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Bitcoinica Breach Nets Hackers $87,000 In Bitcoins
dynamo52 sends this quote from Ars about a breach involving a Bitcoin exchange:
"More than $87,000 worth of the virtual currency known as Bitcoin was stolen after online bandits penetrated servers belonging to Bitcoinica, prompting its operators to temporarily shutter the trading platform to contain the damage. Friday's theft came after hackers accessed Bitcoinica's production servers and depleted its online wallet of 18,547 BTC, as individual Bitcoin units are called, company officials said in a blog post published on Friday. It said the heist affected only a small fraction of Bitcoinica's overall bitcoin deposits and that all withdrawal requests will be honored once the platform reopens."
Reader linhares points out a forum post discussing how the attacker(s) hinted at a 'mass leak' in the near future. This attack comes shortly after a leak of a different sort — an FBI document (PDF) about Bitcoin found it way onto the internet. It seems they're worried about the virtual currency's potential use in criminal activities.
From https://bitcointalk.org/index.php?PHPSESSID=a5fdf1db75465f52e9f1ebb06e67b70e&topic=81045.380:
"The root cause of this problem is an email server compromise. The email server belongs to one of our team members."
Really? Does their server really send (unencrypted) emails with root passwords to their entire system? Or did the email server just happend to have root access? I don't even know what possibility is worst.
Oh please, stop the whining. It's been months since I last saw a bitcoin story.
...That the concept of Bitcoins, nor the encryption behind it, nor anything like that is being breached.
It's always some kind of security breach that allows malicious folk to get the coins themselves. Or people that get their coins stolen from a leaky windhose box. Something like that.
So that is cudo`s for Bitcoin huh? I mean, I never heard some story like "hackers have found a way to create Bitcoins without all the hassle (and made it into a nice gui-ed program)" Enter the amount you wish, hit 'generate' and within 2 seconds your bitcoins are ready to be used.
It is a solid piece of work isn't it?
rm -rf --no-preserve-root /
Nature of the beast. To be fair though, one could ask the same of USD or Paypal or any other tech company's stock. You sort of have to assume that some of the techies you know own Bitcoin. I own some but I like to think that doesn't bias me any more than necessary as to the system's benefits and drawbacks.
Another Bitcoin story, another opportunity to learn about pyramid schemes and how they never work out for most people...
"It is completely incorrect to describe Bitcoin as a 'pyramid scheme.' Technically, it’s a 'pump-and-dump.'"
From: http://newstechnica.com/2011/06/18/bitcoin-to-revolutionise-the-economy/
In the world of Bitcoin, startups are held to a higher standard when it comes to transparency. How many $87k thefts do you think occur on a daily basis with other companies? How many of those do you think you would hear about if they did happen? Usually when we hear of technology it's always in the multi-millions either of dollars or of records compromised.
Ironically, Bitcoin serves as a pretty good argument that there should be substantial regulation of financial service providers since people that don't know computers keep losing hundreds of thousands of dollars.
Bitcoins are the tender of the future. The FUTURE. As far as FBI's worry about their use for criminal activity--too late! The things I've seen on an Onion router off the shoulder of Orion. Hell, people earn real goods and services for grinding in a game. Some of those goods and services may well be ILLEGAL. Maybe we should ban grinding to prevent this nefarious use of virtual technology? Some people collect bottles at the roadside for money. Some of this money buys meth and pot. Should be now ban.... and so on.
"The root cause of this problem is an email server compromise. The email server belongs to one of our team members."
A poorly secured email server is not the failure in this statement.
The failure is what was a non-essential piece of software, what sounds like someone's personal software, doing on this server or even on the same firewalled subnet?
"an FBI document (PDF) about Bitcoin found it way onto the internet. It seems they're worried about the virtual currency's potential use in criminal activities."
During the televised SOPA hearings with the House Judiciary Committee, Jared Polis - after introducing the song "The Internet is for Porn" into the Congressional Record - waxed poetic on the underground economy, Bitcoin, drugs, TOR and Silk Road.
Those watching on /g/ were aghast. "OH GOD HE KNOWS!" was the reaction.
Yes, folks, they've known for a while.
Bitcoin, when it's not a scam, is a method of money laundering.
--
BMO
If Bitcoin were a pump and dump don't you think it would have disappeared after the initial bubble? The fact that it continues to grow in transaction volume and in price stability doesn't count for anything?
