MTGox, we discover, was the victim of an internal leak of their database. They were not hacked, and they are the victims of a criminal act of theft.
The facts in this matter do not concern the people who are gloating over this event. There are a group of people who are violent in nature, and who despise Bitcoin because they understand exactly what it represents; a direct threat to their sick and violent society which is based on coercion, the absence of freedom and the application of force.
Imagine a world where everyone had access to personal force fields via an artificially created gland that was made to grow into their abdomen by a nano machine / virus. These force fields could be activated either by the fear response or by the direction of your will, in the same way that you use your will to direct your arm to throw a ball.
Everyone would be able to protect themselves from any sort of physical attack, and all would be able to use similar technology to protect their houses.
It would then immediately become impossible for the State to send their agents to your house to rob you with bailiffs. They would no longer be able to force you to pay anything that you did not want to pay, and you would be able to protect yourself and your property from the other criminals and predators that are not sent out by the State.
In such a world, all flows of money would be voluntary by default. There could be no coercion of any kind, since violence against the person and her property would have been abolished by the advent of force fields.
The entire world would switch from one based on violence to one based on voluntary exchange.
This is exactly what Bitcoin is doing.
It is going to make it impossible for the state to stop people transacting at a distance, in any amount that they choose. It is going to remove the State from the equation as the unwanted third party in all transactions.
This is the true source of the animus against Bitcoin, and it explains why people like Tim Worstall and the other writers are dismissing Bitcoin so flippantly. Here is what I am talking about. These are quotes from an article by Tim Worstall that has just appeared:
The Bitcoin community faced another crisis on Sunday afternoon as the price of the currency on the most popular exchange, Mt.Gox, fell from $17 to pennies in a matter of minutes. Trading was quickly suspended and visitors to the home page were redirected to a statement blaming the crash on a compromised user account. Mt.Gox’s Mark Karpeles said that the exchange would be taken offline to give administrators time to roll back the suspect transactions.
Tim Worstall asserts that Bitcoin is finished because a single exchange has technical problems if this is the level of expertise operating at Forbes, you might be forgiven for taking everything that they publish with a big pinch of salt. There is no relation between the fictitious ‘Bitcoin community’ and MTGox, in fact, its a stretch to assert that there is a Bitcoin community at all. Is there an ‘internet community’ simply because people who peer on the network can send email to each other?
Not a good start!
For the record, Tim Worstall works as a consultant and dealer in scandium and other exotic metals. We can assume that he knows a little about how exchanges work, that there is normally more than one exchange for every commodity, and that you can get a feel for the price of a commodity not by looking only at one exchange, but by looking at them all at the same time.
He must also know that Bitcoin is in its infancy, and as other exchanges open, the problem of a single exchange running into difficulty will greatly suppress the triggers that initiate widespread panic. He should also know that a single technical fault in an exchange cannot be translated into a true loss of value in whatever it is the exchange deals in.
These fundamental facts and logic must be known to him, so why has he written this piece? What is the purpose of it?
The initial problem leading to the price collapse was that one user tried to sell more than the market could absorb. For of course the value of anything is determined by the balance of supply and demand for it. Thus the price crashed (and you can see a chart of how quickly it did here). However, it appears that this isn’t the only problem:
This demonstrates Mr. Worstall has at least a basic grasp of economics and how markets work. What he does not tell you, is that the sales were made not by one user, but by over 400 users simultaneously, who were all being controlled by a single attacker. Facts are stubborn things. Had this breach not taken place, the quoted price for Bitcoins on MTGox would not have dropped as it did. Worstall cannot distinguish between a wrongly quoted price and the true price of a commodity in a market.
Since I began writing this, it has emerged that details of more than 60,000 users have been stolen from the Mt Gox exchange. The compromised information includes hashed passwords.
No, the doesn’t necessarily mean the end of the Bitcoin experiment, but it’s a pretty good indication of it.
This is a baseless assertion, which other violent Statists will use in a faulty appeal to authority attack (“it came from Forbes, a trusted source”) against Bitcoin.
This event is not an indication of anything, other than that some of the user accounts at MTGox were exposed. If we apply this faulty logic to the other recent mass disclosures of usernames and passwords, we should expect Worstall to come up with similar nonsense lines:
The recent hack of SONY, where the credit card numbers, dates of birth and real names of TWENTY FIVE MILLION users were copied…
The recent hack of SEGA…
The loss from HM Revenue and Customs…
- So, That’s the End of Credit Cards Then
- So, That’s the End of SONY Then
- So, That’s the end of SEGA Then
- So, That’s the end of Her Majesty’s Government Then
Do you see what I did there?
Take a look at this if you want to gain some perspective on the matter of large scale data breaches, something that the Tim Worstall’s of this world seem to lack:
The MTGox event doesn’t even appear on the radar.
While we are at it, in the case of Parliament, the breach of the government data really should have instantly spelled the end of ContactPoint and the ill conceived, ill fated ID Card, but of course, it did not. Also, the breach of 25 million credit cards should put pay to the Coalition’s absurd plan to use credit cards as ID Cards to access government gateways. We have written about this recently:
Credit card fraud is rampant, and using credit cards to interface with the state will allow everyone with a fraudulent or duplicated credit card to masquerade as someone else when identifying themselves to a government portal.
