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back to article Brit Bitcoin dev: I lost 'over £200k' when MtGox popped its socks

A leading British Bitcoin dev who claims to have lost more than £200,000 in the collapse of MtGox says he has written to Japanese police asking them to take action. Under the name Rebroad, Richard Broadley is one of the world's top cryptocurrency software developers, placed as the 12th most active contributor to the Bitcoin …

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Oh really ?

Nuff said.

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Anonymous Coward

Yes really

He was g̶r̶e̶e̶d̶y̶ stupid enough to have both cash and coins deposited there.

Well I guess he was looking to avoid paying tax on those assets at home, now he doesn't have to worry about it.

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Disappointed with how naïve the dev is

Bitcoin is a total free for all.

The whole point of the wallet is that you keep YOUR bitcoin on your own terms. Easy to lose if you suck at data backup, but not controlled by any entitiy. A key to a sequence in the blockchain.

A Bitcoin developer should know never to trust another entity, as they should know full well that there is no legal meaning to the Bitcoin itself.

Don't invest in this volatile investment unless you can afford to lose said investment. Certainly don't cry about it afterwards when you lose you your pretend bits of verified data in an arbitrary sequence copied to many computers, backed by... nothing.

But these problems are the actual draw to the currency. If it was somehow regulated or backed, it would end up being just another fiat currency. The wild west approach works. People need to understand what they're getting in to, and you'd think a developer of Bitcoin would know that.

As for the fiat currency he had held with Magic: The Gathering Online Exchange, then that's a different story. However, I doubt Magic: The Gathering Online Exchange has many real assets left, and I would imagine their customers are not the first in line to pick for scraps after bankruptcy.

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Re: Disappointed with how naïve the dev is

Endlessly repeating the observation that MtGox used to be a game card exchange does not make you look any more clever than would blaming Nokia's current woes on the fact that it was a welly boot manufacturer.

On the specific point about keeping bitcoins in your own wallet, this is utterly immaterial. During the period running up to its disappearance you could not withdraw bitcoins from the exchange, no matter how much you might have wanted to.

And the losses reported in the article have absolutely nothing to do with the volatility of bitcoins. The allegation is that they were STOLEN. And if that is not, in fact, true, then there has been a FRAUD.

-A.

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FAIL

Re: Disappointed with how naïve the dev is

Totally agree, Piro.

Other commentators on MtGox threads have commented that when you either mined the coins or you bought them. If you mined them then they have no intrinsic value until you sell them. If you bought them then you lost the real world money as soon as you exchanged it for bit coins. Assuming this man was not trading on the darknet, then he was doing this for investment purposes. If he wasn't trading then he should have maintained his own wallet, not entrusted all his money to an exchange. It looks like he has lost the lot.

I had the same issue in 2001 when I invested real money in Telecoms shares. I lost the lot when the twin towers came down. My shares were worthless or pretty close to it. No time to cry, just have to get on with it. May be I should have written to the Afghan authorities and asked them to reimburse me; or perhaps the Saudis. It wouldn't have been worth the stamp.

I was always suspicious of the Bitcoin stuff. It sounds like: Hey, I have all this money, let me exchange it for a virtual currency, and for that I get a string of 0 & 1's. That's the proof that I own virtual coins. Now, let me give that string to someone else for safe keeping. That someone is in a different country, under a different legal system, and I really can't tell if I should trust them (hint here: I think we have proof that you can't trust them).

Virtual currency may be the future. But just as the the original IBM PC was no where near the best PC, and DOS was not a secure operating system, the first incarnation of a virtual currency was never going to be the best virtual currency.

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Anonymous Coward

Re: Disappointed with how naïve the dev is

Sorry, when the twin towers came down, did someone steal the money you'd invested in telecom shares from the stock exchange, causing the stock exchange to go into administration? Or could you simply not sell those shares at that time, and realise any real-world funds?

Because unless it's the former, your "same issue" is quite a different issue, that didn't involve the exchange being hacked, and forced into administration.

Did the market for telecom shares recover at some point?

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Re: Disappointed with how naïve the dev is

While I agree that property here was taken, and it's not nice and we would like to see a solution, I cannot help but consider...

How is it possible to steal "a numerical number"? (Yes, I know that phrase uses double redundancy :P )

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Re: Disappointed with how naïve the dev is

Nokia didn't go straight from rubber boots to modern wireless handsets. Your assertion is moot.

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Re: Disappointed with how naïve the dev is

Endlessly repeating the observation that MtGox used to be a game card exchange.....

is something that just never gets old. Nothing brings this whole story into sharp clarity faster than the realisation that these people had vast sums invested in "Magic The Gathering Online Exchange".

