Trouble with MtGox that applied for civil rehabilitation proceedings and future Bitcoin

ByJason Benjamin

February 28, 2014 (Fri), net virtual currencyBitcoin(Bit coin) was a major exchange "MtGox(Mount Gox) "in the Tokyo District CourtI applied for application of civil rehabilitation law. MtGox, which used to handle 70% of bit coins traded in the world, is in the situation of losing the bit coin which had been possessed from the customer by the "bit coin thief" by cyber attack It seems that it was one factor that deteriorated the cash flow situation because it fell into that. What is the future of MtGox, which had been experiencing various problems so far, and the bit coin that was supposed to be closed up again?

The troublesome history of the bitcoin exchange MtGox | anders.io
https://anders.io/the-troublesome-history-of-the-bitcoin-exchange-mtgox/

◆ History of MtGox
The history of MtGox was launched in 2009Trading cardsAt the end of the exchange, I handled the "Magic: The GatheringMeaning an online exchange office "MAgic:THeGAthering,ONline eXYou can catch a glimpse of its remnants in the name taken from the initials of "change". We launched the initial MtGoxJed McCrevMr. P2P software which was widely used abroadEDonkeyPeople who are also known as genius hackers involved in the development of. In July 2010, Mr. McCreev changed MtBox's work from a card exchange to a bit coin exchange.

The bit coin invented by a mysterious person "Tetsushi Nakamoto" gave birth in 2009. Until the second half of 2010, however, it continued at a level of 1 bit coin (BTC) = 0.5 dollars (about 40 yen at that rate), but for the first time 1 BTC = 1 dollar (about 82 yen) in February 2011, It reaches the first criterion of. In March 2011, which will be one month after that, Mr. McCrev is a Frenchman living in MtGox in JapanMarc · CalpressI will sell it to Mr.. From then on, in February 2014 until the de facto bankruptcy Mr. Calpress's management system of MtGox has been adopted.


◆ Various troubles
In June 2011, three months after the management team changed, MtGox suffered from hacking, causing the trouble of 60,000 user names and passwords being leaked. At this time, the hacker batted a large amount of selling orders by hijacking MtGox 's account auditor' s account and plunged the company 's market price from 17.51 ​​dollars (about 1400 yen) to just $ 0.01 (1 cents / 1 yen) , It is said that you gained a big profit later when the price returns to normal.

In addition, because many users used the same password as the leaked one at other exchanges, it also led to the case of further expanding to theft damage. Anxious users will ask MtGox for refunds and remittances to other services, but delay in response will occur frequently here. Because of this, as users continuing to question the financial situation of MtGox, Mr. Calpress is conducting performance to appeal the stability of the foundation by conducting transactions of 420,000 BTC between its accounts.


Although Mt Gox which continued to operate as usual though the delay of payment was also found for a while afterwards, it makes the server inoperable in April 2013DoS attackYou will fall into a situation where the service will go down as a result. MtGox took action to temporarily stop the service from April 11th to the mid-12th due to the flood of selling orders and remittance requests from some users who panicked.


However, at the time MtGox, which is said to have boasted a 70% share of worldwide bit coin transactions, it may be somewhat unlikely that there will be some delays in response and delays in order delay Hmm. Among the graphs below, it is the line that shows the transaction volume of MtGox, which shows a high value bypassing.


Although it is MtGox which still boasted the largest transaction volume after trouble, in May 2013United States Department of Homeland SecurityMtGox used as a settlement financial institutionDuoraA situation arises that seizes an account that the company has. This is because MtGox has signed an allianceCoinLab(Coin laboratory), and the seizure size is 2.9 million dollars (about 290 million yen). Together with this $ 2.1 million seized separately, a total of 5 million dollars (about 500 million yen) of funds have been seized.

In June 2013, MtGox temporarily suspended the withdrawal of the dollar. Although it restarted later, many people continued to show a stagnation of payment of dollars after this, and many users were not able to cash their bit coins. By this time MtGox was not able to control the actual state of the bit coin which it should have possessed and was not able to grasp how much cash and bit coins are left in his account It is thought that.

