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BitFloor Joins List of Compromised BitCoin Exchanges
hypnosec writes "An attacker managed to access an unencrypted backup of wallet keys and steal 24,000 BTC (worth more than a quarter million USD), following which Bitcoin exchange Bitfloor has been shut down while the investigation of the theft is going on. The attack was carried out sometime last night. In a forum post, Shtylman pleads with Bitcoin users that BitFloor needs their help."
BitFloor Operator: Good morning sir welcome to BitFloor how can I help you today? ...
... this is all anonymous, right? ... ... I ... I've already received the "product" and they're GOING TO TAKE MY THUMBS if I don't get this money to them now.
Customer: Well, I had heard a lot about this new currency called BitCoin and I was hoping to transfer this $100 in my account to
BitFloor Operator: Oh I completely understand, sir, in today's economy one can't rely solely on the faulty fiat currencies backed by governments like the United States dollar AAAAAAND IT'S GONE! Please log out of this site sir, this is for customers with a positive balance in their accounts.
Customer: What?!
BitFloor Operator: It's gone, it's all gone, sir, our system's been compromised, you now have zero dollars in your account please log off or deposit more money, thank you!
Bitcoinica Operator: Good afternoon sir, welcome to Bitcoinica! How can I help you today?
Customer: Well, uh, I don't know how to, uh, say this but
Bitcoinica Operator: Oh completely sir, we don't have any logs or even backups for that matter!
Customer: Good, good, well, uh, you see I have this "sickness" and I need to transfer this $5,500 for this stuff from this silk road retailer and I
Bitcoinica Operator: Woah woah woah, that's more than enough information to get us started here. So let's see you now have $5,500 in BitCoin balance on your account and the wallet is being updated and written to our single hard drive on a Windows 98 computer connected to the internet with no firewall AAAAAAND IT'S GONE! Please leave this site sir, your account has no balance in it!
Customer: ??? Um, what?
Bitcoinica Operator: It's gone, it's all gone. All of it, something happened, we were hacked or that 8 year old spinning disk crashed or something but it's all gone, thank you sir, thank you for using Bitcoinica now please leave this site or put more money into your account.
Customer: But you don't understand
Bitcoinica Operator: That's wonderful sir, we here at Bitcoinica like to keep our transactions anonymous so please stop relaying me identifying details of this account. Now you have a nice day, sir!
My work here is dung.
post about bitcoin service being hacked ,
raspberry Pi's not being delivered
who where what when now?
I'm not really surprised by this. Someone had the idea to create a purely virtual currency, and someone else has found it to be an attractive target.
The fact that it is vulnerable to this kind of attack probably indicates there's some real flaws in how this currency is supposed to work -- or at least a few places where someone can get through the cracks.
I remember when I first started hearing about this, and thinking "gee, I hope they've thought through all of the security issues". It's like security in operating systems ... there's tons of things you could overlook which can let someone in, and until it starts happening, you likely haven't even thought of all of them.
I feel bad for anybody has lost their money on this, but I've been treating this like an experiment which has the potential to go really wrong. It's just so massively complex to try to design your own currency system that someone isn't going to try to exploit without going through a lot of growing pains.
Lost at C:>. Found at C.
Easy way to make money, set up a bitcoin exchange, run it long enough to get a couple 100 grand of bitcoins then steal them all from yourself, since bitcoin is untraceable there's really no way to get caught.
Buying drugs & stolen goods over the internet. Donating to Wikileaks. That's about it really..
Hello. Welcome to the 2010s. The "other online payment systems" are not just service providers anymore, they are also Boy Scouts, and a Neighborhood Watch. They take it upon themselves to determine who you can give money to, and to who you can not. Wikileaks is just one such example. There are also many outside of the US that are somehow considered to be in violation of US laws that of course don't apply to them.
Therefore we need the equivalent of cash.
This is not the fault of the currency. It is a fault of the exchange provider and the users of the currency really need to be careful in who they put their trust.
