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Hi everyone, I know very few people will see this and that's okay. I decided after a week of severe depression, anxiety, self-loathing, and general fucked up thoughts that I needed to talk about what I did. On the scope of a confession, it isn't much to some people, but to me it is a huge and daunting fuck up that I'll be paying out the nose for. The reality is I might even be homeless due to this. I used a throwaway for this because a few people I know have my primary acct and I can't bear the shame of them knowing yet. To get to it, I made a huge mistake and lost all my money. ALL OF IT. If it isn't obvious already, I don't have a lot of money. I am not a all that familiar with bitcoin and only recently began taking part in the community. /Bitcoin has been my bible and go to source nearly every day for the last 6 months. But again, I don't have much money and I decided that I have a this tremendously good feeling about where bitcoin is going so I warily invested in a couple coins around January 2nd at about 809 a coin from coinbase. I was terrified of losing what I put in. Then the next day, the price jumped about $30! I was ecstatic! I was amazed! I couldn't believe that my investment had begun working for me after only a day! It was a great feeling. At the same time of all this, I had just finsihed up a huge ordeal with Bank of America over fradulent charges on my debit card that sent my account into the negative and had intitially accured almost $1000 in overdraft and other fees. It took months to get all my money back and in the end still lost out on about $200 dollars. Needless to say, I was more wary of my bank than bitcoin at this point and bitcoin was GIVING me money instead of giving it away. So I did the only logical thing I could think of at the time and put the rest of my savings into BTC. And guess what? It went up again! I was so happy with my decision that I started reading more and more about BTC. Then the fluctuations in the BTC market started happening. I started to get nervous because the only cash I had was losing value and fast. I knew that it had a habit of fluctuating like that but I never had any money invested before. The anxiety was real for me every day I'd hop on /Bitcoin and see the news about mtgox ( then after that the silkroad 2 hack.) So, about a week ago when coinbase's price was plummeting still due to gox's problems and bad press and so on I started getting nervous. More nervous than I had been before. My "investment" had lost almost 200 a coin and I was sick to my stomach watching and waiting for the price to come back up like it "always" does. I was posting around a few forums and asking questions about what I should do? What could I do in the mean time? Should I pull out and take my losses? I got to talking to this guy on one of the forums who seemed to know what he was talking about. He mentioned the dice site satoshi bones and how he was in the same spot as me, made one bet and came out 10BTC richer. Even sent the tx ids. It was awesome to see and was even more awesome to imagine. He went as far as to send me .05 btc (holy shit!) and said "Make a few bets and watch, some of the odds are great." So I did that. I sent a few bets of .001btc and made nearly .5 btc in 5 minutes. I was hooked. I was going to make my money back. I was going to make a few bets and get out with what I put in, no more. So I proceeded to make bigger bets. I was making money. I was getting good at watching and "considering the odds." It wasn't really the case, I was just geting lucky here and there. I had no idea what the fuck I was doing. Then the transaction malleability thing happened. Or, rather, it was probably happening the whole time. I don't know. I don't know what it did to my MultiBit account, but it was sending my coins and not updating my balance. I was losing more than I knew because the double spends ended up looking like I had more in my overall account than I did. At one point, it appeared that I had TRIPLED my initial BTC investment over all and I was nearly crying with joy. Then I couldn't access my funds. It said I had a "Balance" of 30btc, but "Spendable" was .05. I knew that it took a little while for the transactions to get through the system and clear but minutes turned into hours and hours into days. When the whole story about the transaction malleability broke into full swing I started tracing my tx IDs back. I was a nervous wreck at that point. I had so many double spends and unconfirmed transactions that there was no way to actually find out how much I truly had left. When I looked through multibit's logs, it had mulitples of the "wins" that I knew I had but numerous tx Ids. I couldn't keep track of it all. Attempting to "reset" the blockchain on Multibit would only cause it to crash (probably because I had sent and received sooooo many unconfirmed transactions back and forth between that game.) I decided to grab my private keys and attempt to use Bitcoin-QT to sort it all out to no avail. It too said I had a balance around 30 BTC unconfirmed (a mind blowing amount of money for me!!!!!) I relaxed and decided I would just have to wait it out to get my money and I'd hold off on grocery shopping until the weekend (today.) Even if I had half of that after it all cleared up, I'd have made a HUGE profit. About two days ago everything calmed down and my balance began fluctuating like mad on both the Multibit client and Bitcoin-qt. It went UP at one point to 40 BTC even! Then