak your identity based just on the nature of the transaction. It makes me wonder why bitcoin users do not routinely engage in 1:1 transactions simply to frustrate traffic analysis.
Re:I think I will stop reading slashdot....... (Score:5, Insightful)
To be honest, Slashdot and http://phys.org/ [phys.org] are by far, my favorite websites for interesting stories news.
However, I am getting tired of fucking bitcoin stories. Enough is enough.
You don't have to read the summary. You don't have to click on the links. You don't have to post annoying comments. In fact, I think slashdot will be better if you do stop "reading" it.
But, yeah, I'll give you that there are way too many bitcoin stories...
Re:Ghost transactions (Score:5, Insightful)
I don't understand why people keep assuming Bitcoin is designed to be anonymous. It isn't.
Re:I think I will stop reading slashdot....... (Score:1, Insightful)
It is the first new currency since the Euro that actually matters worldwide. Its value only is going to go up as China moves into it, so it will be touching part of everyone's life eventually in one way or another. Plus, it can only go up in value as people pour real value into the coins, and there are fewer and fewer coins being minted.
Expect it to hit $10,000 soon per coin.
Re:Can someone explain bitcoin banks to me? (Score:5, Insightful)
Why are people trusting their coins to a bank?
Well, here are the reasons that we have to keep national currencies in the bank:
1) Because it's hard to guard your cash all day and all night.
2) Because the bank pays you interest.
3) Because the bank gives you the ability to send and receive money using checks, transfers, money orders, cards.
All these reasons (except #2) are valid in case of BTC. The more backups of your wallet you make, the more likely it is that one of them gets exposed to a thief. The fewer backups you make, the more likely it is that you will lose your wallet forever. A bank does not keep your money in a wallet, though they have deposit boxes for other items. If you deposit your BTC into an account, the record states that the bank owes you so many BTC. You have a copy of all transfers of that money, in or out. Loss of wallet is immaterial. Theft of wallet is immaterial. If the paper says you have 10 BTC in your account, that's what you will get. If someone sends you 20 BTC, you do not need to fiddle with blockchain and confirmations - as soon as your bank says you have the money, you have the money. The bank isolates the customer from the technicalities of running BTC clients. Add credit cards and checkbooks, and you can pay with BTC just as you pay with USD or GBP. Credit cards will be swept instantly (and not in 15 minutes.) The latter is, actually, very important because the raw BTC is ill-suited for small, numerous transactions that have to complete within seconds.
Re:Ghost transactions (Score:5, Insightful)
Even more than not designed to be anonymous, it's specifically designed to have a global, completely public transaction ledger. That is more or less the core of the design. How do you have "accounts" without a central server keeping track of them? The Bitcoin solution is a public ledger that all clients agree on. This public ledger then has an update mechanism designed in a way that's intended to make it so you can add transactions to the public register iff you have the private key of the account the transaction is "from".
Of course, you can try to keep your RL identity from being associated with a particular account number, but Bitcoin's design makes no specific effort to help you do so: the transaction graph is public, for anyone to do any kind of analysis they want.
Re:Ghost transactions (Score:5, Insightful)
Indeed on all points, and I'm still trying to figure out why people keep making the assumption that identity protection or obfuscation measures of any sort are part of the protocol. Maybe it's the "crypto" part of "cryptocurrency" that causes some kind of automatic correlation, although if that were the case one would think that the widespread use of cryptographic mechanisms for identity verification might encourage the opposite assumption.
Re:Ghost transactions (Score:4, Insightful)
Wouldn't traffic analysis easily cancel out normal 1:1 transactions? You gonna have to go the extra mile if you really want to stop traffic analysis. And why would you do that? Paper currency is still way better for anonymous transactions.
Paper?
In regards to the referenced transaction, $150 million in $100 bills weighs over 1.5 tons.
Hate to say it there Mr. Cash Anonymous, but that ain't gonna fit in your carry-on.
And you might raise a few questions as to why you're filling half the cargo hold. National headlines is hardly a way to keep the transaction anonymous.
In the meantime, this public-broadcasting test of the Bitcoin transcation network has been a success. Hardly anyone noticed.
