Category Archives: Bitcoin

Insane coin posse

The latest in cryptocurrencies is the Juggalocoin, proposed to handle the transactional needs of the fans of the Insane Clown Posse. From Billboard (because after all this is an entertainment story):

Whoop whoop! A very tech-savvy Juggalo by the name of Papa Nutt has taken it upon himself to create a cryptocurrency specifically for Faygo-chugging devotees of “the Family” to buy goods and services with*, especially at the upcoming Gathering of the Juggalos.

Now, the acid test of any coin: can you buy Faygo with it? From Slate:

It seems quite possible this is all a good joke, but given the purchasing power of the Juggaloes, the Faygo company might want to update its payment system just to be safe.

On Bitcointalk, someone who calls themself “Juggalocoin” launches into a spirited defense of the currency:

To reach the huge non-crypto masses requires something they can identify with. Dogecoin did it. Kinda. In a weird, fleeting way. Doge is just a glimpse of what’s possible. But memes have a VERY limited lifespan. Doge may grow beyond the meme. I don’t know. But with Juggalos, it’s not about a meme. It’s about a community. A community that already exists, and has been around for over 20 years!

This is the innovation that JuggaloCoin offers: A coin that appeals to a very specific, very tight community. A community of over 1 million people. We are offering a real opportunity for crypto to dramatically increase its reach.

For more details than you’d ever want to see, visit

Previously on this blog, an account of Finn Brunton’s talk on cryptocurrencies.


April 3, 2014: Finn Brunton on Cryptocurrencies, North Quad Space 2435, 4:00 p.m.

This wide-ranging talk uses the current state of cryptocurrencies (most notably Bitcoin) and their underlying technologies to consider contemporary digital culture and its future. Professor Finn Brunton will discuss peer-to-peer networks, public key cryptography, proof-of-work systems, and the blockchain, illuminating their underlying social, political, and theoretical models and concepts. We will travel from sixth century Chang’an, seventeenth century Switzerland, and the vault of the New York Federal Reserve to IRC channels, software development communities, and closely guarded facilities in Iceland and Hong Kong to understand a system with fascinating implications for identity, ownership, authorship and trust online.

Good pre-meeting reading is Finn Brunton, More Problems More Money, Artforum, February 2014. (Free registration required.)

Cryptocurrency Digital

More Finn Brunton at

Notes from a 2013 talk by Finn Brunton on The Accidental Archive.

Notes from the talk follow here. I kept a running log with Twitter, and I’m writing this from my Pinboard bitcoin bookmarks; these links are to the bookmarks for ease of linking for the most park. I’m not trying to reconstruct the talk, just to give context for my bookmarks!

The talk started off with a discussion of the Audrey Hepburn film Charade, in which the mystery of what happened to the wealth of a family is only resolved when it’s realized that rather than searching for lost money that they should be trying to make sense of the tail of rare stamps. This was the kickoff to an extended and wide-ranging discussion of the various roles and purposes of money throughout history and how very odd things that don’t look like currency at all still functioned as stores of value, units of account, or mediums of exchange.

Bitcoin has peculiar mathematical properties that make it unusually suited for use as a store of value. Bitcoins are mined through a process that’s NP-hard, which means for practical purposes that it’s difficult to create them but easy to prove that they are real. Bitcoin is a “proof of work”; someone did something hard, consuming scarce computing power and copious amounts of energy, in order to accomplish a task that’s easy to confirm.

Finn talked about other coin systems (usually lumped under the term “altcoin”) that are based on Bitcoin but that are run separately and have their own twists. There’s Allahcoin, which donates a percentage of each transaction to the Muslim Brotherhood; Aphroditecoin, which is doing an “air drop” to give citizens of Cyprus their own money; Mazacoin, from the Oglala Lakota Nation; Freicoin, which depreciates through “demurrage” if you don’t spend it; and most notably Dogecoin, a joke of a currency that nevertheless raised enough money through the Dogesled fundraiser to help send the Jamaican bobsled team to the Olympics.

Dogecoin was noted as an exemplary virtual currency, in part because unlike Bitcoin it’s not worth very much and in part because the Dogecoin community is willing to spend it rather than hoard it. So people give Dogecoin tips readily – a few Dogecoin for posting a funny picture of a dog – and are generous in sharing.

