 Welcome to episode 7 of the Bitcoin Show. We're continuing our conversation right now with Kevin Day from Chicago, Illinois, who was the fortunate or unfortunate, depending on how you look at it, beneficiary of about $5 million worth of Bitcoin that he sort of accidentally bought at a penny apiece. And we're just continuing our conversation because we're getting into so many good things. By the way, one of the things that I wanted somebody brought up in the chat room just now is they're saying, tell people don't just copy their wallet.dat file that if you're talking about securely storing your Bitcoin on your own computer, we're going to do a how-to video. You don't want to just do this on any computer, especially not Windows because there are viruses in the wild that will actually look for your wallet file and steal it. So we're going to do a how-to video. So basically it's going to be how to download Ubuntu onto the ISO file and how to burn the disk, boot from the disk, and wipe out your entire computer's hard drive if you have to buy a brand new computer or take an old one or something, but use a fresh, virgin computer. And we're talking about if you have any kind of serious money, like more than a month's worth of income, then it's worth it. Dedicate a computer to this, install Ubuntu on it, install the Bitcoin client on it, and install an encryption program like TrueCrypt. And one of the things that they're saying is don't just copy the wallet.dat file. You have to actually close the Bitcoin client first. Make sure the Bitcoin client is closed, and then copy the wallet.dat file, otherwise you could get a broken backup is what I'm told. So Kevin, you were saying that the way you got this to go through is everybody, you're watching the market crash. So how long did it take to go from $17 to a penny? It was at least 20 minutes, and it was really agonizing 20 minutes, too, because you really couldn't do anything about the website while it was happening. I don't know how they really got this programmed, but it was, while a trade is still executing and it's still matching up buyers and sellers for one order, everything seems to be locked out and you can't do anything else. So it was a very slow, this is happening and no one can do anything while it's happening kind of deal. So it was at least 20 minutes, if not a little bit longer than that, of just going from $17 to a penny. Wow, and then the way you beat everyone else out is you were just smart. You benefited from the smart tax. So you bid 0.01, 01? Right. I bid 1 cent and 1 100th of a cent for the Bitcoins, because everybody else had five orders at exactly one penny. Nobody had one slightly above a penny. So I saw that was happening. Placed mine just the tiniest bit above the existing orders and just through dumb luck happened to get mine in and that executed, you know. Right, I mean, people talk about a stopgap or what do you call it, like some sort of an automated system that if the market, if the system sees the market crashing suddenly that it could put the brakes on, how would something like that work? Do you have any idea? Well, I know in current stock exchanges if the stock drops below a certain percentage during the day, trading's halted for a certain amount of time. And then if it continues to drop, it's halted again and that kind of thing. Just to give people a breather so that clear heads are making decisions, people aren't making panics. Which is what I think a lot of people were trying to do. I saw on IRC people screaming that they were trying to sell at $3 and it wasn't taking their bid. And I think they probably would have been glad afterwards that that wasn't happening. So whether the delays of accepting orders was an intentional stroke of genius or just a limitation of the system, I don't know. But I think that allowed some people at least to think about things before they were allowed to make a decision. And then what really I think gave me the most faith in the economy was how quickly it rebounded, it hit zero. I mean, the price was nothing. It rebounded to $12 in a matter of minutes. And there actually was a decent value of people going, there's no reason for the price to be this low. It really does have an intrinsic value of more than $10. Right, so yeah, I think that's a good idea. So as long as it's published clearly in advance that there's a break system that if the market falls more than some percent, I don't know what, 20% within a certain number of hours or minutes or something that just freezes all trading just to take a breather. I think that's a really smart idea. All the exchange sites might want to investigate that. One of the things that would make that difficult would be that when you're buying, say shares of Ford on the stock exchange right now, there's only one exchange that sells that. Here, we have multiple exchanges selling basically the same product. So if one of them were to halt trading and another one didn't, it may give people some advantages to be able to gain the system even further. We have to be one of those, all the big exchanges I think would really have to agree on doing the exchange. The rules, wow, yeah. It's sort of a centralized thing that I don't know if the Bitcoin community really is in favor of. Right, well, I think for the benefit of the entire Bitcoin community, it sounds, you know, as long as the rules are the same, I think that, and they're published that way, they're followed. If the rules are published, I would have no problem with it, you know. Yeah, I think it does make sense. What do you guys in the chat room think? 