US Attorney Announces $3.36B Cryptocurrency Seizure in Connection with Silk Road
justice.gov
justice.gov
If you deal with money use PostgreSQL + SERIALIZABLE transaction isolation level to be sure.
More in PostgreSQL documentation https://www.postgresql.org/docs/current/transaction-iso.html
Also Zhong was 22 years old script kiddie when he hacked Silk Road. Any smart criminal would have left United States long time ago if you sit on the top of $3B stash.
Even executing queued operations with few seconds delay allow you to notice say a series of withdrawals putting account in negative
But then you have to create a queue that only runs 1 transaction per second. I guess another imperfect but simpler way is to create a batch file of transactions, execute hourly, but randomize or sort the sequence in a way to make sure related transactions aren’t executed together.
Please pick a database (relational or otherwise) with ACID transactions and replication, buy at least two different textbooks on that specific database, read both, do any exercises they suggest, and then decide whether you still want to build that system. If yes, then cool: don't hold me responsible if anything goes wrong, but you need to learn somehow.
Yes, it's possible to build systems like that on non-ACID-compliant databases, or without using the ACID functionality. It's much harder, though, and you really must understand what you're giving up in order to have a reasonable chance of success.
$balance = sql_query(“SELECT balance FROM accounts WHERE account_id = “ . $account_id);
if ($withdrawal_amount < $balance) {
withdraw_funds($account_id, $withdrawal_amount);
}
Realistically your DB of choice will probably try and tackle ACID half-heartedly because it's what devs expect, and that will lull you into the same false sense of security.
Many "eventually consistent" DBs will still have some concept that uses the word "transaction" that works like one until it doesn't (see DynamoDB and multi-region gotchas)
If you are new to the subject there are extensive reports available from Jepsten, one of the leading names in distributed system and ACID anomaly testing and research.
Which is not the default one.
> There is no isolation, your transaction will fail and be rolled back.
How so? Isn't it more likely you'll silently corrupt your data?
Even if it does fail noisily, this is a condition you're unlikely to hit in testing, so you'll probably be dealing with it in production.
https://dev.mysql.com/doc/refman/8.0/en/innodb-transaction-i... https://mariadb.com/kb/en/mariadb-transactions-and-isolation...
[0] https://ronaldbradford.com/blog/understanding-mysql-innodb-t...
I alerted the exchange operator and he let me keep the 10$.
Seems to me that REPEATABLE READ mode should be sufficient, but I'm not sure.
This feels way less like “pursing justice” and more like trying to track down everything the just I’ve department can seize and auction off. If Bitcoin hadn’t drastically increased in value since the original event, would this have ever been tracked down?
I cant even count the number of much more consumer-impacting crypto-related frauds, crimes, and hacks from the last 3 years that would be more deserving of justice department attention, rather than focusing resources and attention on a double withdrawal bug from an illegal marketplace from a decade ago.
Just kidding, haha. I agree that many more recent events have been more impactful, and hopefully they’re pursuing those too.
I mean the sheer numbers of ICOs with somewhat notable people involved purely to make a quick buck would be a good place to start
It kind of sucks for him that he had to forfeit the Bitcoin and not just the dollar amount he stole at the time. I am sure if it was the other way around, and Bitcoin went to $0, they would take the historical dollar amount he stole instead.
However, he isn’t being charged with a tax crime. He’s being charged with “wire fraud” for double withdrawing from Silk Road.
I am not going to make any statement regarding whether or not financial crimes against known and convicted criminal enterprises should be deprioritized in relation to crimes against regular citizens.
In this case though, the "victim" has not existed for over 9 years and will never exist in the future, there are no ongoing victism, and there are no downstream victims to return restitution to.
I do not believe the justice department should be pursuing cases (cold or not) where the only goal is siezing (not recovering) assets for their own benefit.
1. I suspect that the justice system feels that, as a matter of principle, they ought to keep the heat on darknet markets generally. That getting darknet market related arrests in the news has deterrent value, and shows they're doing their job. Obviously, arresting operators or big sellers would be even better - but any darknet market arrests are better than none at all.