Bitcoin is not even the first of the efforts to create alternative currencies on the internet. I worked at First Virtual Holdings in the 90s, which is one of the payment mechanisms discussed in a Jeff Mackie-Mason paper on digital payments. Not all of these enterprises ended up well, e.g the E-Gold system which saw its owner convicted of a conspiracy to engage in money laundering.

Finn talked about some of the crazy things you can do with Dogecoin, and described the first Dogecoin meetup in New York City where he noted that kombucha was for sale – payable only in Dogecoin. The conclusion I draw is that cryptocurrencies are equal parts community and technology, and that you get radically different social results when you keep the technology basically the same but change the initial conditions of community formation.

This over-simplifies and leaves out some really good and funny bits, but should give you some flavor for the talk.

Mt Gox in bankruptcy court – “We’ve been goxed!”

From Bloomberg News, March 11 2014

Mt. Gox Inc., the American affiliate of the bankrupt Bitcoin exchange that lost track of hundreds of millions of dollars’ worth of virtual currency, had its U.S. assets frozen by a federal judge in Chicago.

U.S. District Judge Gary Feinerman today issued a temporary order tying up money and property belonging to the affiliate, its ultimate corporate parent, Tibanne KK, and principal Mark Karpeles after a hearing today.

Tibanne KK? Here’s the web page for that site, as captured by the Internet Archive on March 9, 2014.

Tibanne Co. Ltd. is a Tokyo, Japan-based corporation founded in 2009 by Mark Karpeles, a young technopreneur with more than 15 years experience in software development, network administration and business development. Mark is well-versed in multiple programming languages, has a strong background in network security, and is well-known in the tech community.

Andy Greenberg on Forbes has a discussion of hackers who published what is claimed to be a database dump stolen from Mt Gox:

I couldn’t verify that Sunday’s database dump was real, or that it showed any of the “lying” that the hackers claimed. In fact, it may simply show how Mt. Gox’s accounting mismatched with its actual store of Bitcoins–that it was counting bitcoins as being safe in its coffers when they had already been stolen by thieves.

But as Bitcoin experts pore over the hacked files, they may yet offer clues to the mystery around Mt. Gox’s fate. The Bitcoin community has been puzzled by the apparent lack of movement of Mt. Gox’s bitcoins since the company declared bankruptcy last month. Despite stating that it lost 850,000 bitcoins in total in its bankruptcy filing, Bitcoin experts haven’t seen the movement of those coins in the Bitcoin blockchain, the public ledger of transactions that prevents fraud and forgery in the Bitcoin economy.

We’ve been goxed!

Related articles

Judge freezes all of MtGox’s US assets, lets class-action suit continue
MtGox Boss hit by angry hackers
Chicago court freezes US assets of Mt. Gox CEO, companies
Mt. Gox, Mark Karpeles Targeted In Alleged Bitcoin Hack
Mt. Gox files for Chapter 15 bankruptcy in the U.S.
Mt Gox is down in Bitcoin heist, “transaction malleability” to blame

Mt Gox is down in Bitcoin heist, “transaction malleability” to blame

The latest in the Bitcoin saga is a crisis at Mt Gox, one of the major Bitcoin exchanges in the world. A few judicious news clippings will give you a sense of the chaos.


From Reuters: Bitcoin exchange Mt. Gox goes dark in blow to virtual currency

The website of Mt. Gox suddenly went dark on Tuesday with no explanation, and the company’s Tokyo office was empty – the only activity was outside, where a handful of protesters said they had lost money investing in the virtual currency.

Hours later, Mt. Gox CEO Mark Karpeles told Reuters in an email: “We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can’t tell much more for now as this also involves other parties.” He did not elaborate on the details or give his location.

From the New York Times: Apparent Theft at Mt. Gox Shakes Bitcoin World

On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin’s existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft. A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation.

The document circulating widely is this crisis plan.

For several weeks MtGox customers have been affected by bitcoin withdrawal issues that compounded on themselves. Publicly, MtGox declared that “transaction malleability” caused the system to be subject to theft, and that something needed to be done by the core devs to fix it. Gox’s own workaround solution was criticized, and eventually a fix was provided by The truth, it turns out, is that the damage had already been done. At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet.

The underlying problem is “transaction malleability”, and how Mt Gox’s software didn’t account for it when approving trades. From Ed Felten’s Freedom to Tinker:

It has been known since roughly 2011 that signed transactions are slightly “malleable” in the sense that it is possible to modify a signed transaction in certain minor ways, without invalidating the signature. The critical details about payment—who is paying how much, and to whom—can’t be changed, but certain peripheral information can be modified in a way that causes the transaction ID to change. [Technical detail for crypto nerds: This happens because the transaction ID is computed by hashing a set of fields that is a superset of the fields covered by the signature.]

