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Hacked Bitcoin Financial Site Had No Backups
An anonymous reader writes "A fortnight ago the Bitcoin financial website Bitcoinica was hacked and the hacker stole $87,000 worth of Bitcoins. At the time the owner promised that all users would have their Bitcoins and US dollars returned in full, but one of the site developers has just confirmed that they have no database backups and are having difficulty figuring out what everyone's account balance should actually be. A failure of epic proportions for a site holding such large amounts of money."
Cash doesn't need backups.
How are situations like this still happening?
HA!
This is what happens when you deal with an unregulated currency supply. Nevermind all those people trying to make a quick buck, or the ones who were hoping to achieve "legitimacy." Bitcoin has made //. several times now, almost always at its users' expense. I can only imagine the magnitude of ripoffs going on behind the scenes.
If you haven't come to this conclusion yourself by now, let me spell it out for you: If you don't need to buy drugs or guns, stay the fuck away from BC. The money to be made has aready been made. It's now just a facebook-like gamble.
EPIC FAIL from Bitonica
No kidding ... and backupica.com is available. Go figure.
A failure of epic proportions for a site holding such large amounts of money
Wait, what money? All they lost was just a bunch bitcoins. :D
For as long as idiots run commercial websites without backups, one can only hope they're found out...exploited and then relegated to an evolutionary dead-end. It's not as if offsite backups are particularly hard to figure out.
Everybody got zhou tonged, http://www.youtube.com/watch?v=kdvTkddp1F0 :D
Just check out the WayBack machine. Use the same security hole the hackers used, and just read off everyone's bank balance. Sorted!
I used to think that too. Soooo sick of Bitcoin articles. But now, every Bitcoin article is a new hilarious episode of idiocy, and it gives me my daily dose of schadenfreude, so I'm loving it.
I've actually been relatively open-minded about Bitcoin in general, but this really does make them look like they're trying to cut everyone off and make off with the money. I mean, the combination of risk and technical know-how here really ought to result in a certain standard of paranoia.
To prevent this day from getting worse, I'll just read ERROR as GOOD TH
Meanwhile, the EUR is imploding due to abject irresponsibility on the part of its government backers, banks, and investors, and the USD is probably not far behind. I wonder how long off until we see wheelbarrows full of euros and dollars being used to feed woodstoves rather than as currency. The growing sovereign debt crises and $700T (yes, that's a "T") derivatives market going tits-up are going to make BTC's problems look like a joke.
Yet I see comment after comment of how irresponsible and amateurish BTC is, and how we should only trust regulated, state-backed currencies. Yeah.
Liberty in your lifetime
$87k is two day's work for a CEO (or sports star) earning $10 million/year . Not really very much money, at least as far as the 1%-ers are concerned. And we all know they're the only ones who matter.
Do I really need a here?
https://app.box.com/WitthoftResume Code: https://github.com/cellocgw
This story about the woes of Bitcoinica is grossly overblown. The amount of money is comparatively very small, and the Bitcoin network itself is nothing to do with this theft and is sound.
To put some perspective on the Bitcoinica incidents, in 2008, the estimated UK bank fraud level was £52.5 million; that is 990.28441 times the amount of this Bitcoin theft:
http://www.themoneystop.co.uk/042009/online-banking-fraud-is-on-the-rise-in-the-uk.html
There are people on many sides who want Bitcoin to fail, and who will do anything to stop it from growing. The banks hate it, because it will disintermediate and replace their business. The Statists dont like it because it will defund their socialist dreams. The gold bugs loathe it because it is not gold. Keynesian journalists bristle at the fact that the money supply in Bitcoin is limited, and dream of seeing it destroyed.
None of these people will matter in the end, and they do not understand Bitcoin.
Bitcoin will continue to grow, and events like this will winnow out the weak services and strengthen the existing ones. Each theft, disaster and problem are iterations that add to the unpublished "how to run a safe Bitcoin service" manual. Bitcoin and the services that will grow up around it cannot be stopped, just like Bittorrent cannot be stopped, and the latter is responsible for 53.3% of upstream traffic:
http://torrentfreak.com/bittorrent-still-dominates-global-internet-traffic-101026/
It doesn't take much to see how important Bitcoin is going to become once the core public facing interfaces are solidified, refined and reliable. Bitcoinica is not Bitcoin, and neither are any of the services that are built on it. Bitcoin is a protocol. Events like this are nothing more than a bump in the road, and a vanishingly small one at that.
ATH0 Bitcoin: 1DnwFLXczVZV8kLJbMYoheUrpqHesjxrSi
Retrieval of that free backup costs a whopping $25.
Think about that statement for a minute...
If you want news from today, you have to come back tomorrow.
Blacks are a net drain on society.
And you, sir, are an unacceptable drain on the Earth's supply of breathable air.
87k is not that great a sum of money. If you think a "failure of epic proportions" in the business world involves five figures, you've got a lot to learn about business.
Obliteracy: Words with explosions
It isn't the amount, it's the sheer amateurishness of the operation and the subsequent loss of trust.
