Suppose that the MtGOX thief has 500'000 BTC divided into 150'000 addresses (3.33 BTC per address on average).  Each day he issues 75'000 transactions (one every 1.15 seconds).  Each transaction combines two of those parcels and sends them out to two new addresses.

He divides the addresses into two groups, A and B, 75'000 addresses each.  The two groups are alternated, so that for the first 12 hours each day the two inputs are chosen randomly from the current A group, and the outputs are added to the new A group, until the current A group is exhausted.  In the next 12 hours he does the same with the B group.  Thus the bitcoins that are input to each transaction are at least 12h (80 blocks) old.

Assuming that each transaction pays a fee of 0.00013 BTC, here is what he contributes:

  Number of transactions per day: 75'000

  Total transaction output BTC per day: 500'000

  New addresses used per day: 150'000

  Total fees (in BTC) paid per day: 10

These numbers match the current blockchain statistics.  Note that 10 BTC/day of fees is a small price to pay for tumbling the MtGOX stolen coins.  

Is this correct?  The point is that the current blockchain traffic is small enough to be "faked" by a small group, even a single person.

Anyway, those blockchain.info plots are rather strange.  They don't show increasing adoption.  I don't know what they are showing.

How can you be sure of that?

Arbitrage does not require immediate transfer of bitcoins or money.  

An abitrager sees that the highest buy offer on Bitstamp is 480$, and  someone posted a sell offer on  Huobi at 475$.  He immediately buys on Huobi and sells on Bitstamp (not the same coins!), until the bids and asks uncross.  He has to be as quick as possible to beat other arbitragers.   Indeed he must be a robot, so he can react in seconds.

Thus, the delay between a price drop at Huobi and its echo at Bitstamp  is the time it takes for the arbitrager to see the new offer at Huobi and place the order at Bitstamp.

Actually I guess that arbitrage is done by the exchange owners, so it may have higher priority than ordinary clients.  

However, since both new addresses and transactions are free, users and programmers have no reason to use them sparingly.  A substantial and variable fraction of those counts could be "fake" transactions, between addresses owned by the same person -- such as tumbling, hotwallet/coldwallet motion, software testing, etc..  Bitcoin deposits and withdrawals at the exchanges should also be counted as "fake" in this sense.  The blockchain traffic may also include testing of new altcoins or services built on top of bitcoin. 

Unfortunately there is practically no reliable and meaningful data on the bitcoin economy.

You cannot see who leads on that plot.  Arbitragers apparently react in a few tens of seconds at most.  Even the plot with 1-minute interval is too coarse.

Why do you suspect that he meant to ask this instead of that?

That may be what the lawyers argued, but AFAIK it did not stick.    The concept of money laundering is more general; the money can be  (and often is) converted to non-money merchandise, such as boats, diamonds, real estate, etc.

http://money.howstuffworks.com/money-laundering.htm

According to what I understood of the charges, "dirty" money from Silk Road customers was turned into bitcoins by Charlie and his partner, sent to the SilkRoad merchants, and the bitcoins from SilkRoad's fees were to be converted to (or used as) money by Ross.  This way, they hoped, the source of Ross's wealth would appear to be legitimate (bitcoins, rather than drugs).

EDIT: typo "SilkRoad"

From what I know, the purpose of bankruptcy (full name: "bankruptcy protection") is to halt all individual lawsuits by employees, creditors and investors against the company, so that a single court (1) gets to evaluate whether the company has a reasonable chance of recovering financially and paying off all its obbligations, or, if not, (2) orders that the company be closed, all its assets be sold or auctioned, and the proceeds be distributed fairly among all claimants.

I had understood that MtGOX was forced to file for bankruptcy protection because many clients were already suing it or were about to do so.  The Japanese court easily concluded that MtGOX could never recover from such big losses, even after Mark found the 220'000  BTC that he had "forgotten about", so it determined liquidation.

OOPs, correction: the 500 balls that my student bought are not in that container.  Those are mostly the spindle stabilizer balls, plus a few small ones removed from ballpont pens.

Most of those balls were bought by a student of mine while he was spending a year at the UWE in Bristol, working on his thesis on photometric stereo.  We needed some targets with specific known shapes, and the balls were meant to be embedded on another ball object to make many tiny "warts".  He bought them by mail (500 balls was the minimum amount, came in a small envelope through ordinary mail) and were paid with my credit card, IIRC. I visited him at Bristol shortly after that and helped him with some xperiments. In the end we did not use the warty ball (we made other targets with table tennis balls, rubber balloons, muffin cups, nails, house paint, and other such stuff).  When I left I took the rest of the balls with me.  I also added to the "collection" a few dozen larger balls that I got from dismantling old floppy and CD drives (they are inside a stabilizer gizmo that sits atop the spindle to prevent it from vibrating as it speeds up).

At some point I noticed that some of the balls climbed up the walls of the plastic container when it was shaken, apparently because they picked up static charge and repelled each other.  Static electricity from friction and and repulsion of electrically charged objects is usually demonstrated with bits of light insulating stuff; I was a bit surprised to see it happen with relatively heavy and conducting objects.  It seemed as a good a subject as any for my first YouTube video.