2. They recovered $3.3 Billion, so the ROI on agents' time is probably pretty good. American society loves it when police departments are funded with criminals' money, through aggressive traffic ticketing and civil forfeiture! So this is really no different to fining a driver for doing 55 in a 54, except with much less police time used. From a certain perspective, this is one of the most productive uses of resources the department could possibly make.
2. People largely hate when cops find someone for doing 55 in a 54, so it’s probably not a great example, but I think supports my point. This isn’t about solving an actual crime, but about optimizing for how much money the justice department is able to collect. I said elsewhere that this would be more reasonable as a tax investigation, but it’s not, and it’s (in my opinion) a pretty bad precedent that investigations should be prioritized by “how much cash can we seize”
It was also a tax investigation, which is why IRS criminal investigatoes were involved, and there clearly were tax violations involved, they just weren’t part of the plea bargain.
> it’s (in my opinion) a pretty bad precedent that investigations should be prioritized by “how much cash can we seize”
I agree that prioritizing prosecutions that way would be, but Zhong doesn’t seem to have particularly been a prosecutorial priority. OTOH, spending investigative resources to find know forfeitable assets under an existing conviction seems a perfectly sane and responsible use of resources
:)
If you're not going to track down $3.36B after a decade, you really shouldn't pursue thefts of less than $1M ever.
Big withdraws suggests seller. Big deposits and withdraws without sales suggests launderer. Small deposits, or sales and big withdraws suggests insider.
Dude finally slipped up and got identified.
They found the kid in the process of looking for the missing forfeitable BTC from Silk Road. Which explains why the resources...
It's interesting how the defendant tried to hide his bitcoin holdings in very low-tech ways.
The utility ease of holding bitcoin is apparent with this seizure. What other asset could you hide the equivalent of $1B USD in a floor safe and a popcorn tin and without having to use a 3rd party custodian?
If another resident of Zhong's household had discarded the popcorn tin, he could have been out $1B. It's is difficult, but not impossible (see fat-finger transactions) to do that with other asset classes.
Impossible to prove he didn’t have his private keys backed up elsewhere.
Back in the day, the answer would have been bearer bonds, but they're no longer popular instruments.
The financial instrument of choice for movie heist villains from the 1970s to early 2000s.
https://en.wikipedia.org/wiki/Chiasso_financial_smuggling_ca...
> The total value of the counterfeit bonds was estimated at approximately one percent of total U.S. GDP in 2008
> The Financial Times also reported that the two suspects "had been released" by Italian authorities.
I guess they helped direct the police to the actual counterfeiters.
> An earlier billion-dollar bond case was recorded in 2002, when the United States Court of Appeals for the Seventh Circuit, located in Chicago, heard a case from two men who sought $100 billion from the Federal Reserve Bank of Chicago.
So two guys tried to bring a fake bearer bond worth $100B and tried to cash it out? That's hilarious. It also sounds like they didn't even get in trouble.
Some choice excerpts:
> ... Japanese nationals in their 50s ... who had attempted to enter Switzerland with a suitcase ... containing what ... appeared to be U.S. Treasury Bonds worth $134.5 billion.
Enough to buy a couple of Twitters!
> The Financial Times also reported that the two suspects "had been released" by Italian authorities.
??????????????????????
edit:
> On September 18, 2009, a similar incident was reported ... by the Italian financial military police ... involving two Philippines nationals smuggling purported U.S. Treasury bonds valued at approximately $180 billion
Why do these involve Asian nationals? I'm just not a good enough crook to determine the advantage here...
> On February 17, 2012, it was reported that Italian police had seized $6 trillion in counterfeit U.S. bonds....
If you're gonna commit a crime, you might as well swing for the fences, eh?
This is Dr. Evil type stuff!
Kansas City shuffle. You find someone who wants to help run the con, but they're actually the mark.
At least investment/corporate bonds usually expire, so the bearer ones eventually wash out.
(I understand these hardware wallets let you load up as many as you want.)
> U.S. Attorney Damian Williams said: “James Zhong committed wire fraud over a decade ago...."
