Re: [Bitcoin-development] Malleability and MtGox's announcement

[Troy Benjegerdes <hozer@hozed.org>]

I cannot judge the competence of code I've never seen, so I have no
position on that.

What I HAVE seen quite clearly is both overt and covert market 
manipulation under cover of blame for 'the developers', or 'the exchange'

You're doing it yourself with the phrase 'incompetence'. When you run an
exchange of that volume, then maybe you might be in a position to say so,
but if you were *invested* in a competitor to MtGox you'd make a lot of
money calling them incompetent, wouldn't you?

I'm looking to drum up some consulting business by making my observations
about market manipulation public, and if I can't drum up any business, at
least I can speak my mind free of any non-disclsosure agreements.

What do you stand to gain from your statements on this list?


On another note, is there any third-party archive of bitcointalk.org?
I much prefer mailing lists because *I* have an archive.

On Mon, Feb 10, 2014 at 11:39:19AM -0500, Christophe Biocca wrote:
> The bug MtGox is blaming has been documented on the wiki for years.
> Mark Karpeles was on IRC publicly discussing the topic
> https://bitcointalk.org/index.php?topic=458076.msg5052255#msg5052255
> MtGox's incompetence has been on public display since day 1.
> 
> I'm not sure what critical information you think secret cabals are
> keeping from you.
> 
> On Mon, Feb 10, 2014 at 11:14 AM, Troy Benjegerdes <hozer@hozed.org> wrote:
> > Okay, why the everloving FUCK is there not someone on this list with a
> > @mtgox.com address talking about this?
> >
> > I started using bitcoin because I could audit the code, and when the
> > developer cabal does stuff 'off-list' what you do is hand over market
> > manipulation power to the selected cabal of company insiders who are
> > discussing things 'off-list'.
> >
> > The people having a 'private' discussion about how to solve this are
> > TAKING MONEY from everyone else, by having access to insider information.
> >
> > I don't think any of the developers actually have a clue this is the
> > result, because a good chunk of them are employed by for-profit companies
> > funded by venture capital, and VC lawyers are very good at writing
> > employment contracts that provide plausible deniability of insider
> > trading.
> >
> > The press MAKES MONEY (okay, takes money) by manipulating markets,
> > and venture capitalists pay lots of money to ensure the market is
> > manipulated in ways they can profit from.
> >
> > Private market manipulation is one of the costs of anonymity and privacy,
> > and I don't really like paying for some off-list discussion of what appears
> > to be a serious scalability and usability problem.
> >
> > Bitcoin is such a powerful tool because it broadcasts transactions to
> > the network for everyone to see.
> >
> > Can we please broadcast some more technical details to this mailing list,
> > including exactly what MtGox is doing, and how they wish to resolve it?
> >
> > If you gave me the entire code stack that MtGox runs on under an AGPLv3
> > license, I'm pretty sure I, along with everyone else here could come up
> > with a workable solution. I think a code release would be a huge win
> > for MtGox as well, and would cement their position as market leader in
> > transparent cryptocurrency trading.
> >
> > Otherwise we are just a bunch of dinghys getting capsized one by one
> > in a sea of market-manipulating white whales. Isn't the closed door
> > market manipulation of the big banks one of the reasons we all started
> > using Bitcoin in the first place?
> >
> > Why do revolutions always put the same old bullshit back in power?
> >
> > What we need is some transparent code evolution.
> >
> > On Mon, Feb 10, 2014 at 01:28:42PM +0100, Pieter Wuille wrote:
> >> Hi all,
> >>
> >> I was a bit surprised to see MtGox's announcement. The malleability of
> >> transactions was known for years already (see for example the wiki
> >> article on it, https://en.bitcoin.it/wiki/Transaction_Malleability it,
> >> or mails on this list from 2012 and 2013). I don't consider it a very
> >> big problem, but it does make it harder for infrastructure to interact
> >> with Bitcoin. If we'd design Bitcoin today, I'm sure we would try to
> >> avoid it altogether to make life easier for everyone.
> >>
> >> But we can't just change all infrastructure that exists today. We're
> >> slowly working towards making malleability harder (and hopefully
> >> impossible someday), but this will take a long time. For example, 0.8
> >> not supporting non-DER encoded signatures was a step in that direction
> >> (and ironically, the trigger that caused MtGox's initial problems
> >> here). In any case, this will take years, and nobody should wait for
> >> this.
> >>
> >> There seem to be two more direct problems here.
> >> * Wallets which deal badly with modified txids.
> >> * Services that use the transaction id to detect unconfirming transactions.
> >>
> >> The first is something that needs to be done correctly in software -
> >> it just needs to be aware of malleability.
> >>
> >> The second is something I was unaware of and would have advised
> >> against. If you plan on reissuing a transaction because on old version
> >> doesn't confirm, make sure to make it a double spend of the first one
> >> - so that not both can confirm.
> >>
> >> I certainly don't like press making this sound like a problem in the
> >> Bitcoin protocol or clients. I think this is an issue that needs to be
> >> solved at the layer above - the infrastructure building on the Bitcoin
> >> system. Despite that, I do think that we (as a community, not just
> >> developers) can benefit from defining a standard way to identify
> >> transactions unambiguously. This is something Mark Karpeles suggested
> >> a few days ago, and my proposal is this:
> >>
> >> We define the normalized transaction id as SHA256^2(normalized_tx +
> >> 0x01000000), where normalized_tx is the transaction with all input
> >> scripts replaced by empty scripts. This is exactly what would be
> >> signed inside transaction signatures using SIGHASH_ALL (except not
> >> substituting the previous scriptPubKey to be signed, and not dealing
> >> with the input being signed specially). An implementation is here:
> >> https://github.com/sipa/bitcoin/commits/normtxid.
> >>
> >> Note that this is not a solution for all problems related to
> >> malleability, but maybe it can make people more aware of it, in
> >> tangible way.
> >>
> >> --
> >> Pieter
> >>
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