Daniel P. Barron

BitBet Owner Addresses Solvency Concerns

August 22, 2016

This article was submitted to and rejected by Qntra editor Aaron Rogier who explained that it is “more gossip than news.”

BingoBoingo: danielpbarron: Thing is more gossip than news. What happened? There may be a way to rewrite it into news, but it is still early this morning.
danielpbarron: BingoBoingo, what gossip?
BingoBoingo: The signed recollection by minimally connected guy.
Based on the way the guy interesctionalittitties with my WoT maybe your blog is the best place to make the point you want to make about it?i
danielpbarron: BingoBoingo, what is the point of qntra? is it soley to bring non-republic news ~in~ or can it also be to tell republic news to the outside?ii I think it is certainly news that the new owner of bitbet is taking the time to speak in public (this channel)
BingoBoingo: danielpbarron: Qntra pointedly tells republic news to the outside, BUT znort does not at this time have a relation to anyone I know such that his signature carries more weight than rando unsigned pastebinsiii
danielpbarron: $gettrust BingoBoingo znort987
deedbot: L1: 0, L2: 2 by 2 connections.iv
BingoBoingo: danielpbarron: There’s prolly a way to rewrite what you submitted to news it up,v but as you presented it it wasn’t news. Maybe a “look how unlucky this guy is” angle would help? All those misfortunes may very well involve malice on the part of persons other than him. Such an angle could be very newsy.
danielpbarron: unlucky for what? the hacked email?
BingoBoingo: What you submitted at this time however was not that. You presented the signed block as basically “take this as what it is” and “here are other people doubting it” leaving unrepublican b00bs to wonder wtf?
BingoBoingo: danielpbarron: The hacked email and the targeted use of it.vi
danielpbarron: BingoBoingo, I don’t understand your logic here. Even your criticism of znort’s reputation is addressed in my copy. But whatever I’ll just post it on my own blog

Here it is, unmodified, just as it was submitted:


The owner of BitBet (WOT:znort987) broke years of silence to address concerns about the solvency of its newly acquired betting website. They are enumerated and addressed in a signed statement that is notarized by deedbot, and quoted here in full. The person known as znort987, speaking on behalf of some vague team of managers, assures the reader that all bets are covered, and that the website is operating normally. This assurance only carries as much weight as is bestowed by fellow citizens, which isn’t very much.

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA512

During August 2016, the 3 following events occured, in no
particular order, but within a somewhat short time window:

    1) Bitfinex was hacked and funds were stolen

    2) Bitbet.us was somewhat late (by a couple of days) in paying out two resolved bets
       for completely unrelated reasons.

    3) znort987's email at znort987@yahoo.com was hacked by an unknown third party who
       managed to exploit a surprisingly blatant weakness in Yahoo's "security" features.

       The unknown third party used the newly gained control of this email to further
       perpetrate the following ill-advised acts:

            a) seized control of znort987@gmail.com
            b) seized control of znort987's github account
            c) tried to seize control of other accounts linked to these emails
            d) tried and failed to seize control of znort's empty BTC-e account (2FA got in the way)
            e) sent email to some of znort987's contacts to shamelessly beg for coins

This rather unfortunate co-occurence of events conspired to create concerns about BitBet's
financial integrity. Specifically, theories were formed and bandied about, speculating that
BitBet might have had funds stored on Bitfinex and would therefore not be able to meet their
fiscal obligations.

As a consequence of these unfortunate and co-incident events, I, Znort987, speaking
on behalf of the BitBet management team would like to make the following statements:

    1) BitBet's financial integrity is absolutely whole. As of Sun Aug 21 2016, we
       manage and are in exclusive control in excess of BTC 220 of customer's funds.

        - not a single satoshi of our customer's money has ever been lost.

        - all winnings have been dutifuly paid out (two bets were paid out
          with a delay of two days), and will be for the foreseeable future.

        - the keys that controll all of our customer's funds are stored on an
          encrypted cold wallet that is stored on a system that is never physically
          connected to the internet,

        - as tempting is it may look to pull the age-old scam run by most insurers,
          re-insurers and other MtGox-ish institutions of somehow re-investing the
          "float" (customer funds) to earn interest from it, we hereby guarantee
          that will will never do this.

        - there is however no guarantee that monies wagered will remain stored on
          the initial deposit bitcoin address for the duration of the contract.
          All deposit addresses are managed within the single cold wallet, and when
          a paiement is effected, the monies may be paid out of any deposit address.

        - we may change this in future to try and provide a permanent public proof
          of financial integrity, but doing this is not as easy as it sounds and
          will require some design:
            - building payout transactions becomes more complicated and requires specialized software.
            - having all addresses publically visible affects coin fungibility

        - with the exception of a tiny hotwallet with typically less than 3 BTC of
          BitBet's own capital in it, the BitBet management team never has and never
          will use third parties (online wallets, exchanges, "banks", etc ...) to
          store funds as they are essentially unsafe, as well as a negation of
          everything that makes Bitcoin interesting.

        - if, in the future, we need to use an exchange to convert some of BitBet's
          own capital to fiat (we never had to do this so far, nor do we anticipate
          the need to), we hereby pledge never to leave any funds, be they bitcoin
          or fiat on the exchange for more than the time strictly needed to complete
          the transaction.

        - incidentally, the 220 BTC of customer funds under management is an amount
          larger than twice the initial investment that was made to purchase BitBet,
          which should at the very least be an indication of the integrity of the
          BitBet management team.

    2) The email addresses znort987@yahoo.com, znort987@gmail.com are now compromised.

       Email coming from these addresses should be discarded unless duly GPG-signed
       with GPG key 9F1C2534ACEE115E18EF02A5FD5AA2A5E26602B0 (belonging to znort987)
       or with GPG key 7F209821086B427D2E963095ECD7837E31974995 (the official GPG
       key of the BitBet management team).

       The email address info@bitbet.us (being managed by us directly) remains on the
       other hand uncompromised. However, the statement above hold: should there be any
       doubt as to the authenticity of a statement made by BitBet, you should *demand*
       that the statement be signed by the BitBet management team key.

       In general, no important email is ever sent from these addresses or from
       BitBet without a proper GPG-signature, and we would advise folks who receive
       non-signed emails to either promptly discard them or to systematically ask
       for a GPG-signed confirmation.

-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1
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=BC6j
-----END PGP SIGNATURE-----
  1. Why do I bother signing this stuff? I have it ready to go on my own blog, I don’t need the money, and I’d rather publish my own content anyway. That and receiving S.QNTR shares has become a liability. Speaking of which, I never got a warning that my coinbr to Eulora transfers would incur the 0.02 BTC withdraw fee. Had I known this, I would have sent the money from my own address! This after having done many fee-free transfers, and even asking why the fee wasn’t applied. Not that I mind so much; coinbr has been a great service so far, and Juraj deserves compensation.
  2. In this case, that the new BitBet is starting to become civilized. Not that people should trust it to the same degree they trusted it in Mircea’s hands, but that it is indeed a couple clicks above non-republic social media derpery.
  3. Huh, kinda like that rando unsigned pastebin from the “DAO hacker” that Mircea published on his blog.
  4. For you “unrepublican b00bs,” “L2: 2 by 2 connections” means there is a relation to znort987 from BingoBoingo through two people that he knows. And for the record, those two people are myself and Mircea. Granted, the connection isn’t much, but it’s not nothing, and pointedly much more than a random pastebin.
  5. Add references to corn or something.
  6. Sure, email sent on behalf of X, regardless of whether X actually sent it, is still considered email from X. What differentiates BitBet from coinbase is that BitBet handled PR correctly (in #trilema) and coinbase handled it incorrectly (in a flaming pit) — for this, I give znort987 the benefit of the doubt, and encourage future channel appearances.

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