 Yeah, yes, you can hear me. Hi, can you hear both of us? So and welcome to the Bitcoin show, what are we at? Six oh my gosh, we're at episode six already and I'm Bruce Wagner, and I'm Ed Gal and Welcome there's all kinds of breaking news in the Bitcoin world and we want to bring it to you and Get as much information as we can to you as quickly as we can so As I say there's a lot going on I'm gonna bring up the first of all let me just say this today's episode of the Bitcoin show is Brought to you by our awesome sponsors first ambivert creative. Ambivert creative is a Mbivrt Creative comm they create your corporate identity and Bitcoin bonus comm Bitcoin bonus comm they're amazing you'll get paid back in bitcoins for everything you do everything you shop online Everything you buy and sign up for that you're doing any way you get paid back and blue canary night light Blue canary night light comm They sell the most amazing blue canary light night light check it out Just take a look at it and read the story behind it and you'll be hooked You got to buy one all right and trade hill comm which is the new exchange site on the scene new kids on the block and Awesome new features and so on you can actually get a 10% discount for all your trades for life with views the Referral code on your screen, which is th as in trade hill dash R as in referral code 141 that's th dash R 1 4 1 so thank you guys for sponsoring the Bitcoin show We're always looking for new sponsors, and we really appreciate you. Yeah, so Today we have live via Skype Kevin day you don't know Kevin probably Say hello Kevin. They have to be married to him. Thanks for having me on today, but Kevin has a story to tell So why don't I just let's just go into it Kevin, and why don't you tell us tell us the story from the beginning? well, I've been playing on the Bitcoin market for quite a while now, and I've been using Mt. Crocs trade funds for You know last couple months like a lot of people here I think have been I was a witness to the event that happened yesterday where somebody with a large quantity of Bitcoins decided to sell all of them at a penny which instantly crashed the market and You know because every cell has to be matched up with a buy Somebody was the one who bought all those coins for a penny, and that somebody just happened to be me Yesterday just through pretty much good timing. I bought roughly $5 million worth of bitcoins for $3,000 Wow $5,000 $5,000 worth $5,000 worth of bitcoins for about $3,000 five million dollars worth now when you say five million dollars worth of Bitcoin How are you determining like how many bitcoins is that? I ended up with 259,000 bitcoins and at yesterday's prices before Everything crashed that would have been roughly, you know around $5 million dollars And what what price I mean what price is that would that be five million dollars? What it should have been Wow, okay, so How do you think this happened and what's going on now Well, it looks like I mean There's a lot of guests going on right now and there hasn't been a lot of really official statements as to what really did happen But it looks like somebody was able to Penetrate one or more accounts on Mt. Gox that had significant funds of Bitcoin store and one of the interesting security features that Mt. Gox has is that you're not allowed to withdraw more than a $1,000 of Bitcoin at whatever the current market value is per day sort of a safety feature So, you know if you have millions of dollars in bitcoins in there It's supposed to be safe, you know No one can take more than a thousand dollars at a time and let you've gone and emailed them prove to you are and said, you know You basically are taking responsibility for what happens And I think some smart guy realized that if he crashes the market so bitcoins are work less than a penny apiece He could withdraw whatever he wanted I'm guessing this is pure speculation But that's the only reason why I think somebody did this was they were planning on crashing the market and Then cash me out quickly as they could Hopefully buying them all back at a penny, which I think I beat them to What let's seem to happen was we were all watching this this trade as it happened where somebody put a gigantic sell order in and The way of market like this works There will be some people who are buying some people who are selling, you know, and it keeps trying to match up the best Prices for buyers as it went through the system. So it started out buying bitcoins at $17 and then $15 and then $10 and This order just one single order for so many bitcoins consumed every Order on the system until it was just some people's hoping for a miracle Orders for a penny apiece at all the way at the very bottom That I just got a tiny bit on top of and be everybody else's punch, right? So you think that Okay, so the big question that a lot of people are asking is was it just one account that was Hacked and the bitcoins were sold from or what did it were a lot of people's bitcoins sold? What do you what do you think about that? Which is plausible, but I think one of the questionable things is why would anyone store this amount of money on a public website? Especially one that over the last few days has been getting a lot of flack for having security problems you know for for several days you know people have been saying here's a list of everyone's encrypted passwords and The people from Mount Docs have been assuring everybody know everything safe. Don't worry about it But I would think if I had you know It looks like the total amount that this account had in it before the attack right into it was somewhere in the order $8 million worth that yesterday's prices And you know, it's it's a little odd to try to think why somebody would have that much money in one account at a time But if what the mouth guys people are saying is true It was one person who had all this a hacker broke into it and was trying to find any way of eating that money out and Basically crash the market for everyone to be able to do so and you're in Chicago, Illinois, right? Yes, and how long have you been a customer of Mount Docs? I've been really you know playing with it Probably a month or two now. There's a month or two Okay, and you I mean, obviously, this is the best deal you found a penny What was the price going when you first got into it? Now a lot of people are saying that it was multiple accounts all triggered to sell at the same time. Are you I mean Do we have any way of knowing really? You know It would be difficult I think for that to happen because for one when we were watching the