Banks, exchanges, and other monetary systems, including currencies themselves, can only function when there exists an implied trust that the system will continue to function, and do so reliably. A loss of that trust is what causes bank runs, hyperinflation, and economic collapses.
Bitcoin has destroyed that trust. They're toast.
Regards;
No he is useful.
He is so full of shit that his body will make a fine fertilizer.
Seriously, you are dealing with financials. How can you be so stupid? I guess that is what happens in a field where you throw away your most experienced people because they are too old and just don't "get it".
putting the 'B' in LGBTQ+
Backup is free. Retrieving said free backup is what costs you.
Which means... it's not free.
If you want news from today, you have to come back tomorrow.
My prediction?
The SEC will consider bitcoins as "unlicensed securities" and start prosecuting people for selling them.
You don't know the difference between backup and restore, do you?
"National Security is the chief cause of national insecurity." - Celine's First Law
Retrieval of that free backup costs a whopping $25.
Think about that statement for a minute...
Backup is free. Retrieving said free backup is what costs you.
Which means... it's not free.
For what it's worth, I knew exactly what you were trying to get that when you said "think about that statement for a minute" the first time.
But you *do* get the backup for free, it's the restoration you pay for. I'm aware that you probably think this sounds like disingenuous pedantry, but the evidence that the "free" backup isn't valueless is that... you try getting your data back from a faulty hard drive *without* a backup and you'll be damn lucky to get some (or any) of it back for $25!
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
Right. Because we regulate traditional banks, they're never hacked or robbed.
Oh wait...
They may want to reconsider their IPO.
The restoration fee is probably to discourage people from actually testing that restoration works. Backups are useless if you can't restore, so you must test regularly that you can restore everything you are backing up against scenarios like your server is stolen, the building burns down, or, in this case, if your VPS gets Pwned or feds on a raid seize every rack they see in your hosting center.
Government can affect productivity by making some economic activities unprofitable. There are many, many ways of doing this.
Seven puppies were harmed during the making of this post.
Your statement assumes the previous AC deserves rational argument in return. The problem is doing so gives too much importance to something that has actual negative intellectual value.
âoeTo argue with a man who has renounced the use and authority of reason is like administering medicine to the dead.â - Thomas Paine
--
BMO
I think the restoration fee is because they're a business and want to earn money. They get customers by offering the backup for free, so they have to charge for something else.
And testing your backups once a year for a whopping $25 is still helluva lot better than not having any backups at all for $0.
You don't really think that's a word, do you?
But the bank is covering the loss of $87 000, so government insurance wouldn't make any difference. The problem in this case is lacking security.
There's a bit of fuss in Australia at the moment because despite our unemployment, they are allowing foreign workers to be imported.
Oh, I know.
I groaned right after I hit submit and saw it mangled. I used to be one of those people that said "if you can't say it in 7 bit ascii, it isn't worth saying at all" but then even I got on the UTF bandwagon last century.
--
BMO
And what exactly is worth a backup you can't restore ? It's like saying "the entrance to this theater is completely free! You only have to pay to get out."
That only proves that over 50 percent of all murderers *that get caught* are black.
I wouldn't be the least bit surprised if racial bias caused more blacks than whites to actually get caught.
If I want to buy stocks, I go to some place like the NYSE which has a ton of regulation and checks and oversight in it. If I want to buy US dollars I can do it from a bank, which have a ton of regulation and oversight. If I want to purchase US bonds, well I do that from the US government itself.
Where can I buy bitcoins? Well some place run by a 17 year old kid in Singapore, some service run by a guy who calls himself "MagicalTux" and his company out of somewhere in Asia...
Hmmm, seems like maybe there is a bit of a problem with the credibility of bitcoin in terms of the credibility of the exchanges.
If these are the only kind of places that want to deal with bitcoins, well maybe ask yourself why. Also for regular people it doesn't really even matter why, it matters that it is. When you can deal with USD or Euros or JPY at a stable, regulated, monitored bank, but bitcoins with some kid in Singapore, well then where keep your money becomes much more simple.
Money is just a theoretical construct to facilitate trade, nothing more nothing less. It isn't anything real, even if the tokens used to represent it are real items. It is a theoretical store of value, something that everyone agrees to use. This leads to a couple properties of money:
1) Money is only useful, and thus only really money, if you can spend it. I can call whatever I want "money" I can even "back" it with whatever else I want. Doesn't matter, if it isn't something others will accept, it isn't money, it doesn't function as a currency. It has to be something you can spend, otherwise it doesn't make trade happen and thus isn't useful.
2) Money also is only useful if people DO spend it. Like I said, it is something to facilitate trade. So even if you have something that every person in the world agrees is valuable and they'd take as payment, say the Hope Diamond, if people don't actually spend it, use it to get something, then it isn't money. It only functions as money when people spend it to have others give them goods and services. If everyone just keeps it in a box and nobody spends it, then it isn't money.
So ya, if you can't spend Bitcoins on anything but illegal drugs from one site and maybe a couple online games that almost nobody plays it really isn't money. What's more, even with vendors like that you can tell it isn't money, just a payment system. People buy the bitcoins with actual money, pay, and the people they paid convert it back to USD or other currency. It is just a money laundering system, it isn't being used as currency and spent and respent, held and moved around.