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Okay, so let's see, let's see what questions we have in the chat room if there are any coming up here. So to, I guess if you were, if Mark was sitting right here, what would you say to him? First, I'm really sorry this has happened, because I don't think anyone is coming out ahead from this. I don't think the hack got away with anywhere near as much as they were hoping to with anything. And I think this is going to really shake up the whole market for a long time. So if anything, I would want Mark to know that I want to help resolve this as quickly as possible and hope that he would believe that. What I would suggest him to do, I don't know. I definitely think they need to find a middle ground from what they're proposing and what I would like. I think they need to take some responsibility for what happened. And right now it seems like they're saying the only responsibility they have is to try to undo this. And I'm not sure that's really the best response, you know. I think that it sets so many dangerous precedents. Suppose I made a giant sale one day and the next day I decided it was a mistake. Can I now claim my account got hacked and ask him to undo it, you know? And has he really thought these things through? You know, there's a reason why Rollback's major exchanges are so limited and so well-defined so that people can't game it, you know. Is he implying now by doing this that he's basically insuring every account that's held with him? You know, is that part of what we're paying our trade fees for? Because it looks like that's what he's doing with his account. You know, if he's actually trying to say he's going to ensure these losses, can we all rely on that? You know, those are the kind of questions I would like to get from him before trading reopens because if your reopen's trading with so much uncertainty, I can't imagine it going anywhere but far, far down. Right. Do you believe what their story that it was a financial auditor and that had read on the access to the database and all that? I mean, does it add up to you this story? That part sounds plausible but sloppy, you know. I think when you're dealing with financial instruments like this, you need to be a lot more careful. You need to treat this like, you know, one of the things in my day job I deal with is credit card processing and the amount of security we have to go through to be able to handle holding a credit card number for a microsecond. Far exceeds what it looks like a lot of these exchanges are doing and I think maybe some lessons to be learned there by looking at how they handle security in terms of merchants. That part of the story I think is completely plausible. What I question is some of the other elements of the story though of who is this person who won and how did he get Mark's pension so quickly? You know, one of the things that Mark was saying was that, you know, a police report had been filed within less than an hour of when all this went down and that he was involved in all this, you know, how did all these things happen if there wasn't some existing relationship between these two? If there wasn't an existing relationship, why isn't that being made open right now? You know, is this an investor, is this a friend, you know, I know those are kind of wild accusations but if he doesn't answer these questions, it leads to the more questions. Right. Someone is tweeting to me saying, someone's offering Trade Hill Bitcoin user password hashes now, I don't know if that's true, who knows. You get all kinds of crazy stories that are unverified but, you know, that's the internet. The advantage is that if people are doing what you say and using passwords of that magnitude, even if it's encrypted, it doesn't know good. Yeah, I mean it doesn't do the attack right good, you know. Right. If your password is, basically the only way that people can break encrypted passwords is just trying lots of passwords to see which one ends up with the same encryption as the one in the file they've obtained. So unless they happen to guess your 16 character random password, they're safe. So anybody who's following advice like you and what other people have been saying in these past couple of days, is safe even if the database has gotten out. Yeah, as long as it's long and unique and so on, strong. They're reminding us that in the new version of the Bitcoin client, the wallet file will be encrypted by default, which is a very good thing. You still have to be concerned about keyloggers that you call a Trojan Keyboard Capture Virus or Trojan that can log on your keystrokes. You can't really defend against that. So that's why if you have any significant amount of money here in Bitcoin, you really want to use a brand new Virgin computer to back it up. And like I say, we're going to be doing this training video, a full production tutorial where we do it partly screencast, partly looking over our shoulder, how you take an old machine that's dusty in your closet or brand new when you go out and buy and basically how you install a fresh clean version of Ubuntu Linux on it, install the Bitcoin client on it and some encryption software called TrueCrypt and create a your wallet.dat file, put it into the TrueCrypt volume, copy your address out of it and then close the whole thing, back up the encrypted version to, maybe four or five or half a dozen Virgin thumb drives that you bought, maybe even burn them to a CD. And then when you're finished, of course you save the Bitcoin address and then you completely wipe the computer securely clean and reinstall the operating system and you're good to go. And that way you have a Bitcoin address that is only accessible to spend. It's like a piggy bank, deposit only. You can take this Bitcoin address and basically use your mybitcoin.com or whatever you want to use as your coffee money, pocket change and whenever you want to put money in your savings account you just send it to that Bitcoin address and that's your secure Bitcoin address that is only available on those thumb drives and even if somebody gets the thumb drive which of course you hide in multiple different places and so on, if somebody gets a hold of one they still can't use it because it's encrypted with a strong secure password. So we're going to teach people how to do that and obviously with