I wonder how many Apple shares the mods own because they keep posting Apple stories. I wonder how many Microsoft shares the mods own because they keep posting Windows stories. I wonder how many Cisco shares the mods own because they keep posting networking stories. I wonder how many Red Hat shares the mods own because they keep posting Linux stories.
Etc etc. You're a retard.
https://en.bitcoin.it/wiki/Anonymity tl;dr Bitcoin transactions are not anonymous without substantial care in their execution. That being said it's unlikely the theif will be found unless they make a major slip-up.
Hey there, while you're on the topic of security, couldja not include your session ID in a URL you post? Makes you look sorta stupid. Try this instead, guys.
#fuckbeta #iamslashdot #dicemustdie
Bitcoin was an interesting experiment.
I was one of the lucky ones- I got in before Bitcoin hit prime time for its 15 minutes of fame. Back then mining actually got you something worthwhile when you could dedicate a couple of GPUs and one or two computers to it (back then FPGAs weren't even being discussed that much). It managed to pay for four separate computers, which I later overhauled and replaced the motherboards on so I could stuff three GPUs in each. A few months ago I decided to shut it down (after witnessing random things like the rollback of an entire market because someone sold too many BTCs and it pissed off the big guys who lost a lot of money because they didn't see it coming) and started to cash out. At the end of it all (after I sold my equipment- though that only accounted for ~10% of my total catch), I'd made enough to pay off my car and both me and my fiancee went on a nice trip to Maui for two weeks.
A friend recently "discovered" BTC and came to me for information on "how to get rich quick". It took me over two hours to convince him that it wasn't worth it anymore, that he could probably pump a good $10K into equipment and not even make back the money power would cost him to run it all. You'd have to invest ten times that into exotic FPGA hardware just to make any reasonable amount of income, and even then I doubt you'll ever pay for the hardware itself before the system completely crashes.
BTC is, ultimately, a failed experiment. Now that the system has gotten rolling there is little reason to use it for anything other then illegal goods, and nobody wants to be associated with a currency that is predominantly used to move dirty money or pay for black market items. I suppose things might be a bit better if we actually had reasonable exchanges running, but for the most part what is out there right now (including MtGox- which formerly stood for "Magic the Gathering Online eXchange") is just about as untrustworthy as the people using it.
If you're a potential miner, my advice is to stay away from BTC. If you weren't there when it started, then you're basically not going to make any money. Those few elites still making money off the system will soon leave as the entire thing becomes unprofitable for even them, and then when they cash out the entire system will crash hard- and any BTC you might own will be worth nothing.
-AC
So you think a victim down $87,000 worth of Internet Fun Bucks should be satisfied with some libertarian reply about the free market correcting itself?
https://www.paypal.com
If Bitcoin were a pump and dump don't you think it would have disappeared after the initial bubble?
Nope. I tracked a few stocks that I got spam about for a while. The scammers used the same things a few times. They pumped, dumped, sold, and then once the price collapsed they bought and repeated.
I am TheRaven on Soylent News
I'm not sure you could categorize bitcoin users as "people that don't know computers". Your argument could be used to shut down Vegas. Maybe Gambling Permits are in order?
--
damaged by dogma
I keep my valuable currency of Beanie Babies and Pez Dispensers under my mattress. And, boy, do I sleep terrible.
That's what economists are talking about when they mention "hard" and "soft" currencies. It is measured by how it feels when you stuff it under your mattress:
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
May I suggest you check out this graph?
Greylisting is to SMTP as NAT is to IPv4
I continue to operate my bitcoin business selling stickers, shirts, and things of interest to bitcoiners. Now it has been a year and it is still growing each month. I sell stuff for bitcoin and buy other things I need or simply cash out via local trade (for USD). I have about 1/3 the fees of PayPal and far less risk. This allows me to sell to people overseas much more safely and as it turns out about half my sales are overseas.
Bitcoin works for me.
When the Internet Fun Bucks are specifically made to be a libertarian free market ideal of untraceable cash, yes.
I think you'll find the insurance rates on anonymous Internet funny money to be rather high.
Here there's no progress bar. Just a single packet broadcasted across a p2p network and subsequently locked into the blockchain by the processing power of the entire network. If you're any kind of geek at all, you should appreciate the beauty of the system even if you think it's going to ruin your way of life.
And they're not designed to be untraceable.
http://lkml.org/lkml/2005/8/20/95
Both, actually.
Apparently Bitcoinica was hosted on a VPS, and the admin control panel used the email addy's of four (five?) principals.
A pretty amateurish setup, frankly - especially when you stop to think that Bitcoinica was responsible for the majority (i.e., over 50%) of volume on MtGox.