Look no further than the recent SONY breach where the credit card details, dates of birth, names and addresses of SEVENTY MILLION people were copied.
The population of Britain is 61,838,154 – 2009 That means that a number of people, larger than the population of Britain had their credit card details copied.
It means that if such a thing happened in the UK, every single person who identifies themselves to the state with their VISA could be impersonated with ease. This means more benefit fraud, GUARANTEED.
but that is another story.
The fact of the matter is that writing irrational pieces like this cannot be an accident. This is not an opinion piece, though the hatred of Liberty oozes out of every vowel. I want to know who is directing these drones to write hit pieces against Bitcoin. I am not the only one (not that that means anything in and of itself) to suspect that the organised chorus of anti Bitcoin propaganda, and it is propaganda, is just too perfectly in tune to be the random warbling of computer illiterates. Or maybe they are all perfectly brainwashed to the same tune piped out by the Government schools and State mandated curricula? Who knows?
Here is another piece in the key of Fail; Fortune ran this piece recently which everyone can see is a, “…thrown together and completely fact-optional piece. Seriously, this reads like somebody who spent 2 hours reading other news coverage headlines and decided to fill in the rest with make-believe.”
The mainstream media and its gatekeepers have a terrible problem on their hands. They cannot tell a story without directing people to the facts that will disprove their propaganda. They are only a click away from every hit piece they write.
Anyone with curiosity can Google Bitcoin for themselves, download it and then run it. They can start accepting Bitcoins. They can integrate it into their websites and start getting paid for anything that they do.
Once they get a first hand feel for it, the lies that are being propagated about Bitcoin are instantly washed away. As more people use it, and the client improves, it will become harder and harder to lie about Bitcoin, and then the MSM drones will have to capitulate and start accepting it themselves. Once this happens, it will be forbidden by the editors of these rags to write an anti-bitcoin piece, because they would be being paid in Bitcoins themselvs.
That will be the tipping point; just as the newspapers all decided they needed to have online editions of their lie machines on the internet, and when they adopt anything, like social networking and Twitter feeds, eventually they will all have to accept Bitcoin or its successor. This is absolutely inevitable. For those that are interested, all of the websites of the newspapers are running some sort of Open Source Software. They might not like the economics or the philosophy of ‘free’ but they are all using it to spread their lies.
Forbes.com is running Apache on Linux and so is fortune.cnn.com. Both of these organizations would have railed against Open Source software from every possible angle, with FUD, “its not as secure as proprietary software”, “the business model cannot work”, “its not ready for the desktop” etc etc, and yet, they have all capitulated, and no one even discusses it any more, save to note how far and wide the software is spreading.
This is how these people operate.
First they ignore you, then they laugh at you, then they fight you, then you win.
We are at the ‘ha ha’ stage now. It is only a matter of time before Tim Worstall or some other hack calls for Bitcoin to be banned or regulated. And for the record, you can replace Tim Worstall’s name with the name of any journalist that has written a piece like this. Even people who claim to be scientific in their thinking manage to write garbage about Bitcoin. They all share the same attributes (lies) and one is replaceable with any other, and the newspaper name or slant doesn’t matter either. I could cite dozens of shabby articles, but why bother, they are all pretty much identical in theme, deception, sneer and ignorance.
For there are certain things that we want from a currency. A medium of exchange, a store of value, we’d also like to it be liquid and security is important as well.
Once again, we have the ever present WE of the collectivists. What Worstall means by ‘security’ of course is the unfettered ability of the State to be able to interpose itself in all transactions so it can tax. Without it, his beloved collective dies, and Bitcoin is the first actual financial tool that could pull it off. This is why everyone who loves and lives by the State, its predations, its illegitimate regulations, its stolen loot, its bureaucracy and all the other vile stuff in its ecosystem where violence is the lubricant, hates Bitcoin with a passion.
With Bitcoin, people have the choice to opt out of their sick society. Bitcoin is the force field that protects the individual’s money from the State. Its mass adoption would collapse the income of the State, forcing it to completely re-assess its relationship with people everywhere. On a side note, we can expect the State to ramp up the violence to eleven on the dial, before they throw in the towel.
No currency can have all of these features (and humans have used some pretty odd things as currency over the centuries, from copper sheets to cowrie shells via butter, salt, gold, silver and even pieces of paper with Dead Presidents on them, surely the final lunacy?) to perfection but a currency which doesn’t have any of them in appreciable quantities isn’t going to last very long.
This is simply not true. There can be a currency that has all of these features; just because you cannot imagine it that does not make it so. Three years ago, anyone you asked would have told you that the double spending problem could not be solved, because digital files are infinitely copyable. Lo and behold, a single man with a vision has solved the problem and his solution has applications beyond currency. Computer illiterate collectivists cannot even begin to see the sort of world that would emerge out of the idea behind Bitcoin. No matter. The world will change wether they like it or not.