doing it this way you're sure there's not going to be any viruses and you're not going to connect to the internet for any other purpose than to get the Bitcoin client and the encryption software and nothing else and so on. So if you follow the instructions precisely you basically have a piggy bank deposit only address that you can send bitcoins to and those never have to be online but you can still check your balance anytime you want with the, what is it called, block explorer. So we're going to teach people how to do that. It'll probably be like a 20 minute video but it'll be worth it because this is what people need. They really, really need a way to secure their bitcoins themselves. Offline, secured, encrypted. If they back it up to the internet, to the cloud somewhere, this file, securely then they could actually just go anywhere without taking anything with them as long as they can get to the internet and they remember their password, their bitcoins will be safe. Would you agree with that strategy, Kevin? Definitely. And that's pretty much what I did something similar with, you know, and I had this trade gone through I would have basically done exactly what you had said there too. You know, had I actually withdrawn all this stuff I would have taken everything and probably plus the top of steps for sure but what you're talking about is exactly I think good behavior for anyone to do something like this. So you know, you need to treat your Bitcoin wallet like it is exposed to cash hanging out of your pocket. Exactly. You know, I think if anything maybe the communities fail newcomers at expressing how important that is. So, you know, I think what you're doing here to educate people about this is really important because every time someone gets burned and loses money, that just makes it harder for us to convince people this is a real economy. Exactly. Exactly. Someone's posting in the B bit in the chat room that Trade Hill is back up now which is news, breaking news as we speak. They say, I'm trusting B bit, this is accurate. He is saying, it's scrolling, scrolling, hold on. Scrolled right off my screen. Anyway, Trade Hill is back up and they're saying that there have been a lot of hacking attempts to get in with obviously with Mt. Docs IDs and passwords and so on. So anybody that had a matching address they've kind of forced a password reset for security obviously. They're just taking precautionary measures to make sure everyone's safe and secure. Obviously, I think they're learning a lot from all this too. So, let's see, what is this? Enter this as an ideal Bitcoin. Ask Kevin if he thinks a rollback is antithesis to the ideal of Bitcoin. I think he goes against the spirit of it. Whether it was a correct assumption or not, I think a lot of people, myself included, assumed that the exchanges like this were operating under the same irreversible principles that Bitcoin themselves do. And if that's not the case, we need to document that better as a community. But I think there probably has to be a middle ground. I don't think it can be totally wild west and I don't think it can be totally regulated to the level of NASDAQ. But if it's a slippery slope, it really is, because everyone goes, well, this regulation would have prevented this problem. This regulation would have prevented this problem. If we keep doing it along that point, we're gonna have the same regulations as the NASDAQ. Yeah, exactly. That's the thing about, it reminds me of net neutrality. Everybody wants net neutrality. It's a wonderful thing and it's an ideal that it's all a level playing field. It's the way it's been and the way it should be and all that. But do we want the government to enforce it? That's a whole nother story. Because as soon as you start demanding that the government enforce it, you're actually demanding to give away your freedom to the government because they're gonna enforce it. They're gonna enforce all kinds of other stuff that they decide to throw in there. Right, and in this specific case too, I probably would feel more comfortable not having a market attempt to be the police in this and letting us go through the proper law enforcement channels to resolve this because I don't know that they're necessarily making decisions that are backed in law. And I'm not saying I'm trying to get away with something I shouldn't, but I also don't know if I feel comfortable with a kind of barely related third party to this deciding who's right or wrong and something like that. Yeah, because you pointed out, I think that one of the very few things that Mt. Knox does document on their site is that they will never be a party to a transaction, right? They're just matching buyers and sellers. And isn't it true that if they are taking it upon themselves to roll back or decide when to roll back as necessary and how far to roll back, they roll back one transaction too far or whatever, then aren't they a party to a transaction which is exactly the opposite of what they're promising? Right, and I've been getting a major amount of exchange education over the last couple days here. And one of the things I was told was there is a legal term called being a counter-party to a trade, which has specific meanings legally. And usually, say like a stock broker says they would become a counter-party to this trade, which means they're accepting some of the responsibility for if it goes wrong and they're sort of vouching for the authenticity of it and all this sort of thing here, where Mt. Goch specifically used the words, I don't even sure that's right, you are trading with other users of Mt. Goch. Mt. Goch does not act as a counter-party to any trade. And legally what that means is they're washing their hands of everything that happens and are just acting like a matchmaker. Some exchanges work where they're actually, the money goes through them and they handle every bit of it along the way. Some of them just work as being almost over the counter where here's