Yeah, that site it looks like a scam allright.  Those deposits are probably spam to attract visitors to their site.  I saw posts complaining of another company (perhaps the same?) doing the same thing, a month or so ago.

Perhaps he sold the bitcoins at discount to a mafia guy who sold them to a dubious businessman who sold them to a regular businessman who is now trying to cash out?

I suppose that Metcalfe and his critics have written enough of them already. 

Seriously, are we supposed to start every question with "seriously", from now on?

The genesis block of the blockchain that "Satoshi" started on 2009-01-03 includes a newspaper headline.  Its purpose was to prove that the blockchain was not not created before that date (which could give the creator certain unfair and potentially dangerous advantages over other miners.)  The headline is from the British newspaper "The Times", 2009-01-03.  The choice of a British newspaper could be a deliberate ruse to hide his location; but could also be the newspaper that he had at hand.

"Satoshi" could be a team, and perhaps a government team. The "completeness" of the design, with all conceivable problems solved in some way or another, reminds me of the Stuxnet virus.

This theory could explain why none of "Satoshi"'s known coins have been spent yet:  having been mined as part of their job, they are government's property and not "Satoshi"'s.

You are kidding, right?AFAIK, Jon's knowledge of computer science is not compatible with the style and contents of "Satoshi"'s paper.

Phinneas = Gleb = Bruno was pulling a prank with his original post.  Check this thread, a couple of pages after that.  His aim was to have people look search the blockchain for 100 k$ donations to the TBF.  AFAIK, none has been found. 

No, just those who try to swindle others by selling them shares of dry oil wells, water-powered cars, ponzi schemes, etc..

No sane person would invest in cash, unless the money came from some illegal activity, or one is trying to evade taxes.

Real estate, and stocks of large, established and diversified companies are usually a safe investment.  Even if they are overpriced at some point, and may crash eventually, there is a limit to how much they can go down before hitting their fair price.  Since they are material property, their real value will not be affected by inflation.  For those who are too lazy or small to use those investments, there are many bonds and investment funds that are somewhat riskier and offer smaller returns, but will still protect from inflation.

I don't have much to say about gold, except that it seems to be vastly overpriced, and its price charts are not nice at all.

No one can honestly predict the future of bitcoin.  It may rise again to thousands of dollars, or it may be superseded by something else and go down to zero.   It is a big gamble, a lottery ticket with unknown odds.  People should be free to gamble, but must know that it is gambling and not investment.

It is hard to be "constructive" in a field that is chock full of wishful thinking, sales hype, and outright fraud.

When I started looking into bitcoin, last December, at first I tried to be helpful.  If you were around, you may have seen the daily tabulations of exchange volumes, and various analyses, and some attempts at predicting the price.  But eventually I stopped because I realized that (a) the little data that exists is incomplete, censored, and impossible to interpret, and (b) no one here wants to know the truth, they only want to hear that bitcoin is wonderful and growing and everything is going well.  

For example, my tabulations of exchange volume were scoffed at because I insisted on including the volume of Huobi and OKCoin, that everybody claimed was "fake".  There was no evidence of that (and no one asked how much of bitstamp's volume was just arbitrage), but folks just didn't like the notion that China was in control of the price.  Even to this day, many bitcoiners talk and trade as if China does not exist (and are mystified when Western "great news" do not make a blip in the charts).  And then I learned that there were other large exchanges in China besides those two, not shown in any Western site; so my percentages were all wrong -- in the "wrong" direction.

Most bitcoin entrepreneurs (like Sielbert, Matonis, the Winkles, etc.) will never admit that China exists.  Can you imagine them saying: "By investing in our fund, you will tie the fate your lifetime savings to the collective mood of a few thousand amateur Chinese speculators.  But don't worry, even if you lose all you money, we the fund managers will get to keep about 5% of what you invested."

Well, I am pleased that Brazilians so far have proven to be smarter than Argentinians.  But we already knew that. 

The article claims that the BitcoinRain ponzi (that promised almost 10% return per month on your bitcoin investment) was closed by the Evil Government.  I wish it was, but the government at the time did not even know how to spell "bitcoin".  The story I have read, in this forum and elsewhere, is that one BitcoinRain investor eventually asked to withdraw his account, about 1000 BTC.  Before executing the order, the owner went on vacation for a couple of days (so claim the reports), and then, in one of those bizarre "bitcoincidences", MercadoBitcoin was hacked and all bitcoins were stolen, including the holdings of the BitcoinRain fund, that were stored there.  Eventually MercadoBitcoin provided its clients's bitcoins back, but the BitcoinRain investors never got theirs.  The owner sold MercadoBitcoin, and the new owners do not see themselves responsible for the BitcoinRain hole.

