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$500,000 Worth of Bitcoins Stolen
olsmeister writes "A Bitcoin user allegedly has had $500,000 worth of Bitcoins stolen from him. A hacker supposedly gained access to the user's home computer and managed to get the user's wallet.dat file, which contained the cryptographic keys that allowed him to drain the user's balance."
What type of MORON keeps a balance of $500,000 in BTC?
The victim's name was "allinvain"... Rather fitting, don't you think? Or maybe the story was made up.
Victim - "I've had the my wallet stolen officer" .DAT"
Officer - "Okay can you describe the wallet to me?"
Victim - "It was about 58KB and ended in
Officer - "Errrrr......so was it leather?"
Keep hyping that ponzi scheme.
Now you need to give the editors some credit here. If they were financially invested in pumping Bitcoins up, this article certainly would not help.
I mean people wouldn't imagine this is good publicity for Bitcoin, would they? Unless someone would go under the logic of, "Wow, people have so much of these things, I should get in on this game." I would like to think the reasoning here is. "Wow, digital property on a computer is so easy to steal."
Maybe I give people too much credit...
I'm a good cook. I'm a fantastic eater. - Steven Brust
Check the FAQ on the website. it's too long to explain here.
The short and dirty version is "If you asked a bunch of libertarians to design a digital currency, this is what you'd get". Which isn't a wholely bad idea of course, but obviously has some issues that need to be worked out.
Maybe I give people too much credit...
So long as that credit is not in Bitcoin, it's probably okay.
True. Sort of. The victim should know exactly what the recipient address of those ill gotten gains are.
Technically, if I understand the way that bitcoin confidence works, half the damn bitcoin network should know about the details of the transfer.
The problem of course is figuring out who the hell the address belongs to. That is the hard part.
As I understand the technology, each and every one of those bitcoins now contain their transaction history, so -in theory- they could be "flagged as stolen", IF there were a central authority that took care of that thing, but of course there isn't as that's the point of bitcoin, no central authority.
I honestly confused if bitcoin technology is for this though. Technically, this isn't all that different from the victim leaving his front door open, and a robber coming in to steal $500,000 worth of jewelry or the like. If your home gets broken in to, you can't blame the jewelry itself for being stolen, that's what thieves -do-, steal stuff. This thief just happened to break in to his computer instead of his house. So therefore you may not want to store $500,000 of bitcoin on your own home pc just like you probably don't want to store $500,000 of jewelry in your dresser drawer. Maybe you keep a few pieces at home, and keep the rest in your safety deposit box?
I know that bitcoin technology provides for cloud-based "banks" of a sort. If they have been implemented yet, I do not know.
Those coins are only worth what someone will pay for them -- maybe some products online you could buy with them.
Thank you, Captain Obvious. That's pretty much the definition of money.
A better analogy would be leaving the front door closed but unlocked (like having a firewall on your computer), but otherwise pretty much, yeah. You shouldn't have $500k worth of jewelry and $100 bills sitting in a known location in your house, and likewise it's pretty stupid to have $500k worth of BTC in an unencrypted, insecure wallet.dat file.
It's relatively easy to make a new wallet unknown to anybody, copy the first address made by this fresh wallet, send that address most of your coins, then encrypt your "savings" wallet and delete the unencrypted copy. Heck, put the encrypted "savings" wallet on some USB keys and a few CDs/DVDs and put them in a safety deposit box if you want to. You can continue sending payments to that address as much as you want.
The short and dirty version is "If you asked a bunch of libertarians to design a digital currency, this is what you'd get". Which isn't a wholely bad idea of course, but obviously has some issues that need to be worked out.
Much like most libertarians. /rimshot
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
It has to do with the US dollar being backed by the US GNP and Bitcoin being backed by the equivalent of pink elephants.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Nobody could be stupid enough to...
Any sentence beginning this way is automatically incorrect.
This thread was on Reddit 2 days ago. Here's the link: http://www.reddit.com/r/geek/comments/hzrcc/bitcoin_user_loses_25k_bitcoins_when_his_machine/
To summarise:
* it could've never been $500k, that's purely theoretical. In practise it would be worth far less.
* "allinvain" is a true idiot. He was keeping the coins on his main computer which had a virus on it. He was browsing the web and IRCing with it. He found the trojan the night before, had seen that his payout address was changed to another and then to fix this he "changed it back" and went to sleep. He then "moved [his wallet] to a Ubuntu linux vmware install. On the same machine."
* It's probably a hoax
Lots of people assume that various objects (including paper or virtual money) have value outside of what you can get in exchange.
"Seven Deadly Sins? I thought it was a to-do list!"
About $2 million is traded at mt gox every day. And it is always going up. You could get $500,000 in about a week without effecting prices much. No problem.
This would explain the laundering activity that has been going on the past 24 hours. The equivalent of the entire market of bitcoins has been transferred to hundreds of accounts in 50k+ increments. Only 6.5m BTC in existence, over 8m BTC in transfer activity. If any of that starts selling, it will collapse the market down to nickels and dimes.
When the foot seeks the place of the head, the line is crossed. Know your place. Keep your place. Be a shoe.
Bitcoin is used by drug addicts and drug dealers to buy narcotics.
So are dollars.
Now, you could have slipped in the word "exclusively", and you'd have had a point, but a point that was factually incorrect.
You could have slipped in the word "primarily", and you'd have had an uncorroborated claim to back up.
Even if it *is* primarily used for criminal purposes, Bitcoin is *fascinating*, and geeky. So it belongs here.
And nothing of value was lost.
It's not even for drug dealers! Drug dealers want MONEY for their drugs. This is only for the people at the top of the pyramid. You go somewhere trying to buy drugs with bitcoins and you're going to get stabbed.
I'd amend that to "If you asked a bunch of libertarians who wanted to put the world's economies back on the gold standard ...". Because really, when you think about it, that's what bitcoin is supposed to be - digital gold.
Consider the parallels to gold coinage: a finite worldwide supply, "mining" becomes more difficult as time goes by, and the amount of money in circulation can be reduced by coins being hidden or lost, but never artificially increased. Furthermore, the statements you'll hear from the BTC crowd are exactly like the statements from the gold money crowd - bitcoins will herald in a new era of economic prosperity, bitcoins cannot be manipulated by governments creating more of them, etc. In effect, you've got a community of speculators who are trying to make their own "gold", and get rich by doing it, provided they can make the rest of us buy into the idea. (The historical failure of gold-backed currency in modern economies seems to completely escape all of them.)
However, there is a very big difference between BTC and gold. While it is true that you cannot create more BTC, anyone (or any government) can certainly create a competing digital currency that has as much "value" as bitcoins. Who is to say that a bitcoin has more or less value than any other cryptographically-signed digital coinage? Nothing more than public opinion, and that can be manipulated.
Ultimately, I expect the BTC standard to fail, and when it does, you'll hear exactly the same claims of government / commercial manipulation / sabotage that you hear from believers in gold currency. In that respect, there will be no difference in BTC and gold at all.
While I didn't check timezones/hours on some timestamps, I think it's still fairly reasonable to call this bullshit. Please check your sources next time.