trades go through, you know The way Mount Docs handles trades is that they one large trade will slowly eat up more and more Buyers as it finds them. It's not an instant trade like what would be a sale like on a big stock market it seems to be sort of paced and All of these trades were coming in with the exact same time with them which got further and further in the past So either someone times them to the very second to all go off at once or they all were in one account Okay Wow, so Well, they could have been couldn't they have been all triggered at the same time to go off at the same time Couldn't they all Have been triggered to go off at the same time But one of the things that we actually noticed yesterday is that while one trade is executing it's almost impossible to put in a new one The system keeps saying, you know, there's a trade already in progress and it can't create a new one So I don't know if that's an intentional limit of only allowing one trade to go through while one processing Or if that was just a side effect of so many people Hacking and hitting a refresh button on the browser that it killed the site But it was nearly impossible for anyone to execute trades until this finished, right? Okay, and you say that it took about 20 minutes for this whole this whole event to I mean for the whole trade That one transaction to complete My head but it felt around 20 minutes. Yeah, I mean we were watching, you know In real time and still seeing the same what appeared to be the same order still executing for far after You know, everyone had already started panicking and wondering what was going on. Wow All right, so how How do you feel about the Suggestion of a rollback of all these transactions? Well, I think all of you think I'm really biased here in this But I think a rollback is really pretty dangerous for a few reasons The biggest is that up until now the whole idea of a rollback was almost unheard of, you know Mt. Gotts had never said hey we reserve the right to rollback feel like it They've never published the policies where they do, you know traditional stock markets have written published policies where if there's some kind of Obvious error or security incident or whatever. Here's what level it takes for these rules to kick in and here's how we will handle it There was none of that and some of the language on the Mt. Gotts website To some of us really made it seem like they were saying we aren't interfering in any trade whatsoever We're just matching up buyers and sellers so there's There's a feeling that I guess a few of us here that are saying We don't know that they really should be allowed to do this because they made it sound like not only that they never mentioned this but they hadn't They had used language to make it sound like they thought they couldn't Yeah Okay, so that's a lot of things that are not very specific until after it's kind of too late Wow so all right if Do you think that you're the only one who benefited from this Definitely not I think that was probably the one who benefited the most at least I got the biggest order in But there were a lot of people who had standing orders for a very long time They basically told the system, you know if the price ever drops below 10 by me a thousand dollars worth The price ever dropped below five by me $10,000 worth whatever And all of those orders from everyone who was pretty much willing to put the criminal line before this happened got their orders filled So there were quite a number of people and again, it's not hard to rewind this now to figure out what happened while the site's still down But there have been quite a few people and I see you've been saying you know, they got trades in to they got this happened that this happened So it's it's hard to tell the scale of the scope in less They're going to be really transparent about which trades are gonna to revoke and why Yeah, and were you what were you trying to withdraw that those Or I Happened was when I placed this trade order I was basically clicking over and over again and getting you know trades not be executed right now When I didn't think any of them went through And then the whole site died for a few seconds. I refreshed. I looked at my history I showed you know that I had just bought more than 250,000 coins and Everybody in IRC was sort of talking about, you know, what happened why you know, what's going on Combined with the fact that the there was a lot of security concerns recently I was at the very least had doubts whether the whole site had just been hacked and someone was trying to empty everything Not just one account of the whole thing so Initially, I tried to withdraw a substantial portion of that just it that were safe keeping it's nothing else and That $1,000 limit kicked in and stopped me. I didn't get very much out at all and Decided that point that even though there may have been some ways I could have Evaded that and still went through the whole thing. I thought that would look very suspicious, you know And that's I didn't want anyone to think I was responsible for the whole crash anyway So I should be you know, not do anything even slightly shady. So I just left it all in there untouched so that when Homer heads were around we figured what happened, right? When calmer heads prevail, okay I know there's a huge Debate going on about rollback or don't rollback and all that and it's it's a very Disconcerting because I mean obviously everyone's biased to one degree or another I guess unless they didn't have anything at all in But everyone either benefited or or well, I shouldn't say that not everybody benefited or lost but a lot of people have strong opinions about it because they don't want their transactions to be reversed You know, I think I kind of expected people to come down Kind of hard on on you because that's what people do especially in forums on the interwebs, but the You know, obviously, you know, you got a five million dollars worth of Bitcoin and for a penny a piece I mean who wouldn't like that that would be a happy day I guess you're probably jumping up and down around the house for at least for a few minutes Oh, he was near for a tap for a moment near heart attack. Yeah, like we won the lottery. It was an interesting moment And you know one point I can make too is that Very few people I think have been negatively impacted by this in any way Definitely whoever's account that these came out of it if what they're saying is true It all came out of one account that guy got a really rough deal, right? I think Mount Docs is going to get a really rough deal because a