On: 500k Bitcoins traded in 1h, Mt.Gox market hacked +...

[weavejester]

I'm surprised that people with large amounts of bitcoin don't have better security measures. For that amount of money, I'd consider securing the private key in a safety deposit box. Probably several safety deposit boxes, actually.

[tlrobinson → weavejester]

They apparently had 500k BTC in their MtGox account, which is insane. Unless they were actively trading all of that they should have withdrawn from MtGox to the BitCoin network.

[joeyh → tlrobinson]

If they were Satoshi, they could be sitting on enough early-adopter bitcoins that 500k is relatively not insane.

[saalweachter → tlrobinson]

I keep reading about people only being able to take a small number (50 or 80 BTC) out of the market at once, which is why the hacker couldn't do the same.

If that is true, then once you have your 500k BTC in the exchange, it will take you over a decade to get them out, either as cash or as bitcoins.

[sunchild → weavejester]

And therein lies the seed of the eternal cat-and-mouse game that is key management.

Technically, each layer of security you impose is also an impediment to the bitcoin market's liquidity.

[weavejester → sunchild]

Technically true, but no-one can sell off 500k bitcoins without the market crashing anyway, so from a practical perspective, no liquidity is lost.

[sunchild → weavejester]

Agreed. It seems the real fallout of this incident is the fact that the rollback can never recover BTC taken out of the exchange accounts and put into anonymous local "wallets". I wonder who will cover those losses?