transactions started to disappear. Mostly, the transactions that disappeared were the "wins." I assume this is because all of the unconfirmed txs or double spends started being pushed out of the system? I have no idea. I'll take a second to mention that I've never had an interest in gambling whatsoever. I've been to vegas, played a few slots, sat in for some poker and blackjack, would lose and just walk away. However, the last couple days I was consumed by the dice game. I thought I was making incredible money, hand over fist. Yesterday, my balance completely cleared up. I'm broke. I have nothing left. I pissed away even my winnings (maybe 3btc) I had before the transaction malleability started fucking things up. I cried for the first time in 10 years yesterday. Today, I cried again. Over the last week I fell into a depression and was overcome by this urge to just stop existing. Not really suicide at first, but, more of a "I want to close my eyes and let it all blow over." Then, when that didn't happen, I did start considering suicide. I have no money left. I don't know what the fuck I'm going to do for rent, for food, for gas, for my fucking books next quarter. I moved to california on my own about 3 years ago and have zero family in the area. I don't have family to lean on finacially whatsoever (I come from a seriously bad luck/misfortune/poor family.) Monday I'll be heading to my university to find out what I can do and if I qualify for any loans. Or something. I don't know. But right now, I need to tell people and persevere and try to make it out of this. But, my point of posting here isn't a pity party or to draw out "sorry for the bad luck" responses. I did this to myself and this pales in comparison to the bad luck others have had. I want people to use my sincere and obvious FUCK UP as a lesson. I got caught up thinking I was making money. I wasn't fully aware of what was happening during the transaction malleability shit and made decisions without fully comprehending the situation (and it is NOT the fault of Mulitbit or the dice game even if I wanted something to blame.) Most of all, I was GAMBLING my money away. It was greed and poor decisions. But mostly greed. So, I fucked up. I don't want YOU to fuck up like I did. Please look at the story and realize that it can happen to anyone without fully thinking through your decisions and having a grasp on the situation. And SERIOUSLY consider when you're putting too much money at stake when gambling. You could regret it and be in a shitty spot like myself. Thanks for reading. TL;DR Holy shit I wrote a novel. Sorry. In short, I inadvertently gambled away my only $7000 during the transaction malleability crisis and it is no one's fault but myself. I am now broke and terrified and I don't want YOU to suffer like I did. Do not gamble and do research before you do anything with your money especially if it is all you have. EDIT: Though my intial reason for posting was NOT to focus on why my balance said one thing and the actual balance was another, here is what the balance looks like on my Multibit client right now. However if you look at the blockchain, that's clearly not the case and hasn't been for days and days. These are the addresses I used off and on. Not all of them but those were the most active I think. 17cHzgxRLumqfu6UAddUrJmTujd7goHLrx 1BAKHq37qj1xekitr7adXapLqFrVtAhm8A 1KLug6D1mXoyS12BZipyQ8WHAdNzDmQxMp. Also, when I opened the Client today it seemed to send or revieve "stuck" transactions? I don't know what to tell you all beyond that.
Click here for a list of all of my Bitcoin Guides Ok, so here’s my quick guide on cold storage address generation. This is actually very simple and straightforward, but seems very complicated at the beginning because you first need to understand some basic concepts about information security. Just take your time, and only do this after you feel like you really understand it. You can even try it out with a small amount of bitcoins first just to get the hang of it. First I am going to write up the theory behind what we’re doing (this part), then I will simply write a step-by-step guide for how to generate a cold storage address, and put that up later. However it’s important that I explain why we’re doing each step first So before we get into my cold storage method; you need to understand some simple concepts first, which I’ll go into detail later:
We generate cold storage addresses OFFLINE, and with a RANDOM INPUT
Computers are not good at producing randomness
So point 1 is just explaining how we’re going to generate the cold storage address, which has two parts to it: getting an address generator that is not connected to the internet (just in case you have a virus that is watching what you’re doing and tries to send your bitcoin keys to it’s creator), and generating an address from a physical random input (such as rolling dice! More on this later). Point 2 is just what it says, and it needs to be drilled into people's skulls: software can not reliably give you a random number. The Offline Address Generator So first let’s get an offline address generator. Bitaddress.org is a publicly available address generator that has open source code and therefore has been checked and verified (as far as I can humanely tell). You need to open this website on a device that is 100% definitely safe (you could even wipe and re-install the operating system just for this), then turn off the internet on that device. The website will still function as normal but anything it generates will