a buyer, here's a seller, it's up to you guys to make things happen. And if that's what Mt. Goch was telling people they were doing, they're really overstepping their authority by performing a rollback. Right. And this gets into some legal things that I don't plan to understand because this is getting to some of the really in-depth market law that I'm not a lawyer. But the lawyers that have been talking to me said that they probably made a mistake in using those exact words. You know, where if this went through court that was well-educated in market law, them claiming we are not a counter-party to any trade means they did not have any authority to touch anything, that they told us that they did not have authority to touch something. And that alone right there is one of the reasons one of the lawyers who have been talking to me are telling me that this would be a surprisingly high chance of winning if I was going to go pursue this. Some people are suggesting that Mt. Rocks or any exchange sites should have insurance. What do you think about that? Well, I think what's almost happening right now is that they are implicitly saying they are insuring accounts. You know, here's an account got hacked and they're saying that they're going to do everything they can to undo this and probably make up the difference themselves. So whether they're offering it as a service or not in practice what they're doing in this case is offering insurance. And I would just like to sort of have that formalized about what they're doing. Is this a case of they're taking the money that all of us have been contributing to them to form a trade fees and bailing out a friend or are they making this an advertised feature that we all can rely on? It can't be neither of those though. Right, I mean this is actually reminiscent of some people have been into Bitcoin for a while. Remember the help Mt. Rocks froze my account with something like what was it, $45,000 or $60,000 in it or something like that and it turned out to be apparently someone had again hacked into someone's insecure password and hacked there with a brute force attack got into their Mt. Rocks account and then they were withdrawing $1,000 a day and I don't know if it was over three days or six days they got $3,000 or $6,000 out and they were able to track that through the Block Explorer and track those transactions and where they went and kind of forensically routed it back and they actually got a connection back to another Mt. Rocks account that had deposited some money and then shortly thereafter someone deposited some amount. I forget chat room you can help me but maybe like say $45,000 or something like that and at the time I think this was when Jed was still running Mt. Rocks and it was like right around the transition period as I recall and it was like this huge story blew up about how they froze my account and everyone panicked but it was because Mt. Rocks had kind of stepped in and in a sense they played police and said no this person is involved in this crime and they froze their funds and I don't actually know what happened after that if they actually did get some sort of authorities involved and in cases like this who are you gonna call? Somebody in Costa Rica or Japan or the US or who knows where? The person could have been in London or Russia. Right and this is one of the other reasons why I'm trying to say this is a very slippery slope that they're gonna claim that they're gonna keep doing this. If they're going to play police over this what happens if someone withdraws it to a country that has no extradition? What happens if they can't prevent it? Are they accepting liability for that now? And the other thing too is I think they're probably torn in the middle of this because they probably don't want to get involved in these sort of things because it's time consuming. There's risks of getting dragged into something that they don't want to be dragged into and it could very quickly become a mess for them but if they don't get involved in things like this I think they're probably very worried that they're gonna get some very unwanted legal attention. There's going to be the FBI coming to have tracks with them because someone complained that $5 million got stolen from them. And they don't want the arrow of accusations holding over everything. So I think they're trying to play the both sides a little bit. Right. Can you guys hear Kevin's audio as they're saying is a little bit low? Maybe bring it up a little bit when he's talking. So you were able, some people are joining us late. You were able to withdraw 600 Bitcoin, was it? I was able to withdraw 643 Bitcoins because at the time I placed the withdrawal the price was right at 63 cents because of some orders that were starting to slip back in. It was not a case of, hey, quick, let me cash out while I can. It honestly was a case of, I have no idea what's going on. There's a good chance the whole site's been hacked. If I can at least be the one holding up the hacker we stand a lot better chance of being able to fix any of this. Oh, we froze. Your audio and video froze. Wait for Skype to catch up here. While you're frozen. Oh, wait a minute, are you there? Can you hear us? Yep, I'm still here. Okay, your video froze, but that's okay. It'll come back up. And I'm sorry to interrupt because you froze anyway. But let me tell you this. Somebody's popping in the chat room telling me Citigroup hacker affected more customers at first thought Citibank and Citigroup was hacked recently too. It's not just Mt. Docks. This is happening in all kinds of financial institutions. We know about Sony and it's becoming famous. Hackers are getting more and more tricky. And Bitcoin is a fetus of an industry. But it's come of age. So it's really, really quickly come of age, obviously. People who had only pennies and dollars in it are now wealthy. Some people are very, very wealthy from it or whatever. There's a lot of money and a lot of capital in