The statute of limitations for mail fraud and wire fraud prosecutions is five years (18 U.S.C. § 3282), except for mail and wire fraud schemes that affect a financial institution, in which case the statute is ten years (18 U.S.C. § 3293).[1]
Lawyers please explain. Also, who was the victim here, and who reported the crime?
[1] https://www.justice.gov/archives/jm/criminal-resource-manual...
I’m not sure why you’re downplaying this. If I maliciously exploited a video game for serious financial gain today, there’s a good chance that will be a crime.
He pled guilty on Nov 4 2022, the wire fraud occurred in 2012.
It is not legally a “recognized currency” now (“virtual currencies” are essentially treated as non-currency properties), and it was both property and had value before 2014.
I don’t think it matters to the offense here, which only relies on it being property with value, though.
The only reference I can find to what you're describing seems to apply to civil suits only, where the legitimate defendent name is substituted back in during discovery. It does not appear to be a stand-in in criminal investigations.
The crime seems to have been discovered as part of the tracing of assets subject to seizure in the Ross Ulbricht cases, which is why the bukk of the assets were seized and filed for forfeiture as part of that case, and not the separate case against Zhong.
On the statute of limitations issue, its worth noting that limitations may be waived in a guilty plea, and that a defendant might do so to a lesser charge rather than facing trial on more or more serious charges (such as money laundering and/or tax fraud and/or evasion charges relating to the subsequent transactions involving the Bitcoin, which occurred at least as late as 2017, would be well within the 6-year SOL that would be applicable there.)
EDIT: To be clear, I haven’t seen a link to the Zhong plea bargain or any indictment it may have replaced (much less what prosecutors might have waived at his defense as potential charges that were never filed), so the above on the Statute of Limitations is observation of what is possible in general and how that might relate to the case, not an explanation necessarily of what did happen in the case. While there are other ways the statute of limitations might have applied differently in this case than it superficially would seem to (e.g., tolling for a request for.foreign evidence if some was used to ttace the funds) the way described above still seems most likely to me, in the absence of more facts.
It is true that the news would probably use the larger number if BTC had gone up in price since then, but I suspect that the official statement would always quote the value at the time of seizure (perhaps with a parenthetical to highlight a greater present-day value).
It should be marked to value at time of the crime. Value of the property is often a metric used for setting the charges/punishment and he had no idea it would appreciate the way it did. He shouldn't get penalized for it appreciating.
May differ internationally but to my knowledge it works that way over most of the US.
In the context of charges/punishment, when thr charges apply to specific direct proceeds, that would seem correct.
In the context of reporting a seizure, the value at the time of the seizure is relevant.
Those are two different things, even though they might relate to the same property at different points in time.
Weird that he went through all this trouble to physically hide the wallets but did not use encryption...
He most likely voluntarily gave them the passwords and access as he turned himself in as well as turned over additional bitcoin.
If you thought KYC constraints were invasive today...
And local and State government. https://www.nyc.gov/site/nypd/services/vehicles-property/pol...
USA is sovereign and does not respect international agreements.
If a criminal steals my bitcoin and spends it, everyone who accepts it and everyone who accepts it from them is taking delivery of stolen property, trivially traceable back to me. I'll want it back, because it is mine and was stolen.
https://en.wikipedia.org/wiki/Possession_of_stolen_goods
As a practical matter, if crypto continues to gain adoption, law must emerge to keep the ecosystem from getting jammed up.
Even the USA as the largest economic market in the world couldn't kill crypto by seizing assets as there are dozens of other countries that will keep using crypto for the anti-corruption, stability, and efficiency benefits it provides. It's a lot like the internet where a country can ban or control it but ultimately it only harms their own citizens and prevents them from properly competing on the world stage.
And presumably, this is how he was caught. He hid his identity really well. The withdrawal of BCH eventually led to his downfall.
The feds pinned him on what appears to a mixup by the accused between his “unclean” and “clean” wallet wallets when dealing with a crypto broker with an IP that pointed to his house for several years.
Starts around 22 here: https://www.justice.gov/usao-sdny/press-release/file/1549821...
An interesting way to put it.
It's my understanding that in Texas it may even be possible that killing thieves is legal there in some circumstances as well.