As for odd currencies lasting a long time, did you know that the longest running currency was the tally stick? A strip of wood with notches cut in it that was then split in half; one half being spent out and the other reserved by the issuer.
The tally stick system lasted seven hundred years as a form of money.
Bitcoin can be used to send stored value across the world, in the same way that tally sticks were used. It can last a long time, and bring many benefits to the people who use it. Bitcoin, and the ideas that drive it are in no way ‘over’.
Bitcoins aren’t secure, as both the recent theft and this password problem show.
This is simply false, and betrays a complete ignorance of what Bitcoin is and how it works. All of the problems that have been falsely attributed to Bitcoin have not been a problem with Bitcoin itself, but have instead, been directly related to the platforms in which it is being used.
MTGox had a problem with their physical security; nothing to do with Bitcoin itself. The man who lost 50,000 Bitcoins had them stolen from a laptop running Microsoft Windows, either by physical access or remotely by a Trojan; nothing to do with Bitcoin itself.
Even if someone finds a flaw in the Bitcoin client, the idea of it is sound and has changed everything forever.
More people today are thinking about what money is, and understand what Fiat Currency is and how it is evil and institutionalised theft. That is thanks to Bitcoin. More people today have a real grasp of how simple money transfer over the Internet could and should be, if only the State would get out of the way. That is thanks to Bitcoin.
PayPal and the Credit Card companies and their processors are shaking in their boots; you will never have your Bitcoin account frozen. You do not have to make any declaration of any kind, swear an oath, divulge personal information or suffer any State mandated humiliation to start receiving and spending Bitcoins worth millions of dollars. There are no artificial limits on how much Bitcoin you can receive and spend, and where you can spend it and what on. The only loser in all of this is the State and its army of cronies, clients, parasites and thugs.
The next Rebecca Black on YouTube will put her Bitcoin address in the description, and she will reap millions from her fans… even the ones who hate her.
Actually, thats an argument against Bitcoin, sorry.
They’re not liquid, nor a store of value, as the price collapse shows and if they’re none of those things then they’ll not be a great medium of exchange either as who would want to accept them?
This is, of course, nonsense. Lets take it one by one:
“They are not liquid”
What Does Liquid Asset Mean?
An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.
Bitcoins, are becoming more and more liquid every day. You can trade them in the street, and there are services popping up that help you find people who want to sell or buy Bitcoins close to you, using geolocation.
“nor a store of value”
This is demonstrably false. If you can spend Bitcoins, they are a store of value by definition, just as the tally stick was, just as gold is and paper money is. This is nonsense on stilts, and we have addressed this before when we took apart Grant Babcock’ assertions.
“as the price collapse shows”
There was no price collapse, this is a falsehood. MTGox, a single exchange, suffered a technical problem not related to Bitcoin itself, and the price recovered immediately. The trades are going to be reversed where possible, and as you can see in this video:
the price at that broken exchange recovered. This is not reporting, or real journalism. It is utter rubbish.
“they’ll not be a great medium of exchange either as who would want to accept them?”
You can file this under the same nonsense like, “guitar bands are finished” (Beatles) or “no one wants internet access, because no one is on it yet”, or “the internet will amount to nothing” Clifford Stoll.
Note, attentive readers, that Clifford Stoll’s famous, “it will never catch on” piece appeared in Newsweek, a world class mainstream media lie machine, with a vested interest in killing anything that stops people from being free, reading the truth or from them selling dead trees. They have been dragged kicking and screaming into the future…. but you know this!
True, Bitcoin does still offer anonymity:
Not really, but why should we expect you to get this right?
but then so do copper sheets to cowrie shells via butter, salt, gold, silver and even pieces of paper with Dead Presidents on them.
There are moves afoot and plenty of evidence to prove you wrong Mr. Worstall. Just ask this gentleman who was stopped at an airport simply because he was carrying his own money. So much for the anonymity of cowrie shells and fraudulent pieces of paper with Dead Presidents on them.
It’s difficult to see what the currency has going for it.
Its only difficult to see what Bitcoin has going for it if you are an ignoramus in the literal sense of that word.
If you understand how cash works, then you should understand what Bitcoin offers its users and what it has ‘going for it’. But I think this article’s author knows full well what the potential of Bitcoin is, which is exactly why he has written this piece as he has.
No one born in 1963, who writes for ‘newspapers” and trades metals as a profession doesn’t know what the internet has done for man. People like that have experienced the internet revolution first hand, as it has transformed the way everyone works, plays, communicates, learns, spends money and thinks.
Bitcoin, its future iterations and its inevitable successors, are going to change the world again, in ways that are very difficult to predict, though we can have a crack at it for fun. It is a fact that Bitcoin already has changed the world.
One thing you simply cannot do in the face of something like this is intone, “it will never work” or “I can’t see the point in it”. These sorts of predictions, especially when they are related to technology are almost always wrong or short sighted, and in today’s day and age, with all of the experience of the last two decades under our belts, such an attitude is inexcusable stupidity.