I'm sorry but noone without a great deal of development experience should be writing a Bitcoin exchange or any other type of financial exchange exposed to the internet. The attackers got hold of the unencrypted wallet? Why would an exchange wallet ever be unencrypted? Why is there a single wallet in the first place? Why not have seperate wallets per user account encrypted with their own passphrase such that the site operator doesn't even have access? Maybe a master password override to decrypt but never stored online etc.
Why is the wallet stored on the webserver in the first place? Why aren't funds transfered to offline storage on a regular basis? I could go on.
Why the fuck was your backup of keys stored umencrypred? It costs only a vew cpu cycles.
This smacks of an inside job, which given the nature of bitcoin, is far to easy.
Set up exchange, collect keys, lose keys in 'compromise', profit. No ???? Needed.
Silence is a state of mime.
Its not anonymous, but pseudonomous. Its actually the opposite of anonymous, as EVERY transaction is recorded in public.
It can't scale.
The major use beyond geek things is buying drugs (Silk Road etc). Heck, even illegal arms sales weren't profitable in BitCoin land!
The believers seem to have a huge amount of "goldbug variation", obsessing about a fixed currency supply.
Hardly any exchange or similar service has remained unhacked.
And 5% of ALL bitcoins ended up in a 6 month, blatenly obvious pyramid scheme run by an anonymous individual named PIRATE!!!!
The only saving grace is bitcoin is remarkably small: with only ~10M bitcoins in existence, the delusionary notional value is small.
Test your net with Netalyzr
I've been following this bitcoin phenom for awhile, wondering what it was all about and if it really could replace "normal" currency. All these recent thefts makes me say "no." At least with dollars the private central bank only steals your money ~5% per year (via supply inflation & dollar devaluation) rather than all at once. And also it's insured from losses (FDIC).
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
If it's not well regulated, open and the result of mutually beneficial agreement then expect someone smarter than you to take it from you: this rule applies to money, commerce and war.
Seems to me bitcoin is of mutual benefit - there are people who want to pay with bitcoins and people who want to be paid with bitcoins. That there are a lot of other people who'd like to rob us blind doesn't change that, any more than burglars and bank robbers and shoplifters do in the real world. It's just back to the days of the wild wild west when the sheriff was nowhere to be found and you have to protect your own assets.
Live today, because you never know what tomorrow brings
People in places that Americans frequently view as backward and primative have had this figured out for a long time
Obviously, there's lots of ways things could go wrong, but I'd give them my money before I'd put it in a bitcoin exchange...
If it's not well regulated, open and the result of mutually beneficial agreement then expect someone smarter than you to take it from you: this rule applies to money, commerce and war.
I thought the whole point of war was such that at least one party was going to conclude that the agreement was not to their benefit.
-
It filled the need for an anti-corporate moral superiority.
BitCoin was developed from the start to screw over large companies, who invariably require a trail of some kind for significant transactions. It's promoted as the digital equivalent of cash, and just like cash, the only way to trust a transaction is when you implicitly trust the other party. That kind of trust is only feasible for a small business dealing with a small client base, where the natural urge for social behavior still trumps the natural human urge for antisocial greed.
Sure, maybe BitCoin could eventually work... but it'll first evolve a traceable "BitCoin Certificate" that will be exchangeable for BitCoins at a particular place, and those certificates will have a booming economy grow around their trade, because they're easier to secure than actual BitCoins. Then certificates will be created for BitCoins that don't actually exist, but they'll be paired with certificates for BitCoin debt, and BitCoins will be loaned. Eventually, the BitCoins will just be a meaningless wallet locked away on a server, and the certificates will be the real money, and the demand for certificates will fluctuate in relation to the actual value of the BitCoins. Then someone will gripe about how these certificates are no longer fixed to the BitCoin standard, and they're traceable, and we should make a new currency to solve the problems, that's not controlled by Big BitCoin...
You do not have a moral or legal right to do absolutely anything you want.
It's better that the stupid bitcoin experiment dies now than when average people with something to lose are duped into the scam.
If it's not well regulated, open and the result of mutually beneficial agreement then expect someone smarter than you to take it from you: this rule applies to money, commerce and war.
By that argument, we should probably also ban hedge funds, ponzi schemes, derivatives trading, that entire 31 multi-level marketing thing, PayPal, Secured Debt Obligations, Beanie Babies, Exchange Traded Funds, house-flipping, Thomas Kinkade paintings, and investment in what China calls a stock market. Wait. What?
Excellent.
Yeah it's great as a means of exchange... for the people who are stealing bitcoins. The exchanges all seem to have a joke level of security.
Tell that to people in Zimbabwe where that newspaper and coffee will run you an entire wheelbarrow full of money. Or at least it did a year or so ago. The US media kind of lost interest in it a while ago, so I don't know what's going on now.
Unless you want war to continue, you must be prepared to enter into a mutually beneficial agreement of well-regulated, open terms.
And if you really want war to continue but just fancy catching your breath (or winning an election), make sure you leave out one of those ingredients.
And we moved on from that because a lot of people got robbed blind or shot, and few big endeavours were worth the risk so education and infrastructure was poor.
Maybe because when you are the victim of credit card fraud that you don't assume the liability and instead that is the card issuer's problem? Or if someone robs you of your cash that they will face criminal charges? On the other hand, the people losing virtual play money assume no liability and will face no prosecution.
A lot of my friends had similar experiences with their 401K plans.
401k Operator: Hello there welcome to your 401k how can I help you today? ... ... ... and ...
Customer: Well, I was calling about my Vanguard mutual funds that I had a diversified portfolio in but with the recent housing and financial crisis I
401k Operator: AAAAAAND IT'S GONE!
Customer: What? No, actually, I mean the worth is very low at this point -- not even a third of what it was before the crisis but I'm logged into your site right now and I still have the same number of stocks in this mutual fund.
401k Operator: There must be something wrong, sir, all of your money is supposed to be gone.
Customer: Well, I mean actually I was thinking about taking another $10,000 I have of liquid assets and investing in a post tax fund of these same stocks since they're so low right now.
401k Operator: Why on Earth would you do that? These are worthless and your money is all gone.
Customer: No, I mean, I haven't realized these losses yet, the number of shares is still the same and I'd like to buy more of them with some of my savings. I mean, if these things are truly worthless -- they represent huge cross sections of the biggest companies and industries in America. If these things are worthless, this $10,000 isn't going to be of any value to me anyway. Price anarchy will take hold and the economy will grind to a halt. The only people this is really bad for are those that are retiring between now and when/if the price rebounds.
401k Operator: Listen sir, if you're not going to let me say AAAAAAND IT'S GONE, I'm going to use your address here to find you and
Customer: Okay okay, jeez, um, oh, I just drank the last of my coffee and
401k Operator: *long sigh* It's not the same. I need to be alone now, goodbye.
My work here is dung.
They've long since re-denominated their money.
So they can use Silver dude. There's always a barter economy. In seriousness, wasn't this caused in some small part due to Robert Mugabe's land reform policies? Or is the hyperinflation it's own animal altogether. Or maybe the west is trying to 86 a socialist.
War will continue in any case you dreamer. The only thing that stops it is weapons so destructive that nobody wins. Even there it just stops total war, proxy wars get worse if anything.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Hawala works because it occurs inside a cultural and religious system that has strong penalties for not following thru. Bitcoin exchanges don't work because it's mainly run by a bunch of people who are completely against any oversight. They expect their word and their technical expertise to be the bond, without an ovarching cultural/religious framework to validate it.
Enron would have been very different if the perpetrators could have lost appendages for their malfeasance.
"My God...it's full of trolls!"
WTF?
Printing money is an aggressive act towards any nation that pinned its currency to yours. We cause inflation in China when we print dollars. This forces them to move the pin. This is how economic war is fought.
The pin is a simpleminded economic measure devised by engineers that run China. Their metric is industrial utilization. Their target is 100%. Their tool is the exchange rate. The downside is becoming more obvious every day.