lot of trust in them has been shattered and You know, this is going to really affect their business, I think as for Day-to-day people that customers using the exchange. I don't think there are very many people who can say they actually Were because this happened people who had orders to buy Chicken at place most of these orders well before this had happened and had already basically committed to buy at that price And because the system was so overloaded there were very few people even able to panic sell if they wanted to so I think only the people who really been Substantially harmed in this, you know where you actually point to a number and say this is how many dollars this people this person lost was whoever's account had eight million dollars in it sitting there to start with and What effect this is going to have on the Mount Docs economy going forward. Mm-hmm. Wow. I think also, I mean Specifically, I guess like you're saying maybe no one monetarily But the whole community as a whole is being affected obviously because no one's 90 percent of the trades are going through Mount Docs and No one's able to do that right now. So It's at a standstill What I think one of the other issues that I think is being overlooked right now Regardless of how this affects me if they're going to start setting a precedent where if they feel something Improper happened without really having fixed policies that everyone can point to and go yeah, I agreed to It's going to make it very difficult for people to trust Putting money leading money in their account there. We're just going to really harm liquidity, you know if I have to be panicked about Could a trade I just made that doubled my money get reversed an hour later I'm going to pull my money out after every trade right and if everybody is doing that and it takes so long to put money back in Liquidity is really going to dry up in any exchange that doesn't have a policy of We won't do a do a rollback in less x y and z happen and everyone agrees to begin with because If this is the norm and this is going to be the status quo going forward where they're going to arbitrarily reverse things with behind the scenes decisions happening and no one really knowing what's going on Personally, even if I was not involved in this, I don't know that I feel comfortable keeping my money in there anymore, right? Yeah, I mean I think that I don't I don't think that would be the norm, but I as anything in its infancy. It's going to you know Take a lot of mental thought and and people's Opinions and suggestions on what You know, they should do going forward because no one really knows how you know how this is all going to play out and And and how it's affecting everyone else. So I guess it's just playing it by ear Definitely, you know and Other questions that come up too, like, you know, where do they draw the line? If I have an account tomorrow that five bitcoins get hacked from are they going to refer for me because I lost five You know, if not, where do they draw the line? You know, are they doing this because they're claiming some responsibility for what happened not because it was my mistake And if they were claiming responsibility for it, should they be forced to honor these trades then All right How would you feel if it had been the other way around? Say you had five or ten million dollars in In mount gox because you were doing a big trade Or you were doing a trade over time and you had to have that those dollars there or there's bitcoin there Or you had made so much money Which is probably likely you'd made so much money by the increase in the value And you're only able to get a thousand dollars a day out because you don't want to You know facture id To mount gox if you have all this wealth stored in there and you're whittling away trying to get it out And all of a sudden your account was hacked because you put your wife's name and birthday as your password How would you feel today? What would you be saying today if that hadn't been the other way around? I mean, I guess hindsight is a lot clearer than knowing what I do. It does not happen But to me if I was dealing in highly convertible very difficult to reverse currency I would not store on a public website if I was dealing with eight million dollars worth I don't care Who was running it? You know one of the the tenants of bitcoin is that it's cryptographically secure If I have bitcoins in my wallet Unless someone gets possession of my wallet file, they can't touch it But if I'm storing bitcoins on a site like mount gox That's on a computer connected to the internet that's letting random people tell it to do things I don't think I would ever put myself in that situation to begin with. I'm not saying if this guy's fault But even then if I had to I would have the most epic password you have ever seen If it was what's standing between me and someone taking my eight million dollars Right. Well, I mean, but on the other hand, you know We have to remember that at mount gox you can only withdraw a thousand dollars a day And up to ten thousand dollars a month anonymously. So a lot of people are kind of stuck in this trap Of not being able to get it out You can get you know bitcoins you can transfer out any amount you want and you ask them to The bitcoin transfer limit just by asking. Well, maybe but that's not published and people don't know that Well, no, I have That was part of I went through the the procedure to have the cash withdrawal limit for myself Great because I was bumping into it. Mm-hmm And one of the things he asked was do you want to up your bitcoin withdrawal limit as well? You can just tell me whatever you want to set that to and I'll do it Right And I know other big traders are doing the same thing as well where you know A thousand dollars worth of bitcoins a day for people that are trading in massive amounts. That's nothing right Yeah, you know, I Again, I can't speculate on what the intentions were of the person who had this account But I'm definitely curious as to Why you know, I think I think I want to know that more than anything Why did somebody have 500,000 plus bitcoins stored on a public website? Yeah, well, I can say I know a lot of people who don't know that it's possible to You know send any a personal email to Um, you know to mark and ask him to raise that limit I mean, it's a lot of these things are not on the website. They're not public So they're just all they do is try and it says no you can't You try it tells you to email them to have a grade It's what happens when you try to receive that limit that it says just hit limit x