it. So we have to grow up. These institutions have to grow up and we're playing in the big leagues now. So they've got to secure it. And if Citibank is having trouble doing that, I guess that should make Mt. Docks feel better. They're not alone. Security is hard. One of my day jobs is handling very large websites that move a lot of money. And it's what keeps me up at night too. You can be perfect writing your code 99.99% of the time but if you've made that one little mistake that lets somebody in, the whole deal's off. And especially if they're dealing with unexpected growth that's making them have to spend all their time just making the site stay running because there's so many people flooding it and dealing with media interest and just handling their own growth, you don't have a lot of time to be going back and doing all those things that you said you were gonna do once it mattered. Right, exactly. It's now or never. Right. And I think that there are a lot of, it's like anything with technology, there are a lot of security experts who claim to be security experts but it's all relative. It's really a whole nother ball game, the league of these hackers that are coming out of Russia and who knows where China and all that. You just never know. It's probably just a cat and mouse game constantly trying to keep up with the latest ways to break in. And the public obviously isn't aware of the complexity of it. They're just clueless. All they know is I had my money in Mt. Gox and I trusted them. And so what do you think that this is gonna do to the reputation of Mt. Gox, this incident? I really think it's gonna come down to how much they're willing to spend to make the problem go away. If they are covering themselves first, which is what to some, this is myself included, what it looks like they're doing, it makes it really hard for us to think that they're looking after the future. So how they handle the next 24 hours, I think it's gonna dramatically change how the future of their business works. Who decides it's gonna take a loss on this is really gonna dictate everything to them. It's adding uncertainty and the market never likes uncertainty. Is there a certain dollar amount or big quit amount that Mt. Gox could offer to you for your inconvenience that you would be happy with? I'm obviously trying not to look at it that way. It's one of those, I'm more concerned with the moral aspect of it than the financial as much as my wife would kill me for saying that. I don't know. It's one of those, I've tried to weigh the pros and cons of anything I possibly do. And it's really hard to cope with a scenario that does not ruin things for everybody. I was sort of half fantasizing when I was like, suppose I did get at least $5 million worth of Bitcoins, I could never spend that. If I tried to sell all that in any reasonable amount of time, I'd crash the market just again. So it really- But you can hold on to it for a year or two and everything would be changed by then. Right, let me show you a lot of that. It's hard to say really. The whole economy is very fragile in some places and how one person can have such a dramatic effect over the entire market is frightening to some people. How they're going to deal with this is really going to be very interesting. If their response is to take any kind of responsibility for this and say, we will cover X, Y and Z, the rest we just simply cannot afford to, I think people would have a tough time saying they're still the bad guys in this. Where at the total opposite end of the spectrum, suppose this does come out one day that whoever was storing $500,000 as an employee of the company or whatever, there's probably a very good reason like whoever owns this account has not stepped forward yet. Suppose it is something potentially embarrassing to them and they made no effort to try to appease every party involved, they did not go after the auditor to try to get some kind of insurance payout for this, whatever, it becomes very much an us versus them market that. They're definitely not on the side of the community anymore. Right. Do you think that there's a certain amount of responsibility that lies on the customer, on the Mt. Gox customer, all of the customers, all of us who are putting all of our eggs in one basket where 90% of all the trades are having a one exchange. I mean, I know there weren't options really. There were no other choices and so recently, but everybody relied on Mt. Gox and maybe too much so and Mt. Gox wasn't prepared to handle the volume and the security and the growth. And I mean, people said in the forum, I was reading that you can look at, obviously everyone now can look at the user list, some 60, some thousand names and so on and that it doubled in the last few weeks or something like that. The growth has been so, so fast. It might have overwhelmed them as far as the growth, the number of transactions, the volume, all that. I mean, the only thing people notice is, look at the volume, look at how much money they're making. That's all they know. It's like, wow, they're making so much money, they should be able to handle this. Yeah, that's easy to say, if you've got all the money to begin with, but they didn't have that money. That just suddenly happened and boom, one guy now build infrastructure that's gonna rival Citibank. No, and that's a really good point. I don't think just because they've made a small fortune off this that they are suddenly, that alone makes them responsible for what happened, which I know some people are saying is that, they've made 1.2% basically off of every trade going through, that alone has made them very wealthy. But they're probably also in the same situation where they cannot sell large amounts of it without substantially affecting the market. So they would probably be in the same situation. But at the same time, the fact that they are able to make things right at least gives them some more options than the one they're presenting right now. If