Edit: perhaps I wasn't as explicit in the part to read between the lines. The police in US are oft perceived as being more likely to 'overlook' or consider it 'mutual combat' for acts against criminals. I don't think the analysis "that has nothing to do with them being criminal" is really a fair conclusion.
[0] https://torontosun.com/news/world/no-charges-in-deadly-chica...
If past history is any guide, the proceeds will be auctioned, making DOJ the largest government-sponsored bitcoin dealer in the world.
Lotta crypto brokers look down on VPNs for obvious reasons.
But they seemed to have gotten their wallets mixed up and that gave away their identity on of one of the early 10k Bitcoin wallets.
That’s exactly my point ;)
If they overwhelm liquidity, the price can collapse because they can always underbid those trying to sell.
The US could also overwhelm [insert any free market] by simply executing eminent domain and/or printing enough money.
Again, that's not how the US govt works with these things anyway (OTC auctions), so it is all a moot point.
The last person who got that good of a deal was Tim Draper in 2014, which was a brilliant play and even then, I doubt he's sold it all.
https://www.cnbc.com/2021/12/19/what-the-us-government-does-...
We are talking about theoretically crashing the market, not an auction, and illiquidity won't protect it.
Is that like the ultimate tax loss write-off? ;-)
This was detailed in previous seize operations like this.
2013:
> The FBI official pointed me towards this Bitcoin address, which received transfers of close to 144,000 in just the last 24 hours. "They finished moving them at 3am this morning," said the official.
https://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-sa...
The quadrigacx (Canadian crypto exchange) bankruptcy trustee didn’t move the little they found into a wallet they controlled.
Lucky for them, it seems like nobody else had/acted on having the private keys.
How do you launder and benefit from even any of the coins, if you know you're a wanted man and everyone is watching to see where the coin pops up?
Anyone know what this refers to? Gold seized? or maybe metal plates with cold wallet keys taken from the safe?
> The metal items consisted of four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold-colored coin, all seized from Individual-1’s home on November 9, 2021.
So they weren't actual silver... So they were probably just novelty display pieces?
And even if they were real metals, the total dollar value of that lot isn't very high.
> The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ZHONG is scheduled to be sentenced by Judge Gardephe on February 22, 2023, at 3:00 p.m.
To be determined!
Whoever is responsible for selling a government asset is likely responsible for getting a good price. So a BTC dump, in addition to harming the markets, would be a violation of that duty.
https://www.fool.com/investing/2022/01/14/the-us-government-...
11, 116, 53, 44
It's very much still alive (which is probably why you're being downvoted), because it has first-mover advantage and is easier to use. I think eventually privacy-by-default coins like Monero (XMR) will gain in popularity assuming people smarten up, so if it requires people being smart, then it may never gain in popularity, who knows.
> ZHONG funded the Fraud Accounts with an initial deposit of between 200 and 2,000 Bitcoin. After the initial deposit, ZHONG then quickly executed a series of withdrawals. Through his scheme to defraud, ZHONG was able to withdraw many times more Bitcoin out of Silk Road than he had deposited in the first instance. As an example, on September 19, 2012, ZHONG deposited 500 Bitcoin into a Silk Road wallet. Less than five seconds after making the initial deposit, ZHONG executed five withdrawals of 500 Bitcoin in rapid succession — i.e., within the same second — resulting in a net gain of 2,000 Bitcoin. As another example, a different Fraud Account made a single deposit and over 50 Bitcoin withdrawals before the account ceased its activity.
So Silk Road wasn’t waiting for any transaction confirmations??? And didn’t append a nonce to each withdrawal to avoid duplicates?
Is this the guy that Ross wanted to kill?
One morning I put 20p in and it immediately came back out. It wasn’t accepting the coin so I tried two in quick succession. Both were spat back out… but the machine registered one of them.
I of course would never exploit that repeatedly for a couple free drinks and some extra change too.
The new machines use either a basket to hold the drink instead of a conveyor belt or some sort of shield to prevent you from messing with the flap door until it knows a drink has been vended.
Now, I don't know for sure, but I like to think two different reviewers got my packets in parallel and never knew it, and upon changing my status the second reviewer probably wouldn't have seen any evidence of the last status change having been from an appeal.