Please email this special address to ask to have it removed when I did that to have my my limit changed I am emailed back a couple hours later asking for photo ID and right for bank. Yes. Do you got it? And did you get an email like that? That asked me where I wanted to change my limits to So the way I found out from it was by hitting you right Hmm by hitting it Oh because okay, are you sure that because we've hit that limit before are you sure you're getting you get an Email saying that you can raise the line. No, no when you try to withdraw it It tells you send an email to this address and then when you send an email you get a response back like what you said Okay, I got you when you try to withdraw more in a certain amount an email address appears It tells you to email that address to have your limit changed Okay, so anyway, but I mean if we assume that this is the case that the guy just didn't know people are very busy And they you know they barely know what's happening day to day If he just if he had it in there, he's busy and he he ran into this thing and he got oh It's an email I got to do something and he never got around to it and he you know He trusts mount gox mount after all it's the number one trade site 90% of all the trades happen through mount gox If he's trusting the site, he's got his money there You know, maybe he you know a lot of people have their money in mount gox and trade hill and Mybitcoin.com and all these web based Cloud based services and they're just trusting That it's going to be there because everybody else has their money there But if if they you know if this is by the way, what I tell you the audience If you have a password that's not secure and unique you need to change it Of course, you can't do it right now the site's down But on anything whether it's my bitcoin or mount or trade hill or mount gox or anything You have to use a unique password. So Make sure that it's long and then it's unique it should be like scrambled letters and numbers I use this thing called key pass x was that what it's called the key pass x. It's free It's free open source software, but uh google key pass x k is k e e p a s s x all one word And it's an awesome little uh, they're not a sponsor or anything But it's an awesome little free tool that will organize all your passwords But you must have a unique password for mount gox. You have to have a unique password for trade hill You have to have a unique password for your email everything needs to be unique and it needs to be long At least 12 to 16 random letters and numbers I have uh, you can have it set to always include numbers letters. You can make a lower case You can make them uh, if you add one symbol it makes it nearly unhackable But I would say like 16 characters long and this little tool will help you because you just click a button copy It paste it right in and keep your passwords secure, but anybody you had A uh password that they used on mount gox that they also used on my bitcoin Or their email or anything else you're probably already hacked You've got to go in and change your password immediately and verify that google apparently knows Was made aware that this uh email list with login ids and passwords got uh hacked and Disclosed on the internet so they've already uh forced a reset on everybody's gmail account I know I got that when I went to log on it said you you suspicious activity Give us a new password. So that's a good thing that that's happening All right. Now. This is probably a good time to uh take just a moment Again and thank our sponsors because without our sponsors We wouldn't be here to tell you the story and I got to tell you this at 10 p.m. Eastern time tonight, which I think is 2 a.m What is it you see you you tc you tc gm gm t whatever it's called 2 a.m. Tomorrow GMT which is 10 p.m. Eastern time tonight. We're going to have mark Mark how do you say this name car palace mark car palace who is the owner of mount gox? On live with us here. So join us live tonight at 10 p.m. Eastern and For an hour and we're going to chat with mark directly and you'll be able to ask your questions in the chat room And we will ask him on the air and hopefully get to the bottom of all these questions and conspiracy theories and so on But first let me take a moment and thank ambivert creative Ambivert creative is uh, it's a m b i v e r t ambivert creative dot com they create your your corporate identity You're a geek you create this amazing website product service whatever it is that you're selling And you need a really cool looking logo and with colors and you know theme and style and all that They will create your corporate identity including your your website your logo your business cards your stationery your whole corporate identity Ambivert creative. They're awesome. 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It's this beautiful little blue nightlight Glows kind of a blue purplish blue color and It's a really cool couple who created this thing for their daughter And there's a song about it and so on but anyway Check it out. You you'll take one look at it, and you'll fall in love with it And you can buy it with a bitcoin so oh maybe more than one bitcoin maybe less than one now Anyway, uh, check it out blue canary night light dot com and finally trade hill dot com Of course trade hill is the new kid on the block as far as online automated exchange sites And trade hill is awesome. They've got the full featured Many many currencies many many ways to get your money in get your money out They don't have any limits on withdrawals. They have What else all kinds of new services that are coming soon like options and so on There's also many ways to get it out and are coming where you can actually shop online As I was saying you can put in the product and buy from all these major.coms with your bitcoins directly All in one transaction So check it out and you get 10 off of all trades for life on trade hill dot com If you use the referral code for the bitcoin show, which is th-r 141 That's th like trade hill dash r as in referral code 141 th dash r 141 So thanks to our sponsors if it weren't for them we wouldn't be here and um so Back to our questions What do you got ed well a lot of people on the on the chat room i'm reading are Saying that by them by mount gox rolling back it's like the same as saying a bailout or fiat currency And um, you know, I understand where they're coming from because of the bad taste in everyone's mouth with our current uh financial system, but um I I don't know what's fair and I don't know the whole story. So I'm deferring