it were really a case of this were a completely nonprofit, we charge no fee, but it's all just us doing our best effort kind of deal like the way a lot of the mining pools work. I don't think anyone would be going, hey, you're responsible for what happened. You have to do this. The fact that they have been making this commercial service and we've all, everyone who's used my product has paid into their infrastructure for this system, I think does make it harder for them to claim they have no responsibility. You know, we're customers now not just the community that's all benefiting off of each other. You know, they definitely made it a, you are a customer of our relationship. Right. What do you think this is gonna do to the price of Bitcoin in the immediate future, like now, today, tomorrow, this week, and in the long term, six months from now? I think the uncertainty alone of all of this, even for getting anything I've mentioned in this, you know, just the uncertainty of what's happened is probably going to drive prices down for a while just because, you know, no investor likes the uncertainty. They try to, I think we all look at what the worst case could be, what the best case could be and try to aim in the middle. And every time the worst case gets further and further down, our average goes with that. And people price that into to what they're willing to spend, so I think, you know, I don't think this is gonna destroy the economy, especially if everybody involved in this works together. You know, I think everybody involved here there also has a chance to destroy the economy if they wanted to, you know, if Mt. Rocks were to run off with everyone's money, that would be disastrous, you know. Right. If the legitimate owner of this money decided, you know what, I like what happened when I did that. I'm gonna do that again. That would be another humongous blow to the economy, you know. I think if I lawyer it up, got injunctions placed and cast this huge doubt over if people could ever withdraw their money from Mt. Rocks or not, that would be the end of them as well. And so I think as long as we're all playing together going, you know, this is a really bizarre situation, let's get past it. I don't think there's gonna be a long-term effect by this. I think we're gonna look back at this and go, oh my God, what just happened, you know. But it's not going to be the defining moment of Bitcoin. Right. As far as we all work together. Exactly. Is that your message that you want to work together for the betterment of Bitcoin and get past this? Definitely. You know, I mean, I've been hope people seeing the actions. I mean, I know you're taking my word for this, but that the actions I have placed so far kind of show that I'm not after a quick buck for this. You know, I could have strewn over the whole economy and didn't. You know, I could have had all these in my wallet right now and Mark would be coming to me asking for them back. You know. Right. So I think, you know, I'm trying to show everybody my motives are at least good. Let me repeat that. I'm sorry to interrupt. Let me repeat that. What Kevin is saying is that he had the ability to withdraw these Bitcoin, but he didn't. You know, he could have actually withdrawn the Bitcoin, but he didn't do it. He actually thought if he did that would, you know, that we could shed suspicion that he was actually involved in this thing because he saw the thing happening. He saw the whole thing happening. And, you know, he went with it and he bought the Bitcoin, you know, who wouldn't. I mean, that's the whole point of being there is to buy Bitcoin. So he did it. And let me ask you this. Did you realize that, did you think this was a natural market crash? Or did you think that, did you have a suspicion that this was a fraudulent thing? Well, my first reaction to this actually was that, you know, there had been talk of people who own large botnets, you know, basically tens of thousands of computers that they have infected with some virus. There's been rumors that somebody has been infecting, you know, 50,000 computers and made them all mine Bitcoins without their owner's knowledge. And I had always sort of been just waiting for the moment that whoever did that tried to cash out because I think they're going to have, they're really only going to have one chance of doing that. That was what I originally thought was happening was this was someone just trying to cash out a lot of ill-gotten gains. Just dumping it fast, yeah. Yeah, and that honestly was what I thought happened until it hit a penny, you know, and I thought even somebody this stupid would not do that, you know. I don't care how much of a criminal mind you have and how much of a sociopath you are, you could have made more money by not doing that. You know, so then I was really trying to think of what someone would gain from making things hit a penny. And when I hit the thousand dollar limit, that is instantly what I realized that they were doing as well, was they probably were trying to cash out by making things crash. And that was why I did not want to do the same thing because how would that be distinguishable from an attacker was a tempting to account for. Exactly, then you really look like the attacker, the hacker. So, all right, I forgot my question now. But the point I wanted to make is that, you know, Kevin contacted me, you know, in the chat last night, right after the show aired with the guys from Mt. Gox and said, look, here's the rest of the story. It's not being fully disclosed. It made it look like the hacker actually sold the bitcoins to himself and another accountant and actually what happened is he was the one who purchased it, you know, sort of randomly and accidentally, of course. He wasn't involved in the hacking at all. He could have withdrawn the money from Mt. Gox right in the spot. He could have done it. He could have gotten away with it. And even though he wasn't involved in the hacking and he did a