The Brazilian Real is stronger than the Argentinian Peso, but both have fared much better than bitcoin in 2014.  People who try to sell bitcoin as a way to protect one's investment from inflation should be jailed, IMHO.

The poor performance of bitcoin in Brazl may be due to the memory of TelexFree, a huge multi-level marketing scheme (bigger than bitcoin) that collapsed last year.  Millions of people lost large sums of money, probably billions of dollars in total.  Bitcoin is very different, of course, but it has in common that it is selling a technology that few understand, and has no backing assets.  The last point seems to be what turns most people off as soon as they hear of it.

I agree, Metcalfe's law for Bitcoin should use (number of customers)x(number of merchants) instead of (number of users)².  Unfortunately we do not have data on the number of customers and how it is evolving.

I suppose that when Dell started to "accept bitcoins" there was a rush of bitcoin holders buying from them.  Ditto from each other major merchant that "accepted bitcoins".  Has that trade been increasing, decreasing, stagnating?  We do not know.  The blockchain cannot tell us that, as discussed already.

Unfortunately BitPay and Coinbase are privately funded, so they do not need to post independent audits every quarter, and they can be as creative as they like in their press releases.  And even if we knew how much BitPay is processing every month, we would not know how much of that volume is really people using bitcoin because they find it better (cheaper/faster/easier/etc) method of paying for goods and services than other forms, and how much is other uses (such as people using BitPay as a way to exchange bitcoins for dollars). 

A while ago, BitPay announced that they had processed a single transaction worth 1 million dollars: a downpayment by HashTrade to BFL for a batch or mining equipment.  But now some people claim to have evidence that the bitcoins in that transaction belonged to BFL itself...

You mean, as opposed to dwarfing, elfing, hobbiting, orcking or trolling?

The ~800'000 BTC figure is the sum of all BTC balances in client accounts.

If the exchange had been operating as it should, that number should be the sum of all BTC deposits by clients, minus all BTC withdrawals by clients and the fees withdrawn by Mark & co.  So those bitcoins would have to be "real".

If those bitcoins did not really exist, there must be inconsistencies in the records, like bitcoins being credited to client accounts without  corresponding BTC deposits, or BTC withdrawals without debiting the client account.  Mark claimed that the latter was the case: the "malelability bug" tricked his scripts into doing precisely that.  But people who understand the "bug" say that it could not have leaked more than a few hundred BTC.  And Mark has been silent after that first "explanation".  



The first thing that a self-help group should do is to hire a lawer who knows Japanese bankruptcy law.  Without expert advice, the group will be just a version of this thread: clients will waste time discussing what they would like to happen (like "return the BTC as BTC") without regard for whether it is legally possible or not.

Currently, transaction fees are negligible (~13 BTC total per day; on average, less than 0.08 USD per transaction, or less than 0.01% of the BTC volume excluding change-backs). For many kinds of non-payment transactions (tumbling, moving between hot and cold wallets, depositing and withdrawing from exchanges and other "bitcoin banks", over-the counter bitcoin purchases, etc.) those fees are not a deterrent.

And fees are not yet mandatory, is that correct? 

Moreover, there are many people (such as fund employees) with motivation to generate "fake" traffic in order to give the impression of usage. 

My guess is that payments for goods and services are no more than 5% of the blockchain transaction volume.  The justification is that the latter does not vary with BTC price as one would expect.  If that is the case, then one cannot use the traffic as a measure of adoption, even with a 0.05 weight, because the proportion of payment to non-payment traffic may vary a lot.


I am not claiming that Metcalfe's law describes bitcoin growth; on the contrary, I was disputing that claim, that was made by someone else.

I confess that my thinkpower is not enough to even begin to understand the argument.  Oh well.

There are several problems there...

For one thing, how to define the "size of the network", and how to measure it?

Total hash power is a poor measure, since over the lst couple of years the hash power is now concentrated in a few large pools.  The justification given for Metcalfe's law is that each node can interact with all the other N-1 nodes, so as N increases the number of possible interactions grows as N², and the value of the network is guessed to be proportional to that number.  But if the network, instead of adding mode nodes,  is concentrating all use in a few big nodes, the interaction actually goes down.  And, aniway, miners don't interact with each other.

I explained already why I believe that the blockchain traffic (whether measured in TX, BTC, or USD) is mostly bitcoins moving between addresses with the same owner; so it cannot be assumed to measure the size of the network, either.  In fact, we do not have any reliable data about the bitcoin economy, except the market price, the number of coins mined, and the total hash power.