my My true opinion until I know the whole story because I always think there's like three or four sides to each story and um and so uh Do you think the same way that it's rolling back is is really not the president? I think you might have mentioned that before right um, I guess One of the concerns I have with this now too is is basically that it's If if we're allowing this third party to exhibit more control over the whole bitcoin economy than we originally thought they had That really changes the dynamics of everything here, you know How how much that affects things? I have no idea. I don't think anyone's going to be able to tell us that until the market's reopened but you know giving a significant control of Who is allowed to have what trades occur To a third party does change the dynamics. I'm I I you know, I can't tell you what effect that will have Yeah, well, I know that in like the new york stock exchange. This is I don't know how common it is, but it's not uncommon for them to roll back You know trades because by the time they figure out that there is a mistake Then they have to do that. There's no real other way to do it So it's not perfect, but it's maybe the best way one of the analogies I've read is you know If somebody, uh, you know breaks into someone's house and they steal a bunch of uh jewelry or something and then they go and You know sell it and they set up a whatever they sell it on craigslist And you happen to be the lucky buyer who buys this jewelry at a bargain It's not really a defense that well, this was a fair transaction because it's considered stolen goods Obviously, it's really easy to identify that that happened. And so if you're possessing stolen goods, even if you did buy it It's uh, you don't get to keep it. They you know, you may not even get your money back But they will confiscate the stolen goods. Do you would you consider? I mean, do you think that's a valid argument to say you bought these fair and square on the exchange site? But you actually bought it from the Criminal who hacked into somebody's account. So basically someone stole those bitcoins and then sold them to you Because because the owner didn't sell them to you somebody else the the the criminal the thief stole them to you So would you consider that stolen goods? That's a really complicated question. Um And I have had so many armchair lawyers and real lawyers been trying to give me advice over the last few days As to exactly the answer to that question and the answer is I don't know Um, there are some who definitely believe that this is would be considered stolen goods And there are some who believe that this isn't a case of anything being stolen It is just that mount goch sold me Bitcoins that they didn't have a buyer or a seller that was wanting to sell those So they made a sale to me that they didn't have a you know, it wasn't backed by legitimate order from somebody else and I accept, you know, I accepted the trade and They are responsible for that whether that's true or not, too. I have no idea Um, and going back to how to do like the first part of your question, too You know, I know I'm I'm big You know, real world kind of stock exchanges. There are rollbacks and broken trades and things that happen constantly You know, some some traders say that a significant portion of every trade they make gets rolled back because of some error here or there And in principle, I'm completely okay with the idea of things being rolled back What I'm I'm not okay with is for things to be rolled back with no clear policy as to why and not even the understanding that everyone went into with it that rollbacks were going to even be a possibility So, you know, there's kind of kind of a two-part answer there, but I think a lot of things are we didn't know our possibility are happening because this used to be just a penny little game It was almost it was an experimental almost like a video game multiplayer game For pennies and it was just we were just playing With play money, you know, literally pocket change now suddenly it's a multimillion dollar market and it's real Serious money and all of us and I mean we're getting what we asked for it's unregulated. It's decentralized. There's no authority So it's kind of like the wild wild west. It's really by our beware I get questions constantly We're kind of torn in between Wanting some of the same real world protection that we have for tangible goods in real life or traditional stock exchanges or markets But at the same time we're still wanting the other side of the coin where we have unregulated mess that we also want And where we decided to make that line come down is going to I think dictate the future bitcoins The um for those people who are just arriving late um, we're speaking to Kevin Day, who's live with us via Skype from Chicago, Illinois Kevin is the the gentleman who just happened to click buy at the right time Won the lottery the bitcoin lottery on mount gox. He actually bought Basically at the going rate at the time 17 something 1750 something He bought the equivalent of five million dollars worth of bitcoin for a penny a piece And um, he is not in favor of a rollback Who would be but um, I think you understand that um you know Did it I think you kind of see both sides like you you feel like um Tell me if i'm wrong, but tell me if i'm expressing your sentiment correctly that you feel that um You understand that you don't expect to keep five million dollars worth of bitcoin Maybe but you feel like this really wasn't fair to you either even though I mean to be to be able to make this purchase and then have it like oh never mind You're losing the whole bitcoin community is going to lose a lot of trust in exchanges If this can just happen on a whim you purchase and you get a good deal I mean you it goes bitcoin drops to ten dollars and you buy a whole bunch and then a day later They say oh oops me made a mistake. We're going to restore from the backups and oh and you don't have any bitcoin That you know, right? I mean if there was a clear line That someone had given out before this point that said, you know, here's where we will do rollbacks I would have no problem with it. You know, I either agree with that and use mouth gosh where I would disagree with that and go somewhere else um The the issue that I think a lot of people are having right now is just the the uncertainty that this is added everyone Just I think before this one assumed us to the trade the trade is done. There is no going back. There's no, you know and It's a little weird in that the The scenario they're trying to play out