◆ Cause of corporate constitution
Although MtGox was in a fatal situation that management of assets held by its company could not be done, the cause was the client software of the platform to manage assets. Client software should always be upgraded to take measures to avoid risks such as bugs and hacking, but MtGox neglected to fix it and continued trading with bugs remaining.

In the bit coin, there is a mechanism called "block chain" that records the transaction digitally. All transaction information on bit coins exchanged in P2P is recorded in the block chain and it is a mechanism to make it possible to verify the consistency of transactions in the past. Also, all transactions are to be assigned a unique "transaction ID".

In addition, digital signature by SSL is used for transactions of bit coins, but there was a big pitfall here. As shown in the example below, when a transaction is made, a digital signature (Degital Signature) is attached to the hash. It is a digital signature that was supposed to be originally "12345678", but alter it and add four zeros before "000012345678". Then, despite the fact that only one transaction exists, the client software that MtGox used remains the bug where processing is being done to issue an ID as another new deal as a falsified transaction It was.


The above figure is a conceptual diagram which greatly simplifies actual transactions, but shows the transaction of 2 BTC transferred from User A to User B. The transaction remitted from A to B is indicated by "Transaction one", and the transaction has a transaction ID "0x416e64657273". Next, when the user B on the receiving side operates the digital signature, a transaction ID "0xbad0cffee01" is newly added by the mechanism of the bit coin.

In such a situation, the transaction ID on the side that sent the money does not match the transaction ID on the receiving side, so the remittance processing itself will be considered unsuccessful and failed. Therefore, User B sends a request to MtGox "Because the transaction has failed, I want you to process again." In fact, there were cases in which the trade was truly failing, so MtGox will actually re-execute the successful remittance process. It is exactly equivalent to fraudMatch pumpAlthough it is possible to call it, by misusing this, we repeatedly repeat remittance processing which is not necessary many times, eventually leading to the situation that MtGox 's account becomes empty. This security hole was pointed out at the stage of 2011 and countermeasures were invited, but MtGox said that such unauthorized remittance processing was lackluster due to the abandonment.

◆ What is the future of bit coin
Initially, there seemed to be more problems in MtGox's operation system, such as processing such remittance, management system of bit coins, etc. Bitcoin FoundationCaused by insufficient management system by MtGoxI pointed out.

In addition, six bit coin-related companies such as BTC China · BitStamp, in order to avoid confusion caused by MtGox closing the site on February 25, "To the extent that MtGox's trust has been greatly impaired, It is a managerial problem by MtGox and it is completely unrelated to the value of the bit coin and the real value of the entire virtual currency "and in this case also the point that it does not affect the reliability of the bit coin itself I emphasize.

Joint Statement Regarding Mt. Gox | Blockchain Blog
https://blog.blockchain.com/2014/02/25/joint-statement/


Unlike traditional currencies, bit coins, which are virtual currencies on-line, are structured so that they do not have organizations such as governments to manage. As a result, the price is determined in the free market, and no specific individuals, companies, organizations control price or distribution. Also, due to its low cost structure and extremely high global nature, it can be said that it is a currency with high affinity for the Internet society. The mechanism and merit are also explained in detail on the site that explains Bitcoin which MtGox opened.

http://www.bitcoins.com/


It is a bit coin that tends to lead a bad image such as the current riot, but on the other handOpenBSD who was accepting donation will be saved by mystery $ 20,000 worth of bit coin donationIt is also worth noting that the incident is happening.

In addition, Mr. Jed McCreev who launched MtGox for the first time, along with a message saying "It is about to launch what it will do for you and bit coins"Has been launched. It is said that the site is currently looking for an alpha version of the service tester, but its details are not disclosed.

Secret Bitcoin Project - Come see.
http://alphatesters.secretbitcoinproject.com/


Illegal drug site "Silk Road"There are high affinity to the back society such as,Stolen damage occurs from unexpected placesOn the other hand,Universities that Bitcoin can use for paying tuition feesYaATM for Bitcoin "Robocoin" installedIt is also true that penetration into real society is progressing little by little, for example. Although it is the situation surrounding the bit coin where the condition of cobblestone is continuing now, I can not keep an eye on how future existence as a currency will be evaluated in the future.