In the plots that are said to show that bitcoin follows Metcalfe's law, the last year is squeezed into a tiny area a few millimeters tall by a couple centimetres wide.   But that is where most of the "weight" is.  It is like plotting some property of bodies of water, from a teaspoon to the Pacific Ocean, and having the data for all the seas and oceans squeezed into that tiny sliver of the plot.  Why should one assume that a property that holds for small bodies of water, from teaspoon-size to lake-size, will continue holding for ocean-size ones?  (And indeed we know that real oceans have many phenomena that you don't see in lakes, like currents driven by climate differences.  In particular, for all small bodies of water there are bodies that are 10x bigger; but that is not true for oceans...) If that "Bitcoin Metcalfe" plot were to be trimmed to the last 12 months and expanded to fill all the plot area, what would it show?

Metcalfe's "law" is used in bitcoin to "prove" that X will grow like Y squared, for some suitable quantities X and Y.  Problem is, the law does not say that Y will continue growing, that it is not being affected by MtGOX, that it will not suffer from ApplePay, that it is not determined by China, etc.

(And Metcalfe's "law" is not mathematics; it is just an empirical observation that is said to hold for many networks.)

I am merely warning people to be wary.  Not everyone who claims to be your friend is really your friend.  Scammers, almost by defintion, are pretty good at convincing people that they are honest.  Bitcoiners should have learned that by now.

Out-of-court settlement will not make the missing bitcoins appear, so the former clients will not get more than 20% of their losses, in any case.  Judicial liquidation may take another year or more, but it WILL return most of the remaining assets to the clients.  The liquidation court has powers that a Sunlot-like takeover will not have, such as seizing the assets of former management and eventual accomplices, subpoena documents and bank histories, etc..  Moreover, it can be expected to do so.  In contrast, Sunlot has already "pardoned" McCaleb and Gay-Bouchery, and will let them keep what they got from MtGOX.  AFAIK, Sunlot never said what they will do about Mark. 

I could just say "heck, it is your money, if you want to give it to Sunlot, your problem."  Except that it is not in anyone's interest to let crooks who stole 500 million dollars walk away free and carrying all the loot with them.   The world will be even less safe than it is, if those bandits are not caught and sent to jail.  Unfortunately, to me, that will be the likely outcome of a Sunlot takeover.

They are still figuring out how many bitcoins and dollar there are; they have hired some TI consultants to analyze the database and other files.  Then they have to figure out what clients can claim. (It need not be the final account balance; my guess is that it will be some other formula.)  Then clients will have to send forms specifying their claims; this step has been postponed to the next year.  Then they will have to validate the claims.  Meanwhile, they may have to auction the bitcoins.

There is an investigation going on by the Japanese police about a certan amount of bitcoins that the liquidator thinks are missing.  It may not be all the 600'000; IIRC it was some particular 20'000 or so.  Do no expect any more details or information about that until the investigation is complete; that is normal in criminal investigations.

Then there is Sunlot, lobbying hard behind the scenes to stop the liquidation, call off the police investigation, and take possession of the 200'000 remaining bitcoins, "for the good of the clients".

I gather that there are some help sites and client groups, but it is not clear whether they are really trying to inform and help clients, or are trying to obfuscate and convince them to accept the plans of Sunlot or other sharks.  Beware.

You had your coins stolen.  You should count them as gone.  If the liquidation is not derailed, one day you will get back about 20% of what you lost.  Then you should count that as a lucky windfall.   Unfortunately, that is how it works when companies go bankrupt.

Well, not sure that the news have been good.  For the public who is not committed to Bitcoin, ApplePay sounds like a formidable competitor.

MtGOX is still not over, in several senses:

  * The liquidator has not yet started to collect the claims of former clients,
     and does not even seem to have a clear idea of how to evaluate them. 
     Meanwhile Sunlot is trying very hard to derail the liquidation and take
     over the "investigation" and "refunding" of clients --- whose greed
     seems to be much better developed than their business sense.
     The fact that people lost a lot of money and did not get anything back yet
     often gets mentioned by general media when they mention MtGOX.
     Not good for Bitcoin's public image.

  *  There is still no credible explanation for how the 600'000 BTC were lost. 
      Many theories are out there, and some of them may have implications for the
      future of bitcoin.  There is a criminal investigation going on by the Japanese police,
      but is may not address the bult of the coins, only a very small part.
      The lawsuits started by US and Canadian clients were retired by
      negotiations of Sunlot and the bigger clients.  This continuing mystery
      about what happened is not helping the public image of Bitcoin, either.

  * It is not known where those 600'000 coins are now.  They may have been
     cashed in long ago, they may be sitting still waiting for the investigations
     to be called off, or they may be circulating through tumblers.  In the last
     two cases, there is the risk that they will be dumped on the exchanges
     or in the OTC market at some point.   They may be being sold now,
     and causing the drop in price.

I have not seen any sign that China has lost its influence on the price. On teh contrary, the fact that the price does not seem to react to Western news sugests that China is still setting it.  (Note that the guys who bought that 30 kBTC sale at Bitstamp may be arbitragers.)

If China is still in control, then it is not surprising that there was no recovery after the October 15 tax deadline.