legitimate trade, he would have had the money on his computer and his wallet. And then Mt. Gox would be coming after him and saying, please, please, please give us our five million dollars worth of Bitcoin back. And then this whole, it'd be a very different story. It actually probably would be the end of Mt. Gox, I don't know, unless they want to go to a reserve bank, you know, a fractional reserve system and it'd be in debt to their own system for that much. But that would have changed the whole story. It probably would have shed a lot of doubt on you, Kevin, that you were, you know, people would jump to conclusions. You know that. That's why you're smart to not do that because people would immediately say, yeah, yeah, yeah, that's too suspicious. This is no coincidence. He's followed the money and all that common sense, quote, unquote, it would, you know, at least circumstantially, it would look really bad for you. But obviously you didn't do that. Obviously you're innocent. You wouldn't be coming forward and talking on television about this if you were the hacker. What would the point of that be? So. One of the other points I was really hoping to make by coming out of public from this was that right or wrong, and I'm not claiming any malicious intent whatsoever, is that the Mount Docs people seem to be implying that the whole reason behind this rollback they want to do is that the hacker is the one who bought all these coins and they have to undo that, otherwise he's gonna benefit. And I see people repeating that line as well. And I'm not saying I'm more deserving than somebody else's, just that if we're gonna have this discussion, let's at least have the facts correct before anyone is in support or against support of doing something. And if, to be honest, the way that it's phrased on the website, I mean this in the utmost respect, I only know one language. I know English is not Mark's first language and it is very ambiguous which way it means. But the other night I was in one of the chat rooms. I said, hey, look at this line right here. What does that mean to you? Do you read from this that the person who perpetrated this is the one who's going to benefit unless the rollback happens and it was unanimous, everybody thought that's what it meant. So I really pushed Mark to try to at least reword that because for one, I was telling people, I'm the one who has all these Bitcoins. He was telling people the hacker is the one who has all these Bitcoins. People are putting those two together saying, Kevin is the one who hacked the site then. Right, yeah, it's misleading. I was fighting an argument that didn't even make sense. So I'm trying to clear the situation right now at least say, before you come out saying, Mt. Gotch, you have to do a rollback. Understand who's involved. And it's not just me either. I got less than half the Bitcoins that were bought up. There are, it's impossible to tell which accounts bought. Was it one account that made 10 buys or 10 accounts that bought one buy? But there were hundreds of other buys that were coming in. There was otherwise no way these Bitcoins were going to sell. Somebody was buying them. All these people who bought some at various prices all did so in good faith. So before all of that gets rolled back, let's at least have the story straight. Right, yeah, I mean, I'm all about full disclosure and giving people as much information as possible. I'm an advocate of free open source software and everything, all that, and transparency. And that's the whole idea behind Bitcoin, the Bitcoin, the ledger is public and pseudonymous or whatever. But the idea of transparency, especially in an institution that you're trusting your money with. So I think that it really is important that nothing be misleading intentionally or unintentionally. So I think it's really important that people understand the hacker did not benefit if he did apparently only $1,000 worth. Kevin was the beneficiary of all this vast amount of Bitcoin. But he didn't actually get it. It's in his, you know, Mt. Gox account which is locked up like everyone else's. And if a rollback happens, he won't have received anything except for the 600 Bitcoin that you withdrew at that moment, but not the vast majority of it. So, you know, someone says, Kevin's employing reverse psychology that he's really the hacker and he's coming out because then everyone will think he's not. Which is so ridiculous because obviously, you know, he didn't benefit anyway. So, you know, that would probably be pretty stupid. I have a feeling that we'll probably never know who did that because they have no one that would come forward now. They can't brag about it because as far as we can tell, they failed. You know, all they did was cause some trouble and the people who were in it to cause trouble would have been bragging about this already. So, I think this was an opportunist who was trying to make a quick buck, didn't and giving away his identity now is gonna do nothing, you know. Right, right, okay. Well, a lot of questions and a lot of concerns. I'm glad we, oh, one more thing. There was a major transfer that happened right around the time of this crash, right? Have you even read about that? Was it 300,000 Bitcoin or something like that? And what's your take on that? Mt. Gox says that it was a routine transfer to transfer their Bitcoin out of one of their wallets to take it offline. What do you think, is that related to this crash? I think it was probably, you know, if what they're saying is true, it's probably a very prudent thing for them to do. You know, if possibly their entire system has been compromised, at the very least they need to move, they need to treat their wallet as compromised and move all the money to a different wallet or they risk losing everything. What kind of concerns me though, is if that is all of their money, that's far less than I think a lot of people assume they have and holdings right now, you know, which I think is maybe