Now is when the real money starts getting pushed through.
Re:Ghost transactions (Score:5, Insightful)
What do you mean "hardly anyone" noticed? It made a Washington Post article, plus a front-page Slashdot story. I'm pretty sure that anyone who anyone might worry about noticing has noticed aplenty (obviously, this transaction was not trying to avoid notice).
For Big Cash transactions, there are of course monetary vehicles in larger than $100 denominations --- all sorts of bonds/cheques/etc. that are good for deposit by bearer at any of the major financial institutions for the convenience of their mafia customers. Cash money laundering, or electronic equivalents like the several billion dollars worth of South American narco-cartel money that Chase Bank assisted in moving around, is still an option in wide use.
Re:a skeptic says "wow bitcoin is serious ". Hope (Score:3, Insightful)
I've poo-pooed Bitcoin before.
I'll keep poo-pooing it.
How can anyone set prices in bitcoins? You might offer to sell some good or service for 1 bitcoin. Then, a week later, your potential customers are laughing at you saying "one bitcoin for THAT? WOW talk about over priced, thats ridiculous!" and then they will buy from someone else.
Bitcoins simply cannot be used as a medium of exchange for goods and services.
If you look at how much a good or service costs in bitcoins you are probably and reasonably going to make a mental conversion into 'real' currency. Each week those goods and services effectively cost more and more.
The seller has a choice; post a stable price in bitcoins or post a (constantly adjusted) realistic price in bitcoins.
Ie in order to sell things in bitcoins and maintain a realistic price you have to keep charging less and less of a bitcoin. If you post a price in bitcoins and don't continually adjust it downward anyone who wants to buy and doesn't already have 'old' bitcoins is going to look at how much they now have to spend on bitcoins just to pay for your goods/services and, probably, think twice about it and probably go somewhere else.
How big a proportion of people who use bitcoins mined them themselves? How big a proportion got those bitcoins through selling goods/services for them? How big a proportion bought the bitcoins with 'real' currency? My guess is that most bitcoin users pay for them with another currency and these people are not going to use them to buy and sell; they are going to hoard them.
Therefore, bitcoins are useless for anything other than speculation which was not the original intention of the system; it was intended to be used to buy and sell services. Therefore bitcoins are now useless for their intended purpose.
WTF happened here? Has the bitcoin been deliberately sabotaged? Or is this just an unintended consequence? Do we need a new virtual currency that won't devolve into this and stay useful?
Re:Ghost transactions (Score:4, Insightful)
500 Euro banknotes are readily available.Wikipedia notes [wikipedia.org] "Approximately 580,593,400 €500 notes in circulation around the Eurozone.[61] That is approximately €290,296,675,500 worth of banknotes."
Interestingly, there only "Approximately 188,575,200 €200 notes in circulation around the Eurozone.[61] That makes it the least used banknote of the Eurozone. That is approximately €37,715,031,400 worth of banknotes.[61]"
My guess is that the 500 Euro note has special value among those who habitually exchange briefcases of currency.
Re:a skeptic says "wow bitcoin is serious ". Hope (Score:4, Insightful)
Thats kind of what I mean; you can't set prices in bitcoins. That impacts the bitcoins utility as a practical unit of currency.
Re:Can someone explain bitcoin banks to me? (Score:3, Insightful)
Remeber, if one bank gets ripped off and stolen, there is literally nothing that they can do to get your money back. Hope you're enjoying the ride.
I personally don't own BTC, and consequently don't store them in banks. But as the OP indicates, quite a few people do both. I believe they will be eventually separated from their money - in part because these "banks" are not regulated, and in part because extremely fast deflation of BTC (currently caused by speculation) makes BTC useless as a stable coin. IMO BTC should be compared to tulip bulbs [wikipedia.org].
Re:a skeptic says "wow bitcoin is serious ". Hope (Score:4, Insightful)
Right, which is what I'm getting at; the bitcoin is useless as a 'coin' that you can buy and sell goods and services for. Its only use at the moment is speculation.
You can't set prices of goods and services in terms of 'thinly traded commodities subject to massive speculation'.
You can't put bit coin price tags on things, this would be completely impossible. Yet I see this often online.