not communicate with the internet. Now, a lot of people advocate for creating a separate Linux boot disk, booting into linux, opening bitaddress.org and then generating your addresses on there, but to be honest I found this so difficult and time consuming that I ended up just taking my iPhone, opening bitaddress.org on it, disconnecting the internet and generating my cold storage addresses on there, and then wiping my internet history, cookies and caches when I was finished. This was the safest easiest way for me to do it and I felt like it was safe enough. So! now that we have an offline device, it’s time to generate a RANDOM INPUT. Science of the Random Input First, a quick primer on the science of randomness and information security! A bitcoin address is generated by taking an input, applying an algorithm to it, and producing an address. There are many ways of giving the algorithm an input, but the key thing to remember is that for it to be safe, it needs to be truly random. Now, the problem is this: computers are not good at randomness. You will see a lot of programs around on the internet for dice rolling, or random number generators, but every single one of them is at it’s very basic level, just a piece of code or an algorithm that produces a predictable outcome. This is bad, because any bitcoin thief that can predict your address’ input, can predict your address. To understand this, let’s do a simple experiment. For your input, let’s assume you wanted to use your birthday as an input. Since your birthday is the 1st of January 1991, you use the numbers 01011991 as your input and put that into bitaddress.org… poof! It spits out an address. This is great! You think to yourself; now I have a bitcoin address that is easy to remember! WRONG. Somewhere out there, someone has already thought to check these addresses, and can check every possible birthday in the above format in one afternoon! Even worse, they’ve probably already done this, and have a computer in their room that is permanently switched on, watching these addresses and waiting for someone to deposit some bitcoins into them so they can steal them. The problem was, your input was NOT RANDOM. It was a date, a predictable string of numbers that any hacker could easily reproduce and check; and this goes for any input that is not generated randomly: your mother’s maiden name, the lyrics to your favourite song… these are all inputs that thieves are already reproducing and watching. Try this out for yourself! Go to bitaddress.org, click on ‘brain wallet’ (i.e. an address generated from words or phrases) and use ‘Satoshi Nakamoto’ as the input. Now, take that address and go look at it on blockchain. People have already sent bitcoins here, some even with messages to Satoshi, and all of them have been ‘stolen’ because anyone in the world can use this address. Anyway, back to generating randomness: this is where the physical dice come in. When you roll a dice, in real life, in your own room with no-one watching, it becomes increasingly impossible to predict the string of numbers that will result from rolling the dice. If you think about it, anyone that can reliably predict the result of 10 dice rolls in a row is close to psychic, and places like Las Vegas would collapse overnight. In fact they’d probably make more money by just going to vegas and winning at gambling a lot! *A note on randomness: randomness is called ‘Entropy’ in science; and the more entropy something has the more random it is. The Diceware Method So, for our address’ input, we’re going to use the numbers from (real) dice rolling; the more the better. Let’s roll the dice and generate some numbers, just for shits and giggles:
That is a totally random string of numbers from 1-6, perfect! This would be a fine input to use for a cold storage address… however, it’s a little difficult to remember, and it’s kind of a pain in the ass to write down or type out. If I screw up just one of those numbers writing it down somewhere, I will lose every one of my coins, and I really don’t want that to happen. Hence, it’s probably better (and just as secure) to use diceware. Diceware is a list of 7776 words that are chosen by the result of 5 dice rolls. For instance, when I roll five dice and get a result of 16656, this gives me the word ‘claw’ When I enter my previous set of random numbers, I get the following randomly generated password:
argon zilch ababa katie orate feat mud snack bovine must yl corn parke maybe must sort billy bowen bald
It doesn’t make sense, but it’s much easier to write down or type into a computer without error. This is a great method to use; because it’s just as random as a bunch of dice roll numbers, and is still cryptographically secure, even if the attacker knows you’re using diceware! This is because for every single word you use in your sequence, the attacker has to use exponentially more computing power to try to crack it. In fact a diceware passphrase of 8 words or more would require the sum energy output of the entire world for one year to crack… and that’s assuming the thief even knew you were using diceware! The website itself recommends a passphrase of no less than 6 words. Hopefully that helped you understand the basics of cryptography and how we generate cold storage addresses. Now that we know what we are doing, the next thing I’ll write up is a straightforward step by step guide on how to actually generate and store these addresses so that we can retrieve them later.
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