Back in the days before email was common, I applied for a postdoc position at <famous prof's lab @ MIT>.
I mailed my letter to <famous prof>, expressing interest in working in his lab.
A few days later, I asked 3 profs in my graduate program to write letters of recommendation on my behalf to be mailed to <famous prof>.
After ~10 days, I received a response letter from <famous prof>, to the effect of: "Sorry, my lab is full. Won't have any openings for several years. etc. etc. Thanks, but no thanks."
I figured "Oh well.... No big deal."
But I was too lazy to inform the profs who were writing my recommendations to stop.
About a week after my "rejection" letter, <famous prof> phones me and says, "I always send a standard rejection letter because I'm only interested in people who are _aggressive_. Thanks for sending your recommendation letters. I _definitely_ have openings in my lab."
I didn't have the heart to tell him that he only got those letters because of my laziness.
Back in the early 1990s, I withdrew $10 from an ATM.
But the machine gave me two $10s (they were stuck to each other).
I then went back for a second transaction (secretly hoping there were multiple "stuck $10s" waiting to be released).
The machine only dispensed a single $10 the second time, so I stopped.
Let it be known that I owe Chemical Bank (or whoever bought them) $10 + interest.
At the time, my girlfriend (now wife) used to tell me I wasted so much $$ on ATM fees by only withdrawing $10 at a shot.
I told her I was not good at budgeting my money and I had a tendency to spend whatever was in my pocket, irrespective of the amount.
So, $10 was my way of putting brakes on my spending. Fees were just part of the cost of my budgeting method.
She married me anyway.
Back when ATMs were new, you could get any amount, including change.
The ATMs at the Chase bank next door currently dispense any bills you want, but not change. After you tell it how much you want, it asks you how you would like it and you can tap different denominations.
Last month I took out $17, just to see it work.
He could withdraw whatever amount he wanted from the ATMs at college, but since that region's ATM network wasn't hooked up to his home bank's ATM network, it took months for everything to reconcile.
He could keep withdrawing, even if he had taken out far more cash than he had in his home bank account.
On breaks, he would go back home and pick up enough hours at his part-time job to cover the difference (it wasn't unusual for people to be paid weekly or in cash back then), make a deposit, and everything was fine. He just had to keep one step ahead of the computer batch processes.
Also, I think Chemical is Citibank now. I had a Chemical account, and a Dime account. I still think of Citi as "Chemical," though.
No. The guy he "wanted to kill" was a moderator who didn't even steal from him. A FBI agent (huray, my taxes) pretended to be a drug lord for over 2yrs convincing Ross he should kill some moderator with lies about he wanting to take over silkroad or something, and then staged a mock assassination. All that for no tangible investigative benefit other then strengthen their 2yr old bro-bond.
That agent didn't even contribute to the actual arrest. Go read wired write up of the whole thing. It's better than most fiction books. Pure comedy.
Also, the current silk road is a honeypot set up by the Feds. That's why 1) they screwed up on validating transactions (it's not their money) and 2) they want after the stolen funds.
You can provide a billion examples of how the US hasn't lived up to that notion, but 'liberty and justice for all' is, "what's on the tin."
Wouldn't the balance of the child's needs change the ethical judgement (now considered ethical as well as effective)? I don't see how they would be mutually exclusive.
Trivia aside, no. Entrapment is a specific concept narrower than "a fed lied to me."
Yes, no kidding it's a more complicated subject than that one short sentence. But my point was just that it's different from any notion of entrapment, or lack of, in the US.
The DOJ release says these transactions were from 2012
Ross Ulbricht commissioned 5 murders fully expecting each of them to be carried out.
> All that for no tangible investigative benefit other then strengthen their 2yr old bro-bond.
The murder-for-hire evidence denied him bail. But the prosecutor already had Ulbricht nailed and decided to avoid complicating the case by formally filing the murder-for-hire charges. Would your tax dollars have been better used if Mr. Ulbricht had additional life sentences and decades of prison? No, he is going to die in a prison cell either way.
