Friday, February 28, 2014

Mt Gox: Criminal or Careless?

In recent days, there have been a lot of contradictory reports about a large theft at the Mt Gox Bitcoin exchange. Their bankruptcy filing reported that USD $425 million worth of Bitcoins appear to have disappeared. Mt Gox has done nothing to clear up the confusion, which has led to ever more speculation about exactly what happened.

Much of the information that is being reported has been sourced to a document that has been published on the Internet. At this point, Mt Gox has not validated the document, but many reports believe it to be genuine.

Reports have centered around a known weakness in the Bitcoin infrastructure, known as "malleability." In attacks based on malleability, hackers slightly vary the information in packets about legitimate transactions and flood the exchange with fraudulent information. The exchanges then need to validate every transaction to see which transactions are valid. Most exchanges have built in safeguards to deal with attacks based on malleability.

Serious allegations are being raised that fraud within Mt Gox may itself have been responsible for at least some of the loss. In 2012, Mt Gox reported about USD $380k in revenue. But in 2013, the company had to pay out a USD $5 million fine. Financial reporters are not clear on how Mt Gox was able to keep its doors open after this fine, but there are several reports of slow payments after the fine was paid. Financial reporters have noted that some consider this to be an early warning of a company doing business on a fraudulent basis.

At the very least, it appears clear that Mt Gox continued to do business even after discovering that it was vulnerable to a hacking attack.

Monday, January 13, 2014

No Experts Here

Utah's Supreme Court filing on gay marriage contained an unusually frank admission about the depth of thought that the state government put into its position. When discussing the conclusions of professional groups who disagree with its arguments, Utah stated "we are not ruled by experts."

Seldom has a phrase done more to encapsulate a group's position than this phrase does. Utah's government may as well have stated, "don't confuse us with the facts, our mind is made up."

Arguments in court confirm that this is a correct reading of the state government's indifference to what serious study of the questions may indicate. On Dec 4, Judge Shelby asked whether same-sex marriage was of “any relevance at all” to the state's stated desire to promote heterosexual marriage. Stanford E. Purser from the state Attorney General's office said, “It may end up that there is no difference. It may end up that there is. We just simply don’t know.”

Thursday, January 9, 2014

Snow Trolls Re-Appear

As happens at least once a year, the appearance of chilly weather has brought out the troop of climate change deniers that Chris Hayes has dubbed "Snow Trolls." As it turns out, the re-appearance of cold weather is a phenomenon known as "winter" and is brought on by the earth's axial tilt. (By the way, that last link was to a nice gif illustrating axial tilt.)

All of this has been said ad nauseam before. I have to wonder if the snow trolls are cynical, stupid, or just care more about scoring political "points" than thinking about actual facts. Then again, it doesn't really make much difference.

What I find most distressing is that people seem persuaded by this strange illogic. Just walking around town, I hear smug morons cheerfully parroting whatever Fox "News" is vomiting forth. Maybe Jon Stewart is right, and the best thing to do is to just laugh at them.

Part 1:

Part 2: