Quote from: repentance on May 07, 2013, 12:13:56 AM

Ironically, I'm somewhat more intrigued by the Rackspace hack than I am by the Bitcoinica intrusion (hell, I even have questions about the Linode hack and whether other services were targeted solely to deflect attention). The database was ever so conveniently destroyed during the Rackspace hack and I'll always wonder what secrets it might have revealed.

I understand Tihan's position from a purely business perspective. I still believe that his trust in Zhou was a fatal error of judgement.

I made the following post way back then. I'm confident in my analysis - all hacks make sense viewed from the perspective of the person Zhou. While I unfortunately didn't link all the statements I refer to I believe the info exists in that thread, or at least linked from it. Bitcoinica simply never made any money - and that exaggerated boasting from a proud teenager spiralled out of control and was the direct cause of the later "hacks".

https://bitcointalk.org/index.php?topic=95795.msg1065233#msg1065233

Quote from: defxor on July 30, 2012, 02:40:33 PM

Quote from: zhoutong on July 30, 2012, 02:54:59 AM

This tells a lot about your attitude. I hope it is a hindsight and you didn't assume Bitcoinica to be a scammer's product when it was launched.

tl;dr: The road to hell is paved with good intentions.

I'm quite sure you launched Bitcoinica with the intention for it to provide value to the community. As initially suggested by Patrick/Intersango and others, your claims about trade volume were very suspicious. It's likely you simply exaggerated them, not unusual when being proud of what you've created.

Whether the Linode theft (where other accounts as well were swiped) just provided an excuse for some profit on the side or not I don't know, but I'm quite sure the only real money to have come out of running Bitcoinica were from user deposits. I have no personal opinion of whether it operated as a pure bucket shop or not, but others have documented the lack of visible MtGox movement even when Bitcoinica should've been hedging.

When, based on how you presented the success of Bitcoinica in public, you were approached with investment offers I believe you were simply unable to admit that it wasn't as successful as you claimed. I believe you went along way too far with whatever happened, and that the Rackspace "hack" was the simplest way out when Tihan started questioning the books. Additionally, it provided yet more profit which you might've needed to be able to keep up appearances with your friends and family.

After the very visible and complete failure by the Intersango people to handle the resulting mess I believe you made yet another profitable "hack" on the service. It wasn't as well planned nor executed as the previous, maybe it was simply opportunistic after having realized the release of the source code provided the excuse needed.

I've posted links to http://en.wikipedia.org/wiki/Pseudologia_fantastica and http://en.wikipedia.org/wiki/Cognitive_dissonance since I do believe they apply. I think you're currently unable to admit to yourself and people close to you where things went wrong, and you're still hoping to be able to exit this unscathed.

(I consider the above to be the simplest explanation possible that still fits all the known facts. I'm wary about the exact involvement by Amir, Patrick and Donald though - and since Tihan and Zhou supposedly have met in person it would be interesting to know exactly whom else have actually met either of them.*)

But then, the only reason I really care is that if people's only takeaway from having joined the Bitcoin community is that they get constantly scammed this will never fly. I thus believe Bitcoin fraud needs to be handled by the proper legal authorities. We're way past Mybitcoin's "as long as I give 49% back you guys won't hurt me, right?" - which btw looks suspiciously close to what you're currently trying to do as well.

*) Edit: Tihan's identity is verified by an upstanding member of the community, and thus Zhou's should be as well.

However, this doesn't change the fact that the Intersango crowd are utterly and completely incompetent.