now with the rollback The buyer is basically going to get most if not all of everything they had back mount gox is going to have pretty much Very little in the way of responsibility for this The only people who are going to come away from this negatively were the people who had buyers executed that got canceled and there are probably a lot of you out there saying well, that's how it should be and If that's all we had agreed to to begin with then I would be completely okay with that what I'm you know What I don't like I guess is the the uncertainty factor This is thrown into everything now, you know Am I going to have to wait 10 days before I spend any bitcoins before I spend the microwave a day an hour? You know, where did that line just get moved? Right. Let me ask a lot of people are asking this. I know that you already told me this but for the audience After this trade happened, how many bitcoins or dollars did you withdraw? I got 643 bitcoins That's true that I am holding on to and not touching until we decide what's going to happen with this But I ended up with 643 which I think is One other point I was hoping to make publicly here too was that Some of the statements that mount gox has been making about exactly what has happened is this Well, I'm not at all implying they are not being truthful I don't know that they're explaining it the way that people are understanding what happened You know the statement that's been on the mount gox website since this happened has said You know the the hacker is the one who compromised an account sold all the bitcoins Bought them all again and then tried to withdraw them And while I don't know that this is what they intended to say I think anybody who reads that sentence is going to think that this hacker is the one who made this gigantic buy not me Right, and that's how they are justifying doing the rollback is that that's the only way they can prevent This hacker from benefiting from this unless you are the hacker then that's very misleading To say the least I'm here showing my face showing my name Well, maybe it's true what they say this really is the world's stupidest hacker You're getting on television and telling telling the world you did this, but you didn't do this. We'll make it clear You didn't do this I just got lucky in pressing, you know, that's it. That's all I did. I was lucky timing I had nothing to do with crash and you know one of the points I'd like to make too was I could have caused another crash If I really wanted to withdraw this whole thing After the crash happened, there was only like maybe a hundred bitcoins that I needed to to sell as humundous loss To crash the market again And then I would have been well under the $1,000 width a day limit and I could have taken the whole thing out And I didn't do that. Why didn't you do that? I just to be honest I thought that if I did that for one nobody would believe me. I wasn't responsible for it And second, I was really worried about what effect that would have on the whole community I have a stake in all this too And I was you know, honestly could not predict what that would happen and Was pretty much going to defer to the mount bounce people for how to proceed Never assuming that this was going to be one of their possibilities they were going to go forward with Wow, your brain must have been like smoking all these thoughts spinning around in your mind And you and you talk it over with your family and did you ask them what they think or did you do this all on your own? It was all pretty much happening too quickly to really do anything You know It was one of those we didn't know what was going to stop or how long it was going to take and we all were just sort of Watching what was happening going If we're going to do something, let's do it quick So I sort of did this on my own just watching what everybody else was saying in the chat room and went with it You know, I haven't heard I maybe had a touch maybe the chat room can fill us in I haven't really been reading any comments from anybody saying that they That they lost bitcoin, of course, we don't they probably don't know yet because they can't log into mount gox and see that's what's the problem of course, but They would have received a trade confirmation email if they had you know, I don't get this do we get the email So I think if someone was getting a bunch of email reports, they didn't expect I'm assuming would have heard about that by now How do you I don't even know about that because I we're in mount gox And I don't do we get a trade confirmation email when we do a trade? I don't think so. Is that an option you can turn on or something? We have an email address on our account and I don't think we've ever received a trade Confirmation from them though. Maybe it's just something that they implemented with newer Users or maybe it's an option that you selected somewhere. I don't remember ever getting a trade confirmation I heard somebody say that too, but I don't think we I mean we we've used it quite a bit We never received an email confirmation. So I know on my gmail account They were going straight to my spam box until I started unflagging them. So maybe Honestly, I don't know. I don't remember turning something on for that But I remember going into my spam box one day and seeing all those emails and had to manually tell it Not to and then that went on I've seen yeah, there's a lot of speculation reading in the in the forums You know the million million and one conspiracy theories coming out of the woodwork and you know people talk about how If the hacker had full access to the entire The entire machine obviously they wouldn't have had to do any of this They would just withdraw all the bitcoins directly if they had access to the machine and they could control it So obviously he must have whoever he she had the hacker was Um had full had access to the accounts and maybe was able to brute force apparently probably brute force the password and get into At least one account. Probably the one what seems to have happened and again, but this is this is a lot of speculation here, but um according to some of the statements that mount ox has made as an auditor was auditing some of their books Had access to their their database in a read only fashion And apparently was only supposed to be looking at certain things only verifying some numbers just You know, they've been going through some efforts to try to become more legal in certain areas and be registered in that sort of thing They were trying to have their books in a word before they did that and This auditor got