The mostly dormant crypto nerd in me rolls my eyes, but of course this was not an obvious problem to those first looking at Bitcoin. I don’t know off hand if other cryptocoins like Dogecoin have the same transaction malleability flaw.

Bitcoin volatility after Mt Gox downtime

Depending on the source you get a slightly different story, but the results are the same: there is a lot of volatility in Bitcoin pricing in early February 2014 because of problems at the Mt. Gox exchange. So much for a technologically pristine, mathematically pure, decentralized currency; when your “foreign exchange” depends on a very small number of businesses, it can have systematic vulnerabilities.


Coindesk, Why Mt. Gox, the World’s First Bitcoin Exchange, is Dying

Mt. Gox, the world’s original and once-largest bitcoin exchange, appears to be in a state of disarray after it suspended bitcoin withdrawals to work on what it said were technical issues. Meanwhile, the clamour of angry customer voices is growing.

The exchange’s moves have had a negative impact on the bitcoin markets. The price of 1 BTC plunged from $850 at the start of the week to $681, according to the CoinDesk Bitcoin Price Index, in the wake of the Gox announcement.

Business Insider quotes the Mt Gox letter to customers on the freeze in withdrawals:

We apologize for the sudden short notice. All bitcoin withdrawal requests will be on pause, and the withdrawals in the system will be returned to your MtGox wallet and can be reinitiated once the issue is resolved. The trading platform will perform as usual for the needs of our customers. 

Our team will resolve this problem as soon as possible and will provide an update on Monday, February 10, 2014 (JST).

The graph at top shows that Bitcoin on the Mt Gox exchange has lost more than 25% of its value, with data from Bitcoinity.

Much more discussion on Reddit’s /r/bitcoin.

Dogecoin suffers wallet heist. Such currency! Very profit!


Dogecoin is an alternative to Bitcoin, in the sense that it has the same structure as Bitcoin of being backed by cryptography and by conspicuous consumption of computing power and electricity. It’s distinguished from Bitcoin in that Dogecoin is also backed by a meme of a cute dog. Such currency! Very profit!

Everything is fun and games until the criminal element gets involved, in which case you can be pretty sure that your cryptocurrency has been validated. Case in point, a hack of Dogewallet caused several people’s stash of Dogecoins to vanish into the hands of an as of yet unknown person who managed to get to the file system of the Dogewallet “secure” system and change the destination address for Dogecoin transfers. About 30 million coins were stolen.

Details are on the the Dogecoin forum, and I found out about this via Clay Shirky.

Long story short, as we’re learning the hard way, never trust a web wallet with anything you’d be afraid to lose.

Bitcoin at new record highs, trading in China

The price of Bitcoin has soared in recent months, even though the Dread Pirate Roberts was taken offline. A recent graph shows the currency trading above $800.

Screen shot 2013-11-24 at 3.19.37 PM

What has changed that would drive the price from $140 to $800? The only simple answer (right or wrong) is China. The South China Morning Post reports –

A US Senate hearing put bitcoin firmly in the mainstream and triggered fresh support from countries that tend to fall in line with America’s financial regulatory regime.

In the past 30 days, the price of a single bitcoin has quadrupled, with Chinese speculators among the most enthusiastic buyers.

The question now is whether bitcoin can fulfill the goal it was conceived for: a fast, cheap online payment method.

From Want China Times

Bitcoin has become the world’s most heated investment target over the past week, appreciating by US$100 daily on average due to widespread speculation, the Shanghai-based China Business News reports.

On Tuesday, on China’s biggest bitcoin platform, BTC China, one bitcoin could be exchanged for more than 6,000 yuan (US$984.57), an intraday high, with the day’s average at 5,888 yuan (US$966.04), up sharply from 3,226 yuan (US$529.29) a day earlier. BTC China just recently surpassed Tokyo-based Mt.Gox to become the world’s largest bitcoin trading platform.

BTC China wisely warns

Important Bitcoin trading can be considered a high-risk activity, where Bitcoin prices are volatile, and can swing wildly, from day to day. Please use your extreme judgement when making the decision to invest in, or to sell, Bitcoins. BTC China is not soliciting for users to buy or sell Bitcoins, as an investment, or for profit. All Bitcoin trading decisions should be made independently by the user.