Of course they are.  How could one sell bitcoins and bitcoin funds in the West, if the buyers thought that the future value of their investment would depend on the mood of a legion of Chinese day-traders? 

I haven't seen anything about Realcoin after the announcement.  Either Pierce realized that it was a bad idea and gave up, or he is working quietly on it.

You will do most of your account management and processing on the computer that is connected to the internet.  Only when it is time to sign a transaction, you will transfer the transaction data to the other computer that has your wallet, sign the transaction there, transfer the signed transaction back to the first computer, and broadcast it from there.

The Trezor basically replaces that second computer.  It keeps your private keys, signs transaction that are passed to it by your primary computer through the USB port, and returns the signed transactions to the primary computer.
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I cannot help you there.  As it says in my signature, I do not own bitcoins -- mainly for other reasons, but for this reason too:  bitcoins are easy to steal, and once stolen there is nothing one can do, no none to help, and no hope of ever getting them back. 

There is no way of knowing whether someone has a copy of your wallet, but that is very likely. (The alternative is that a malicious software in your computer sent out the transaction on its own, without sending your wallet to the thief.)  Definitely, you should never use those addresses and private keys again.

4:00 am Monday Morning.

That is still a bit dangerous.  The safest procedure is to never connect that computer to the internet, transfer the transaction data to it  by USB stick, and transfer the signed transaction back to the main computer in the same way. 

I don't think that there is a sufficiently safe way to carry several thousand dollars in bitcoin outside your home.  If you do not control the physical environment where you sign the transactions, there seem to be ways to steal your bitcoins, even of you use a Trezor.

If it was a keylogger, that will not do.  As I understand, the safest is to use a separate computer, not connected to the internet, to store your wallet and sign transactions.

A Trezor may be just as good, although you must be careful when updating its firmware.

Why, should it be?

Do not underestimate Brock Pierce.  Do not underestimate human stupidity.

Is that some sort of threat?

I created a new thread for this discussion since it does not relate to the Trezor.  Feel free to continue the discussion there if you wish.

Moving off-topic discussion from the Tezor thread:


I meant, what software do you use to handle your wallet.  How did you create the private keys of the accounts that were emptied.

Bah.  He claimed to have a "foolproof" method.  I pointed out that it is not foolproof.  Who is the troll?

Unfortunately there seems to be many former MtGOX clients who absolutely do NOT want an independent investigation.  That is why proposals to "revive MtGOX"  (such as Sunlot's) have their support.

Sunlot already promised "full amnesty" to Gay-Bouchery and Jed McCaleb, in exchange for their support of their proposal; and they avoided to say whether they will investigate Mark's role.  The US lawsuit was also recalled by their intervention.   For all we know, if Sunlot revives MtGOX, they may even hire Mark to run it.

The "malleability bug" explanation has been debunked by some people at MIT.  It is highly likely that it was an inside job, and may have involved several people, including some MtGOX clients and people at other exchanges. 

And the Shrem Karpelès & Friends Foundation does not seem to regard bitcoin theft and embezzlement in general as a problem worthy of their attention.

It is not foolproof, I am afraid.  For the fools who bought in late November, that method has been rather disappointing so far. 



Again, it depends on when one bought and sold...

Were you handling that wallet when the first transaction happened, or shortly before? 

Do you use Dropbox or some other external storage?

Was the wallet totally emptied, or only part of it?

What software/hardware did you use to generate your private keys?
 

That only applies for "sufficiently small" displacements in the initial conditions.  If the state space is bounded (as in the double pendulum example), the initial displacement d must be less than R/(M * e^(LT)) where R is the domain radius.  Otherwise the d-neighborhood of the starting state will be not only stretched but also folded or rolled over itself, destroying the linear correlation.

Is there any evidence of any relation between future changes in price and past price history (other than the current price)?  I have tried looking for linear correlations in the case of bitcoin, but without success.  But that of course does not prove anything.

All the best, --jorge

"Did you choose SATOSHI NAKAMOTO because it is an anagram of I'M SATAN TASK OO-OH?"

Heh heh, tricked ya, did you really believe that that mushroom was the anagram of rush homo?

And the anagram of Rush Homo is Mushroom again -- isn't that too much of a coincidence?

Nice post @macsga, but I suspect that price is worse than chaotic, it is basically "random".

A chaotic system appears random but has a more or less deterministic model that, in theory, would allow one to predict its future from its current state.  In the double pendulum example, the state is the pair of angles, at the top and at the elbow, and their derivatives with time.  The trajectory in that gif was computed starting from some arbitrary state (particular choices for those four numbers) and applying the deterministic equations of motion.

A random system has no closed deterministic model, not even in theory; its evolution depends on external inputs that cannot be predicted, and cannot be enclosed in the state because they are themselves dependent on further external causes, and so on.  In this case, the external inputs include what each trader reads and thinks, the bills he has to pay and the money that he earns, government regulations, bank delays, and lost more.  If one tries to enclose all those variables as parts of the state of a closed model, one ends up with the whole universe, or at least with good part of mankind. 

So, in the theoretical model, the price must depend on external inputs that are not modeled, and therefore unpredictable, and therefore memoryless -- their future values are independent of their past values.

The question is whether one can still have some state variables in that model, so that the future prices are not entirely random but have some dependence on that state, and therefore to past prices.

The current price is known to be such a state variable, indeed a pretty good predictor of future prices.  That is, the price P(t+d) at a future time t+d is the price P(t) at the current time t times some factor (percent change)  D(t,t+d).

As far as I know, no one has been able to demonstrate any other correlation; that is, and relation between D(t,t+d) and the prices (or price changes) before the present time t.  So, it seems that D depends entirely on those external unpredictable factors.The best we can do is observe the probability distribution of D.  (I don't know what is the shape of that distribution, only that it is not log-normal.)

In other words, the logarithm of the price is a simple Brownian process whose increments log(D) are independent but not normally distributed.  This is the "log-Brownian" or "geometric Brownian" model. 

The unpredictability of price has been blamed on "whales"  who try to "manipulate" the price and break its trends.  However the market has fish of all sizes, and once one accepts that the increments depend on unpredictable external factors, it becomes unnecessary to distinguish "whales" as a separate category of trader.

For sure, a single trade of 100 BTC will have a much bigger impact on price than 100 trades of 1 BTC each, because the latter will tend to cancel.  In log scale, perhaps the change due to the large trade will be 10 times larger than the sum of all the little changes, typically.  However, one increment will be just as unpredictable as the other, and just as unrelated to past trades. 

Humans are genetically programmed to find patterns, even where they don't exist.  The trends and patterns that one may think of seeing in price charts may well be only illusions.  We also remember more easily our predictions that worked than those that failed, which reinforces the illusion.

Correlations between past and future price changes may exist for very short time scales d.  For example, it may happen that a trader who decides to sell (or buy) will do so in a series of successive trades; since these trades are all derived from a single decision, there will be strong dependence betwen them.  Also, presumably the general feeling of most traders will not change in a few minutes.  On the other hand, that general feeling may not influence their feeling towards the small changes that are likely to happen in that time span.  That is, one may believe that bitcoin will go to the moon this year, but nevertheless feel that it may go down in the next minute.  Also,

Correlations between past and present also may exist in common stocks.  For most traders, the main external inputs are a small set of  "fundamentals" like products and their demand. These variables tend to vary slowly and smoothly with time, so one can postulate models for them that include "momentum" --  that is, a dependence between the past and the future.