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Re: Disappointed with how naïve the dev is @D 13

You're spot on. Bitcoin certainly isn't the first thing to be bitten in the ass by some poorly thought out mission migration. What something was, remains forever, even if occasionally temporarily forgotten.

eBay got the shit kicked out of them for ages because the first thing they ever sold was broken. The only reason they bought PayPal was to demonstrate they were serious. Amazon gets kicked all the time & called a book store. NCR once actually made cash registers (there's a good book called The Incorruptable Cashier about those registers). The Electric Boat Company. Apple made absolute shit for decades. Internet Explorer was once the darling of the business world. McDonalds used to have a giant eggplant and an escaped convict for mascots.The North Face once made quality outdoor apparel.

The once was plays both ways. If the transition works and the company/brand is successful then it adds a lot to their history. A 'look how far we've come' kind of thing. If it doesn't go well it becomes a standard in business textbooks for ages. A 'should have seen that coming' thing.

What I really don't understand, is why they kept Mt.Gox as the name. It meant nothing to the new world of Bitcoin. If you're wanting to be a popular waypoint for people moving millions in valuable goods it's kind of weak to keep the old name to save registrar fees.

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Re: Disappointed with how naïve the dev is

For a start, transaction malleability as an issue in the Bitcoin protocol is credited with a lot of the losses from this particular exchange, and was a known issue for a long time.

If they didn't have the BTC, they could not refund it.

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Stop

Re: Disappointed with how naïve the dev is

Hey, I have all this money, let me exchange it for a virtual currency, and for that I get a string of 0 & 1's. That's the proof that I own virtual coins. Now, let me give that string to someone else for safe keeping.

As opposed to what we all do with 'real' currency.

Hey, I have all this money, let me give it to my bank in exchange for some ones and zeros (or maybe some ink marks in a book). That's the proof that I own money.

Of course Bitcoin is a far bigger risk and I wouldn't touch it with a bargepole but all of us trust other people to look after our wealth. Most of us labour under the illusion that banks are 'holding our money for us' when in fact they are taking it from us in exchange for a promise that they'll give us some back if we ask.

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Re: Disappointed with how naïve the dev is

It would be interesting to know how much he's lost as a proportion of what he had - if it's most of it, he is indeed foolish, and surprising for a Bitcoin developer. On the other hand, maybe he is filthy rich (not implausible, for someone in to Bitcoin from an early stage). Why go to the police if it's only a small amount? Well, I'd still report theft of my wallet to the police, even if the cash on there was a tiny fraction of my wealth, most of which is stored in banks.

Your arguments about "pretend bits" "backed by... nothing" make no sense; modern currency is not backed (by definition of being "fiat"), and I don't think being virtual stops this being theft (or some kind of crime at least - if a hacker causes damage to information which results in a loss, good luck claiming it's just "pretend bits").

Plenty of Bitcoin supporters and users would like regulation and certainly more security, I'm not sure how many want "wild west". Different people have different views. Bitcoin doesn't need to be "backed", as Bitcoin *is* the thing being bought (gold isn't backed by anything else).

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Re: Disappointed with how naïve the dev is

"I was always suspicious of the Bitcoin stuff. It sounds like: Hey, I have all this money, let me exchange it for a virtual currency, and for that I get a string of 0 & 1's. That's the proof that I own virtual coins. Now, let me give that string to someone else for safe keeping."

It's the last bit that's the problem, but that isn't part of Bitcoin, rather a problem with using online wallets (including keeping large amounts on an exchange).

"Virtual currency may be the future. But just as the the original IBM PC was no where near the best PC, and DOS was not a secure operating system, the first incarnation of a virtual currency was never going to be the best virtual currency."

Possibly, but don't underestimate the network effect. And to go with your analogy, whilst today's computers are far removed from an original IBM DOS PC, we can still trace a heritage where hardware technology in today's x86 machines that still dominate computing evolved from that IBM PC, and where competing platforms died out (68K, PPC, even Macs switched to being a brandname based on the x86 hardware that everything else uses); and the OS running on 90% of those machines evolved from a family of operating systems descended from DOS.

Also there is the issue, as I say above, the problem here is not with the currency itself, but what happens when you give that currency to someone else to "look after" it. Other competing virtual currencies still have that same problem, AFAIK. I'm not sure how this could be solved by the implementation of the currency itself? Note, Bitcoin already offers the ability to store the currency yourself, and trade for other currency yourself, it's just that online exchanges are much more convient for doing trading. I did once use an exchange where you can trade direct with people, but it's less convenient to use.