their personal computer broken into in some way So somebody broke into the auditor's computer who then used that information to connect to the mount cop server And was able to get a copy of every username email address and encrypted password and While the passwords were encrypted It's becoming trivial now to be able to basically just try every possible password and see Which one produces the same encrypted mess that was stored in the file? And I think almost probably as a worst possible case here Using computer video cards is one of the best ways of doing that and this group here Everyone who's doing bitcoin mining has continued with massive numbers of video cards in them So anybody here could have launched this gigantic attack against these encrypted passwords Very very quickly. Wow Now there were people the moment it got leaked on IRC Running them through a scanner and coming up with some of the very simple passwords within seconds Wow, it's amazing. So this again, I'm going to repeat this to the audience Change your passwords. Do not ever use the same password for two things Make sure your passwords are 16 characters at long and your passwords should look like a bitcoin address You understand it should be letters numbers Symbols those little tilde things you can't remember it. It's okay Use free software like key pass x to manage all your passwords under one locked encrypted file And you can use it on your key pass x has a there's a key pass droid Um app that's free for your phone And you can have that file on your drop box use drop box and you've got that It's very convenient. You can also do it on you know mac windows and ubuntu linux So there's no excuse people. You've got to have a unique password for everything I don't care how inconvenient you might think it is We're not talking about email anymore and spreadsheets. We're talking about money So you've got to keep it locked up with a secure password and don't use the same password for two different things This is something yet and I have gone around around about I want a convenient password I don't have to look it up. Well, don't be lazy. Don't be lazy. This is money here And look what happened, you know, you can an investment of Five or ten thousand dollars or who knows how much can turn into a million dollars Or ten million dollars, whatever the case may be and you still have that lame little You know password that's your dog's name and your wife's anniversary. That is not cool You're going to lose it all So um and don't ever use the same password for two things. Yeah, there's a question here for kevin from the chat room If there is a rollback, uh, if it goes through the do you plan on taking legal action? And if and if so, are you afraid how legal action could affect bitcoin's value and government involvement? That's actually a really good question. I've had so many lawyers offering to represent me of this That I have just basically told them all back off. Um, the advice I'm getting right now Is to immediately filing junction preventing mount auction doing anything because One of the things that is kind of considered a Uh a principle of how exchanges work is once a rollback is executed and trading his resume You cannot do a double undo, you know, there's no going back a second time Right So even if I were able to I'm not at all saying I'm going to do this But even if I were to sue these guys win and say, you know, I won this judgment They can't go back however long that's going to take and redo it so I don't think there are there are really many legal options I have that wouldn't completely trash the economy because I think even just You know me going oh, I'm going to get an injunction place against mount gox would trash the economy instantly everyone pull all their money out And liquidity would fall to nothing and that would be the end of it, you know um So I don't if you want those cases where even if I won I would have lost because the bitcoins would be worth nothing at that point All right, so yeah, I mean you can you can it's kind of like uh crossing Crossing the crosswalk on green with us with a a speeding taxi and coming the other way you can be dead right and dead You know so you can end up with all the bitcoins in the world, but then they're worthless if the whole market is trash So obviously everyone's interest is in protecting the bitcoin The bitcoin, you know economy the whole entire bit bitcoin itself So at this point Okay, so we we we get the picture sort of Unfolding and evolving in front of our eyes as to what pieces are coming together about what happened here um There's obviously a lot of lessons for everyone involved both customers of the exchange sites, um ordinary people Um buyer sellers and all that and the exchange sites themselves mount gox I'm sure has about 300 things that they've learned from this And uh trade hill and all the others have too So, um, I guess the question is Now that you have explained what has happened and and your your point of view and your situation and what and all that What would you ask mount gox to do? What would you have them do? To be honest, first I would like some more transparency in what's going on You know one of the things that really bugged me is that within minutes of Of mark logging on to irc and seeing what happened one of his first reactions was to say we're rolling it all back Which seemed to me like a very abrupt decision that happened before there was really enough evidence disabled going on So I'd like to kind of know how they for this decision And really what happened because he's he's telling a lot of people basically, you know If we look at the total amount of money that was sold that's roughly 10 million dollars that was spread across You know 100 people He's asking all those people to give that up without really Telling them why they're doing that, you know, he's saying it's still a count. He hasn't really Come forward with any of it that I completely understand. He's got he's got things to do right now You know, I've been trying really hard to let him have some space to do that Before I'm all over him going. Hey, what about me? What about me? You know, I I think the longer that the exchange is down the worse Things are going to be for everybody So until things, you know, until he's here to the point where okay, we're going to get things back up now That's what I want to talk to him about what's going on Right. Yeah, this brings up a you know, we've talked about this before but it brings up a good question as far as Like a free open source exchange software software as opposed to a proprietary