Until it is something that people can use in a lot of places, until it is something that people will accept in many places it isn't a real currency.
Also this is why government currencies are so useful, is because they have a big amount of automatic acceptance. The government will accept them as payment for taxes, so right there is a big use for it. If I want to pay my takes, the US government wants US dollars for them. If you live in any developed nation, and most developing ones, paying your taxes is something you'll be doing. Also the government requires that they are accepted to settle any debts.
So if I owe someone for something in the US, they have to accept US dollars to settle it. They could agree on another kind of settlement, but accepting the government's currency is mandatory. My power company can't say "You used X amount of electricity last month so we want a goat from you to settle the debt, we'll take nothing else." They could offer to take a goat, instead of US dollars, if they wanted but they HAVE to take US dollars to settle the debt.
That, combined with the credibility of a currency backed by the government of the place where you live, makes it something people are quite interested in using. It makes it something they'll spend, and agree to receive, which makes it money.
Right now, bitcoins don't function as money hardly at all. People speculate on them, and some places use them to launder money (Silk Road doesn't hold on to bitcoins, they convert them back to currency immediately, they just use it to mask transactions). That isn't money, isn't a currency, in any real way. You get Amazon and Walmart to start taking them, you get them traded on the Forex market, you get it to where people will agree to be paid in bitcoins and not immediately convert them to something else, then you've got a currency.
While it is true that sovereign-backed fiat currencies are typically only as good as the government that backs them, other currency systems have their own problems.
What's the alternative to fiat currency then?
Barter? That works if you've got what I want.
IOUs? That works if I can accept deferred payment OR I can sell your IOU and trade it as if it was a currency.
Non-legal-tender bank notes, such as what America used off and on prior to 1862? Those are only as good as the bank that issues them.
Gold, oil, or some other commodity or a currency backed by the same, or a currency backed by a "basket" of commodities? Consider the fate of Aluminum, which was considered a precious metal in the mid-1800s.
Short of real-time barter (not barter exchanges, which are really a form of IOUs or similar non-currency medium of exchange), there is no perfect means of trade. Even real-time barter has its problems, which is why we have mediums of exchange to start with.
The bottom line:
Various forms of currency and non-currency intermediate forms of exchange such as formalized IOU arrangements all have their strengths and weaknesses. It's not fair to call fiat money "crazy" without first showing why some other medium of exchange, such as a hypothetical mid-19th-century Aluminum coin or Aluminum-backed currency, is always going to be better or at the very least, that it's so heads-and-shoulders-more-useful than a fiat currency that no sane electorate would allow their government to issue fiat currency.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
You may not be able to burn a bitcoin, but you can heat up your office mining them!
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Until the government decides to steal that money from you: "Freezing your assets" because they suspect you of some crime, "garnishing" or "levying" your bank account because you didn't "voluntarily" pay their taxes, and so on.
You forgot to include sending in the police with a rubber-stamp warrant to search your mattress for cash.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
As proposed, your system adds a level of complexity that's not really needed.
Current system:
Buyer with dollars pays $100+commission+spread for x GLD shares.
Seller wanting dollars takes $100 and gives up x GLD shares to buyer.
Buyer without dollars converts his currency into dollars then buys GLD, or buys a GLD-like investment using his own currency.
Seller wanting dollars takes $100 and gives up x GLD shares to buyer, then converts it into his own currency, or he probably bought a GLD-like investment on a market in the currency he does want and is now selling it.
Your proposed system unnecessarily puts everyone except those who don't mind holding bitcoins in the same boat as our investor who doesn't have or doesn't want US Dollars.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
If you fusion, fission, and extra-terrestrial (asteroids, etc.) sources, Gold and Silver are both finite by definition.
However, for the foreseeable future, the cost to mine these metals is not likely to skyrocket, ensuring a steady supply as long as demand remains near current levels.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Why bother is because bitcoin are more divisible than shares of stock, and have less transaction costs than buying and selling dollars or GLD shares on the market. The trader who maintains the GLD account balances for the users only has to trade the *net* amount of shares required by all the users put together, rather than each of them making a trade for small amounts. I'm not going to pay for coffee directly with my GLD shares because just the brokerage commission is about twice the price of the coffee, even if I was selling a fractional share (which you normally can't). But transfer rights to 70 millishares of GLD to the coffee shop is fine if the overhead is negligible.
There's a bit of fuss in Australia at the moment because despite our unemployment, they are allowing foreign workers to be imported.
That would be because unemployed Australians refuse to move to where the work is, whereas foreign workers are happy to.
Better to be despised for too anxious apprehensions, than ruined by too confident a security. --Edmund Burke
The easiest/efficient way to protest Govt hegemony is to print/circulate/use your own money exclusively among your friends/family/community.
And Bitcoin is the right direction.
Casteism
That only proves that over 50 percent of all murderers *that get caught* are black.
So now you're saying that they are not more homicidal, just more stupid? That's not very helpful either.
Ezekiel 23:20