Ross Ulbricht built his empire, in large part, by profiting off people's suffering. And he exhibited time and time again that he would murder people to protect it. He is nothing short of evil.
There are different levels of proof. For example, civil court only requires a preponderance of evidence.
Exactly. Justice does not exist at that level of wealth, and this is a core problem in western society.
Well pointed out.
Are there any societies, historical or current, where the extremely rich and powerful face justice in the way you would like, other than by pissing off other extremely rich and powerful people?
For example, in the 2008 Chinese milk scandal, two people were sentenced to death and three received life sentences.
So what? Which is it, are you in favor of a lighter sentence for Ulbricht, or a heavier sentence for the Sackler family?
I see this "comparison" form of objection quite a bit, where someone points out relative injustice without taking a stand on which way to go. Once you notice it, you start seeing it everywhere.
In terms of conversation, it almost always seems to have a muting effect, of freezing the momentum towards figuring out what should be done. Desiring consistency is honorable, but these sorts of scenarios further ask us which way we want to apply that consistency. While each individual case probably wouldn't make a difference, I think when we refuse to answer those questions as a society, it makes it more likely for these imbalances to occur. So I think it's worthwhile to try and think it through, take a stand, and voice a stand.
The US government really should have went the extra mile and stripped the Sackler family of every penny they had.. to the point that they were forced to beg for spare change on the side of the road e.g. Mortimer & Randolph Duke style.
> The bankruptcy judge acknowledged that the Sacklers had moved money to offshore accounts to protect it from claims, and he said he wished the settlement had been higher
https://www.nytimes.com/2021/09/01/health/purdue-sacklers-op...
He built Silk Road, which allowed people to sell drugs to one another.
If the 'people's suffering' you are referencing is the use of drugs, I hope you have this same ire for the pharmaceutical companies and physicians prescribing opioids linked to over 500k deaths in the US over the past two decades[1]. I hope you feel the same ire for the CIA who facilitated and supported the Nicaraguan Contra groups' smuggling of crack into the US to finance their coup attempt[2].
I would hope the "nothing short of evil" rhetoric isn't exclusively saved for the kid who built an onion site and then was entrapped by FBI agents into a murder-for-hire scheme of their creation.
[1]https://www.npr.org/2022/11/02/1133523740/cvs-health-agrees-... [2]https://nsarchive2.gwu.edu/NSAEBB/NSAEBB113/north06.pdf
> He built Silk Road, which allowed people to sell drugs to one another.
Actually, that's the tiniest part. [1]
The Silk Road was an online black market where buyers and sellers of illegal or
unethical items could transact anonymously. Utilizing privacy techniques such
as the Tor network and cryptocurrency transactions, people were able to
transact in drugs, hacked passwords, illegal data, and other contraband.
MANY OF THE ideological supporters of the Silk Road have described its
sprawling online black market for drugs as an experiment in victimless crime
and a nonviolent alternative to the bloody turf wars of the streets. But
prosecutors in the trial of Ross Ulbricht, the 30-year-old accused of running
that anonymous bazaar, have pointed to one conversation they say shows the
contrary: That the Silk Road's boss was willing to resort to the drug trade's
most violent measures when it suited his needs.
[2] https://www.wired.com/2015/02/read-transcript-silk-roads-bos...
LOL. Wow. You clearly have no sense for nuance whatsoever.
https://www.wired.com/2014/06/silk-road-study/
https://www.theatlantic.com/technology/archive/2013/10/did-s...
Silk Road reduced deaths in a black market that was always there and would always continue to be there regardless of the presence of Silk Road. Period. Given that black markets are going to continue to exist, since anti-drug laws are dumb (just like Prohibition was; regulation of an irrepressible market is always superior to "illegalization" in a vain attempt to suppress it), it is at least less bad if there are fewer killings.