Come on, I used "car" to suggest a sizable amount.  Replace it with "plane tickets" or "home theater" or whatever if you wish.

But isn't bitcoin supposed to be used to pay for everyting through the internet, from chewing gum to a mansion in Bali? 

(And if you buy a gold-plated Rolls Royce from a reputable dealer 1000 miles away, why would he not deliver it to your home -- after he got your check and cashed it?)

A couple of weeks ago, some famous bitcoin guru (Matonis?) explained in an article how in the future one would walk into a car dealership, choose a model,  point the smartphone to the QR code on the windscreen, and drive out, without interacting with a single person.  He did not mention satoshi-testing, air gap, brainwallet -- or what the client would to if the sticker on the windscreen turned out to be fake.

I also posted a lesson on how to double your money without leaving your desk; but that does not translate well into English, unfortunately (and it was done well before I heard of bitcoin, which has made it obsolete):    https://www.youtube.com/watch?v=X9i6XwhH_jo

You mean, how long I have been logged in? 67 days, 8 hours and 0 minutes.  (It should be much more, because since January I leave at least one tab permanently open on this forum, even while I am not here.  Presumably the forum software stops counting after the tab has been inactive for some time.)

From that article:

Thus we had 12 million credit card data stolen but that resulted in no money stolen. 

Yes, I know that other data thefts did result in money being stolen.  But that example highlights the gap between the two stages of credicard/homebanking fraud -- a gap that often allows the cards or passwords to be canceled before they get used.   There is no such gap with bitcoin: once the thief's malware gets hold of your private key and an internet connection, it can immediately transfer the bitcoins out of your reach.


Check it against what?


... a contract which you downloaded from what seemed to be their website?

What is the threshold amount above which you always satoshi-test the address before sending the full payment?


Hint 0: Did the private keys appear magically on the paper wallet, or did they come from somewhere else?

Hint 1: How can you check that the private key on the paper wallet was randomly chosen among all possible keys?


Well, I grant that at least one of us has not completely understood the technology yet.


I am tired of arguing against the bitcoiners' collective blind spot for the risk of theft. 

Stealing bitcoins is easier than stealing other forms of money: this is supported by logic and confirmed by the facts.  While this problem may be attenuated eventually, bitcoin theft, unlike other forms of money theft, is also IMMEDIATE, IRREVERSIBLE, and SAFE FOR THE THIEF -- problems which seem impossible to fix, because they are actually part of bitcoin's goals.

This is a serious obstacle for bitcoins adoption.  People who heard about MtGOX generally do not trust it; but that is because they don't know the details.  If they knew them, and knew about the hundreds of other scams and heists, and knew that practically all of them are still unsolved ---  they would run away from it like hell.

I don't know what else to say to those who simply refuse to admit that there is a problem there.

But, can we at least wait until the MtGOX thief is caught, and the 600'000 stolen coins are returned to their rightful owners, before deciding who is trolling here?

Not true. I used my real name, but it took maybe a month or more before people here bothered to check who I was.

Methinks you are barking up the wrong tree.  Several people have been desperately trying to stop the bankruptcy process, since before it was filed, including many big clients and former MtGOX management.  There are plenty of possible explanations for their despair.  Sunlot has succeeded in stopping the US lawsuit, and all those people must now be pestering Kobayashi with proposals to let them take control.  Sunlot has already promised immunity to Gay-Bouchery and Jed Mccaleb, and would not answer when asked what they would do about Mark. 

Where did you get that from?  Mark himself claimed that he found the 220'000 BTC in an old-format wallet, after filing for bankruptcy.  Whether he had really forgotten about them is an open question, but AFAIK it was him who "found" them and told the court about them.  Kobayashi had them transferred to an address that he controls (it says so in the papers given out at the last meeting). 

I don't see anything exceptional about him.  Bankruptcy proceedings are always v e r y  s l o w things.  From the papers given out at the recent meeting, he has done quite a bit of work actually.  The basic idea may seem simple (collect the remaining assets, collect claims, etc.) but there are lots of details that do not show up in the report.  For instance, MtGOX used several banks through its life, had branches and dealings in other countries, etc.. Also, a bankruptcy case was opened against MtGOX in the US, and it was not long ago that the US judge finally recognized the precedence of the Japanese courts.

Furthermore, Kobayashi had to learn enough about bitcoin to avoid mistakes that could cost him millions in lawsuits.  We don't know whether  those 220'000 BTC were really "lost and found", but the episode suggests that MtGOX's accounting must be a frightening mess.   I bet that Kobayashi still hasn't decided how he will handle the claims -- hence the postponement.

Well, it seems to be a consensus that the utilitarian demand (people buying BTC to pay for things) is still much less than the demands for day-trading and investment.  Like gold, but without the millennia of brainwashing of "gold is precious".

What signs of strengthening do you see?

SMBIT sold ~1200 BTC net this week https://bitcointalk.org/index.php?topic=337486.msg3620842#msg3620842.

Their holdings now ( ~105.8 kBTC) are back to the end-of-May levels, after a high of 108.2 kBTC on Aug/06