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Re: Disappointed with how naïve the dev is

Except that if my bank fails, a certain large amount on my account is actually insured, so it will be replaced. I can easily keep under that amount, guaranteeing that I will always me made whole.

What are the odds of MtGOX's customers being made whole?

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FAIL

"Richard Broadley is ... 12th most active contributor to the Bitcoin protocol ... He is one of a number of people who contacted The Reg to ask what to do if they had lost their Bitcoins"

..and there's the problem with bitcoin. If one of the guys writing the code doesn't understand it, what chance does anyone else have?

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The problem with Bitcoin @justin - it has no sponsor

I agree the techo babble does not make bitcoin a currency. But it is worse bitcoin does not have any strong sponsor backing up it's value.

As illustration of the risks of Bitcoin as opposed to the more established FIAT consider the following hypothetical situation.

Take for example a small country previous part of a union with another larger country declares independence and starts to print exact copies (forgeries) of one of the popular FIAT currencies. How would the state whose currency is being ‘forged’ react?

I am guessing that after a certain amount of diplomatic ‘cease and desist’ the respective owners of these currencies will react as below:

GBP - SAS slips across the border destroys the printing plant and all stocks of currency

EUR (France) – the Foreign Legion invade the place, destroy the printing plant etc. Plus the DGSE sink any ships registered to the example country

USD – take off and nuke the place from orbit

And so on ….. oh yes and what does the bitcoin hegemony do?

Bitcoin – anonymous attack randomly selected web sites

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If they'd just called it Bit-Tulip instead...

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Boffin

Re: The problem with Bitcoin @justin - it has no sponsor

It's not possible to print Bitcoins though, is it?

The closest situation would be if someone found a bug that make it possible to give themselves extra bitcoins in the block chain. In which case the response from the "bitcoin hegemony" would be to patch the bug. And if it was severe enough roll back the block chain to undo the damage.

And hey, no one gets blown up. That's plus, right?

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Def
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"12th most active contributor to the Bitcoin protocol"

Wouldn't it be ironic if the security flaw that lead to this theft were traced back directly to his code...

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To be fair to Bitcoin developers, developers in the financial community are some of the worst software developers money can buy. So the Bitcoin developers are in good company.

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Re: The problem with Bitcoin @justin - it has no sponsor

"But it is worse bitcoin does not have any strong sponsor backing up it's value."

So you're suggesting something like "iBucks", "Amazon Gold", "Google Cash", "Windows Dollars 8.1 Home and Office", or "Oracle Coins", then?

Ew, I just had a chill... going to go hide under the covers for awhile.

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Re: "12th most active contributor to the Bitcoin protocol"

Wouldn't it be ironic if the security flaw that lead to this theft were traced back directly to his code...

One thing I learnt early on in my programming career was to tone down the outrage when I found a flaw in a project I was working on. Because sometimes (whispering) the stupid careless prat who caused it is yourself.

The only thing that's changed of late is that now the flaw in someone else' project can sometimes be traced back to my project. That's the ugly side of everything being on a network and SaaS :-/

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Anonymous Coward

Brainy but no common sense...

Proof that even smart people can be unbelievably stupid at times. Why was this genius keeping £200,000 of bitcoins he had no immediate need to be actively trading on an exchange? An exchange that for years had a record for incompetence and lax security? Instead of in multiple encrypted geographically-diverse copies of a cold storage wallet?

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Anonymous Coward

Hummm seems that Bitcoin community has a lot of growing up to do... If this "leading" dev is representative of their mindset. I love it when freetards run to the authorities and cry for protection at the merest knee scratch.

You might have noticed that most stable currencies are backed up by a society with a strong legal & enforcement system ... to protect users of the currency against such mishaps. If you create a currency without any mechanisms to protect its integrity and outside of the usual legal frameworks - don't expect the law to come to the rescue.

Oh Wait! Should I also call the Nigerian police because the widow of a Nigerian prince who promised me millions of pounds never called back after I sent her £5000....?