Bitcoin itself is sound (I own some), and of an unhackable nature by design. The bitcoin infrastructure however, is... ummm... "coming along".
Not just financial service providers either. Apparently the #1 seller on Silk Road, the anonymous drugs marketplace, recently did a runner with the Bitcoins he was paid over the 4/20 rush and didn't actually fulfill any of his orders. Turns out that anonymous reputation systems aren't sufficient to protect against scammers. Whoever would have guessed?
So why post anonymously? I never heard a better post for justifying a link to your shop.
Please consider this account deleted, I just can't be bothered with the spam anymore.
Geeze, did you even see the headline here on Slashdot? It explicitly refers to "$87,000 in Bitcoins", which pretty strongly suggests that there is a non-zero value to a bitcoin.
In any case, if you don't like the line I quoted, go bitch at the guy who wrote the NewsTechnica article, not me. Though I might try investing in a sense of humor first, so the joke doesn't go over your head again. :)
Uh, bitcoins have the (monetary) value that the buyers decide they have, not the sellers. So if people want to buy them, of course they have value, that's not a lie nor is it misleading.
In any case, if you don't like the line I quoted, go bitch at the guy who wrote the NewsTechnica article, not me. Though I might try investing in a sense of humor first, so the joke doesn't go over your head again. :)
Maybe I should, because I don't see where's a joke there. It seems exactly the same as the posts by bitcoin haters.
Dilbert RSS feed
A currency whose only recourse for victims of theft is to shut up and stop using it. Where do I sign up?
Just like cash.
An SQL query goes to a bar, walks up to a table and asks, "Mind if I join you?"
If that was true, why would they post negative stories like this one? You fail at logic.
They are only useful if you can spend them, and if people do spend them. Money is just a theoretical construct to facilitate trade, nothing more. It has no magical powers. As such it only works if people can spend it on things they want, and in fact do spend it. If they can't spend it, they have no reason to hold on to it or obtain it. If they don't spend it, then it isn't performing its purpose of facilitating trade.
This is why, all other issues aside (and there are a number of them) bitcoins fail as a currency. It has built in deflation which means that people would have an incentive to hoard, not to spend. That makes it fail as a currency. When there's an inherent deflationary setup in a currency, it will never function well.
Also you can see it doesn't actually function as a currency because to the extent people use it these days it is two main ways:
1) Mining/speculating. They just trade in and out of it to try and make money. While all currencies have trading and speculation it is not the major activity. With bitcoins, it is by far most of what happens. That means it isn't being used as money, but as a commodity.
2) To hide payments. People get bitcoins, pay someone they don't want to have it tracked to, and that person/company turns it right back in to an actual currency. That makes it no more a currency than Paypal. It is just a means of payment, and only being used to try and launder the money. At both ends the actual "money" is a regular currency.
Money isn't money because of some magic reason, or some special thing backing it or any of that. Money is money when people use it as such. When people are willing to accept it in trade for goods and services and willing to spend it on the same, you've got money. Doesn't matter what it is, just that you can spend it and you do in fact spend it. Gold coins, printed paper, bits in a computer, big rocks, all can work (and all have worked).
Yeah, but I think that's more about some of them being libertarians who just dream of a currency without eeeevil government rather than having explicit interest in it as a means of making money.
The "value" of gold is just as arbitrary.
No it isn't. Because at the end of the day, if the entire civilised world collapsed into a steaming pile of dog poo, women will still be attracted to a man with gold. And this is the primary force that drives the universe.
At that point I am sure they would be more attracted to the man with food.
- Raynet --> .
Because people selling "things of interest" anonymously on the net using an untraceable monetary system might have reason to avoid attention from the authorities?
Because the sentiment here on slashdot is so against bitcoin that I felt it would be viewed as spammy.
I use bitcoin for trades, I do not care if it is 50 cents, $5 or $50. I do not hold large bitcoin. But as you can see, others see a vested interest in 'pumping' the price and THAT is a downside to bitcoin. It is not a pump and dump, it is a working currency. The problem is that it is so thinly traded that people who want to pump and dump push it, as well as the true bitcoin fans who have no vested interest other then thinking bitcoin is a great project. It is hard to tell those people apart.
Bitcoin is truly revolutionary and does things that no other online currency has done.
Why is this insightful? You need to compare the amount of money lost to scammers to the cost of regulating and policing the market. Just looking at one side of the equation is pointless...
If you want regulation and chargebacks, use cc's and pay extra for it.