and will that I might show my ignorance here, but would that help any at all? Do you think if if we had more of a free open transparency type of software? I think that would that would be a first step I think still no matter what as long as there's somebody who's running it Who feels that they can go in and manually change the database to undo something they didn't agree with That's still a problem, you know, and I think that's really counter towards how bitcoin works You know, if I give you bitcoins, there is nothing I can do To undo that later, you know, so I think that's we need to come up with some kind of exchange system Where the exchange works under similar principles, you know, it's all cryptographically signed. It's all You know mathematically proven that once something's done, it's not undone To at least make me feel more secure about this because It's kind of shaking my face a lot of things, you know Yeah So I mean in general Do you okay if you were running an exchange site, would you I know that you're saying that if if you are going to do rollbacks Then you should announce that that is a possibility if you were running an exchange site, would you post that rollbacks are a possibility and under what conditions would you Say that rollbacks should should happen I'm I'm not supposed to get you rollbacks at all actually, you know, if I were running a site like this I would I would probably very clearly have something but at the same time I don't know if I would have my rollback policy to include something where if the exchange was Partially or fully at fault That I wouldn't cover those it's just trades And I think it's gonna be really hard for mount docks to later say that they had no responsibility in this happening whatsoever Mm-hmm So that's kind of where where I would be in that situation I would probably allow rollbacks, but with some very very clear policies up front and how like Like what what would the policies be though? Like I mean well two things two parts to this question I guess what would under what conditions or there's would there's be a certain type of condition that you would want that You would say rollbacks would be necessary and also do you really think that it's mount docks's Responsibility if they if there's a any kind of a flaw in the system or the system is hacked or whatever I mean They're a victim obviously mount docks is also a victim of the hacker as much as any more than anybody probably and Do you think that mount docks should be liable financially to make up for those losses out of their own pockets? Again, I'm really tournament because I really think mark is a good guy. I don't think he's being malicious here I don't want to say anything bad happened to him, but on the other side of that coin They're the only ones who are really able to pursue anything against this auditor to try to recover damages for you know This is someone who apparently was claiming to be some kind of professional like this Who was responsible for all this? They're the only person who could go after their liability insurance to get things reimbursed We can't do that So for some reasons they are I think they're responsible for that alone and others, you know People had been telling them for days there was a password problem and they kept reassuring everybody that everything was okay I still changed my password anyway, but You know To prevent it continually reassure the public that their exchange is secure and then later to be proved that it's not and they Probably should have known that it wasn't It's really hard for me to feel like they shouldn't have some liability in this Yeah, it's uh Some liability in this uh, which is covering it all it's the question obviously There's there's so many issues because it is unregulated. There's not uh, there's not a government Uh, you know fdic that's backing this which is a good thing. That's a feature not a bug. We all agree however You know, it is the wild wild west in a way I mean anybody can set up a bank basically anybody can set up a bitcoin bank You can set up your own my bitcoin.com or your own exchange site And for all of you who are thinking about starting your own exchange site live listen to this Pay attention and learn because it's more than just a computer and a code You got to have the uh, you got to have the the wherewithal to secure it And also to withstand a lot of stress because I always I always tell that that one thing I do not want to be involved with is Uh opm other people's money because when you're when you're managing other people's money Man, you are on the hook. You know, you lose other people's money. They will come after you and I really feel for mark in this situation obviously, I mean because Um, he's you know jed who founded mount gox and mark who now has taken it over our phenomenal guys and they are You know, they're they're doing a great great thing. Everybody has to agree what mount gox has done for bitcoin is Uh, really beyond compare they what they've made it strong mount gox is the price when you want to know What's a bit what a bitcoins worth? It's mount gox. So what they've contributed to the bitcoin community We have to keep that in perspective that um, it They're they're volunteers just like all of us. We're they're doing more than than probably any of us watching So the fact that we put all of our It is centralized to a certain extent And we're putting all of this burden and stress on them. They're coders. They're programmers, you know They're doing the best they can with what they've got or at least at least we hope they are But uh, basically they're holding on to other people's money And uh, it's a very risky dangerous game. So you really got to think it through It's got to be careful careful, uh, thought out process. So we're going to be doing a video in the next 10 well, yeah 10 p.m. Eastern time We're going to have mark himself from mount gox live who's going to answer all of your questions from the chat room And yeah in the next couple days, we're going to be doing a how-to video So watch for that too on only one tv.com a how-to video how to Back up and secure your bitcoins yourself on your own machine. Absolutely securely. So We're out of time we're we are out of time. So Come back and watch again at 10 p.m. Eastern time or 2 a.m. Tomorrow gmt And we'll have mark from mount gox here live to join us and thank you very much Kevin for joining us and telling your story And thanks to our sponsors who are providing this great show for you guys Absolutely, so till 10 o'clock. We'll see you then All right. Thanks for joining us