Or maybe I should call sue Microsoft because my pirated version of office is full of malware?

~~~ Thanks for the laughs.

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"Or maybe I should call sue Microsoft because my pirated version of office is full of malware?"

That's not malware, that's how it's meant to run.

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Anonymous Coward

Oh you mean I can sue them then? :-)

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Re: freetards

> " I love it when freetards run to the authorities and cry for protection at the merest knee scratch."

At over £200k, that's some pricey knees.

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Pirate

Re: freetards

Maybe he can sell the knees to Mark K who'll presumably be needing new ones sometime soon after his 'investors' catch up with him.

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Anonymous Coward

Re: freetards

saqme way as the local pikey camp call the police when someone catches them stealing and gives them a kicking

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I wasn't aware that there is a "community", that one person is now magically a figurehead for. But I guess arguing against straw men is easy to do. Your analogies aren't even vaguely relevant.

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Anonymous Coward

I keep all my bitcoins in a toaster.

Safer this way.

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Re: Toaster

> "I keep all my bitcoins in a toaster."

As long as you never put a sock in it:

http://www.youtube.com/watch?v=eoBYYElyP4c

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>I keep all my bitcoins in a toaster.

In Cylon - I mean Bitcoin - Finance, toaster keeps you.

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Coat

Once you eliminate the impossible...

"Do you know anything about what happened at MtGox? Get in touch and let us know. ®"

The only logical inference is that the butler did it.

Looks like we'll be getting our own coats from here on.

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Re: Once you eliminate the impossible...

No. It was the Refrigeration Contractors who did it. Same ones that hit Target I reckon.

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Facepalm

Inconsistency

So... let's make a currency beyond the control of regulators and governments, but expect the authorities to sort things out when things go horribly wrong. Yeah right, that's going to work.

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Re: Inconsistency

It's not entirely unreasonable. You and I could trade in cars or stamps, and want to do it without interference from government, but also expect the police to act if the other party stole from us.

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Re: Inconsistency

Cars and stamps have real intrinsic value. If you started printing your own Monopoly-style money and using it to barter with your friends you couldn't expect the police to value it as anything other than paper and ink.

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Re: Inconsistency

Cars and stamps have real intrinsic value. If you started printing your own Monopoly-style money and using it to barter with your friends you couldn't expect the police to value it as anything other than paper and ink.

Glad to hear that anything that exists purely as a pattern of ones and zeros is fair game then. I 'm just off to download all the software, music, movies and games I feel like without paying the rights owner a penny. Either that, or your logic may have a teensy flaw in it.

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No, I've no idea either. Wanna buy some tulips?

"Do you know anything about what happened at MtGox? Get in touch and let us know. "

And that, in a sentence, sums up the whole thing really. I read a long article only yesterday which claimed it was going to tell me but turned out just to be a list of things it *wasn't*.

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Happy

Really?

A law firm with the name Selachii?

I'd be inclined to use them just for their sense of humour.

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Easy to be smug in hindsight and you have to feel sorry for the poor sod; but keeping £200K on internet-facing ANYTHING -regulated or not- is just asking for trouble.

I was toying with the idea of dipping a toe in around Xmas and the first thing I looked up was how to get my one (count them...one) potential bitcoin off the net. Glad I didn't now.

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Anonymous Coward

you have to feel sorry for the poor sod

No, I don't.

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No real banks are messing with BitCoins

Anybody notice that no real banks are messing with BitCoins? And all of the sites that are screwing around with them can't write basic financial transaction software?

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Anonymous Coward

Re: No real banks are messing with BitCoins

Sadly, there seem to be a number of banks that can't write/maintain basic transaction software.

And, lets face it, our banks are too busy playing around with complex derivative products to play with BitCoins, which are a small-fry compared to the games the banks already play.

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Tax deductable loss anyone?

This could be interesting - Dear Tax man, I lost (pick a number) of Bitcoins worth $MONEY$ so can I claim this as a tax loss against my income for the next few years?

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good luck on that one..

The Japanese police (Not any worse than the UK police though..) barely do anything when crazy drunk old farts are trying to kick your windows and doors in (true story) so I doubt they'll put much effort into chasing a crime that can't be traced back to anyone unless MK stole the coins or lost them/the passwords... I think the best he can hope for is that they get pissed off with trying to actually work out what happened and will revert to their normal tactic of questioning and bullying until they get a confession from MK that he stole real world money.

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They'll get right on that

I suspect they'll have their crack detectives working in shifts to get to the bottom of these shenanigans. Your money is totally safe dude, it should be getting back to you shortly after they have sorted out the nefarious details... Oh it just goes on. There's a sucker born every minute

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Asking the police to help for criminal currency...

People are completely out of mind nowadays.

The whole Bitcoin and cryptocurrencies are a huge fraud created by bankers.

It's all illegal. No taxes are paid on this money. There is no control. It's just dirty black market.

It's what bankers wanted to steal money quicker from people and move legal money from banks too.. so still stealing from people worldwide anyway.

Bankers must be jailed. And all the politicians that work with them and help them stealing money from people.

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