the bigger story here. Do they only have 400,000 Bitcoins? You know, was one person holding, this is one person here had more than 500,000, did this one person hold more than half of their inventory and is that why they're so desperate to have it back at the mall? You know, if 400,000 is all they have, they are very uncapitalized compared to, I think, what a lot of people's expectations are. What couldn't they have just been creaming off the excess, like with all the growth and all these new deposits, they were just, every once in a while they're peeling off the excess to keep it within, you know, a reasonable percentage. And that is possibly conceivable too, but I guess if I were in their shoes, I would treat everything as compromised, you know. Even if I had the other wallets that other things were in stored on flash drives that weren't plugged in, how do I know that when I was doing that, that computer wasn't compromised, you know. The prudent thing would have to be to treat every Bitcoin they have as potentially compromised and move them all to new wallets. And that was the only large transaction that's happened in this time frame. So, you know, again, this is really speculation, this is reading a lot into something that we're only seeing on a single number here. But, you know, they took credit for that transaction saying they were moving their money to somewhere safer. My question and response is, is that all you have right now? You know, that really changes this whole story there. Yeah. What do you think about? Somebody potentially just walk off with 60% of their deposit. Yeah, that would change everything, wouldn't it? What do you think about transparency and exchange sites? Should these exchange sites publicly disclose all their holdings and where they are wide open glasshouse transparency? I think people now are gonna demand that, you know, or at the very least start asking for more of it. You know, all we have right now is faith that they have not overspent what people have deposited in them. You know, if this causes a run in things when it reopens, we're probably gonna find out. I'm really, I don't think that's true. I really don't, you know, I'm really under the assumption that they have been honest with us, you know, and that they have not gone into a secret fractional reserve. Right. Yeah, I mean, we're obviously trusting everybody that we have our Bitcoins in the cloud. The, but obviously, you know, it's a whole different game. When you trust someone, you trust someone with five bucks. You trust somebody with 10 bucks. You trust somebody with a hundred bucks, thousand bucks, 10,000 bucks, a million bucks is a whole other story. You're a whole different league. And this, you know, Bitcoin has doubled so many times. People who just had little play money and pocket money in there suddenly have the majority of their net worth in it. So it's just happening, what I call internet time, internet speed, it's just happened so fast it's caught everybody off guard. Like, whoa, wait a minute. You know, I talked to some, one of the hackathon guys who started mining like way, way back many months ago and he turned on his computer and immediately made, you know, 200 Bitcoin and then he shut it down and said, oh, that's silly. And he went and did something else. And now, and then later he discovered how much a Bitcoin is worth. And he's like, whoa, where is that old computer? Let me find this Bitcoin. You know, it was just, it was absolutely trivia. It was like two bucks or something or whatever. And then maybe it was 20 bucks. And then he, and now it's really worth some serious money. So he's like, whoa, I could actually buy a whole new system with that. But obviously everyone in Bitcoin who's been involved for more than a month or so has experienced that. It's no longer play money. Right. And I think it's been a growing experience for everybody that went from play money, you know, and you know, what I think is really funny is that a lot of people don't know this is Mt. Gotts stands for, you know, that the word Mt. Gotts is Magic the Gathering, online exchange. It used to be a trading site for Magic the Gathering playing cards. What is that? That's an online game? Yeah, it's a card game. Like it's sort of like, you know, role playing Dungeons and Dragons sort of game, but with cards. That's what Mt. Gotts used to be. And I have nothing against that. But you know, we're talking about tens of millions of dollars here stored on a site that not too many months ago to limit what they did was selling cards, you know. Yeah, game cards. It was like the eBay for this card game. And you know, that's how quickly all this grew up around it. And it's sort of a culture shock to everybody. Suddenly people with resources and money and everything else are all involved. And you know, do we suddenly grow up and play like adults? Or do we still keep this the way we had it before and it's the Wild West? Right, exactly. Everything is changing. So, so fast. All right, well, I think we're out of time. Again, I can't believe it. We could just talk forever about Bitcoin and there's never any conversation. We may have you on again and I'll, you know, we'll be in touch and we'll, you know, hash it out at 10 p.m. Eastern time, which is 2 a.m. GMT tonight. That's 10 p.m. here, 7 p.m. in California. And 2 a.m. GMT. Watch us live again and we're gonna have Mark from the owner of Mt. Gox on live with us. And get all your questions prepared. Write them up and get ready to put them in the chat room and we're gonna ask Mark live about all of these details. And I'm sure everybody has a lot of questions and we'll be interested to see what he has to say about all of this and maybe we'll have you on again soon, Kevin, and see how this all hashes out once they, so to speak. Once the dust sows. Eat your audience to see how this turns out. Yeah, exactly. Okay, thanks for joining us, everybody. And until 10 p.m., we'll see you then. Yes. Oh, of course.