Entrapment is unethical precisely because you can use it to enforce a law regardless of the ethical justification of the law. If it was a capital offense to have sex before marriage in 2040 in the United Christian Dictatorship of America, and another Ross Ulbricht type came along and made it possible for teens to seek and meet in secret online, and a christo-fascist cop pretended to be a hot girl on said system while pretending to threaten to take the whole thing down unless a ransom was paid, and ANOTHER christo-fascist cop (or the same one pretending to be someone else) offered a "solution" to this by "getting rid of" the "problem"... Do you see where I'm going with this? Future Ross Ulbricht just wanted people to be able to find physical love before committing to wed!! Certainly not guilty enough to do life in prison, because no actual murders ever actually occurred.
https://web.archive.org/web/20220112152207/https://www.wired...
"oh wait we fucked something up? shit no, give me my money back"
(Maybe you could have just hammered it continuously, but hopefully would have to predict when the blocks would be confirmed. They’re not exactly every 10 minutes).
It’s not exactly related to this hack, but poor blockchain practice on the part of silk road if it permitted withdraws this quick after deposits.
Not waiting for confirmations would leave you vulnerable to random chain forks and make 51% attacks cheaper.
Also common in professionally coded websites.
> So Silk Road wasn’t waiting for any transaction confirmations??? And didn’t append a nonce to each withdrawal to avoid duplicates?
See the ACID properties of databases. [1] These are often put to the wayside in order to have greater transaction speed. We can see the results.
In computer science, ACID (atomicity, consistency, isolation, durability) is a
set of properties of database transactions intended to guarantee data validity
despite errors, power failures, and other mishaps.[1] In the context of
databases, a sequence of database operations that satisfies the ACID properties
(which can be perceived as a single logical operation on the data) is called a
transaction. For example, a transfer of funds from one bank account to another,
even involving multiple changes such as debiting one account and crediting
another, is a single transaction.
But since this is "blockchain", is it more like... they weren't polling for the right confirmation/status/update from the blockchain network API thingie?
That's the exact same mistake I referenced. The consuming website should not be in charge of the atomicity of transactions.
It doesn't matter whether the API was used incorrectly, blockchain was used, or finanglesperunk was the technology. The vagaries of the implementation don't matter. Sending money should be atomic with the request instead of whatever this was, otherwise the result might be $3.36 Billion in theft.
PS Blockchain is a database. The developer can choose to enforce SALT instead of ACID, but something wasn't done right.
ACID makes sense in internal transfer, like the example you gave:
> debiting one account and crediting another, is a single transaction.
Blockchain is ACID compliant, their internal database could be ACID compliant hard part is linking it together.
The solution here is exactly going opposite of ACID. Do a transaction in database first, and hope the transaction goes through Bitcoin, if not have another job reverse the transaction. If the reverse job fails, have a support agent manually revert the transaction. A common mistake someone could do is to put transaction in processing state in the database, and have another job update it to success.
That's the issue, ACID is not ACID for a tiny bit but for the transaction. See the definition you quoted, "debiting one account and crediting another, is a single transaction." Blockchain is absolutely not ACID compliant. There must be a deterministic methodology not miner consensus for ACID. Miners can even change the blockchain.
However, why are you even mentioning blockchain instead of MYSQL without SERIALIZABLE, which enforces atomicity?
> The solution here is exactly going opposite of ACID.
What solution are you talking about? There was no solution put in place, which was the cause of the thefts.
They might want to look into this:
Many U.S. corporations use offshore tax havens and other accounting gimmicks to avoid paying as much as $90 billion a year in federal income taxes. A large loophole at the heart of U.S. tax law enables corporations to avoid paying taxes on foreign profits until they are brought home. Known as “deferral,” it provides a huge incentive to keep profits offshore as long as possible. Many corporations choose never to bring the profits home and never pay U.S. taxes on them.
https://americansfortaxfairness.org/tax-fairness-briefing-bo...
Yes, these tax loopholes are legal, but I bet the IRS and its world-class money trackers could, if they wanted, find quite a few outfits going well beyond what's technically legal.
Always reminds me on how Scientology managed to get charitable. tl;dr: Cause so much work for the IRS (or appear to be able to do so) and they'll back down.
The tax code is like the MasterLock of laws: looks complex on the outside, keeps honest people honest but is so weak it can be exploited by anyone willing to do so.
They were when the theft occurred, but this is like when you steal a cargo container full of crap, and five years later discover that both the Mona Lisa and a nuclear football is in it.