It will be totally dysfunctional soon. Look for arbitrage opportunities.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Zimbabwe is using US dollars for all exchanges except those with the government. The people made this change.
I expect when you owe the government money you ether just don't pay or you convert your dollars to toilet paper and run from the bank to the government office before it loses too much value.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Why does everyone seem to assume that "regulation" or even "good regulation" means a damn thing? Is nobody looking at the rest of the worlds' economic situation? Now, I'll grant you that novice code monkeys shouldn't be building the equivalent of a bank - but seriously, the only real difference between this and a "real" bank is that it doesn't have Federal backing. Anonymity will go straight out the window as soon as they do (thereby eliminating one of the bigger benefits of BC), so what are you left with? The same fucking thing we're left with in the "real world": Trust someone with your money because nobody takes "cash" anymore and hope like hell that they don't fuck it up. If they do fuck up, then you hope that they'll be willing to make it "right". Dumping Bitcoin isn't the answer - resolving the problems with Bitcoin is.
Bitcoins != Bitcoin wallets. The breakage wasn't with bitcoin, but people deciding to store PRIVATE KEYS online. There's a big difference between a protocol being broken and people being stupid with private keys.
That was MY scoop! How will I claim mod points now to fight the Trolls?
The three laws of thermodynamics:(1) You can't win. (2) You can't break even. (3) You can't even quit.
I have heard from a source I cannot disclose that these attacks *might be* government sponsored.
The notion here is that if governments actively attempted to outlaw, ban or block the use of this alternative currency, people would backlash and buckle down even tighter. (You can see how well the "war on terror" and the "war on drugs" has been working out.) Making this currency illegal will only create more criminals.
Instead, it has been said that there is an extremely active initiative to discredit the risk and reliability of the currency.
Personally, I am not sure whether this will work or not, but the purpose and the methods seem reasonable.
With the normal banking system your account is insured to about $40k-80k depending on laws of the country you live in.
Untraceable currency is untraceable! Bitcoins are cash, but your wallet may be laying out on the street with notes hanging out, is it a surprise that some of them get stolen?
The difference is that most of the reasons that people have for accepting silver/gold certificates instead of actual gold/silver coins do not apply to Bitcoin. Bitcoin can be carried anywhere (and sent anywhere in the world) without a weight or volume problem. You don't have to physically travel to a Treasury office to redeem Bitcoin certificates for real Bitcoins. You don't have to worry about counterfeit Bitcoins as you might with gold/silver coins. With a moderate amount of encryption and backup you don't have to worry about them being stolen from your computer.
I took a look at the first and last pages (as I write this) of the link in the article called "BitFloor needs their help". Wow. What a delusional bunch of people. There are discussions of ways for suckers (cough cough), sorry, I mean "investors" to pump more money into BitFloor. On page 17 (last page now, but won't be for long) one guy proudly proclaims that he now has even more faith in Mt. Gox and BitFloor (assuming BitFloor ever comes back online) because since they've already been hacked, then surely they must have secured those problems and they are now apparently impervious to any future attack. It seems to me that BitCoin exchanges have security policies founded on the idea that people will simply leave them alone and not look for ways to steal what they have. That hasn't worked so far.
.. and then there will be this shift to "fiat" BitCoin Certificates that look very much like BitCoin Certificates, but can be created out of thin air by certain entities that wish to control the economy where only some decreasing fraction of them are backed by real BitCoin...
So someone explain to me how these BitCoin Certificates will somehow be different from current money?
Proper encryption and backup are hard (for the average uneducated schmuck), though, just like securing a briefcase with your life's savings in it. To avoid that hardship, people will dump their savings into the BitCoin banks, get the certificates, and so on. The reasons for wanting certificates change, but there are still ample reasons.
You do not have a moral or legal right to do absolutely anything you want.
*slow applause*
Well done, sir. Your reading comprehension is astounding.
You do not have a moral or legal right to do absolutely anything you want.
There are risks when you deal with non-trackable currencies. Theft and loss to destruction are two obvious ones.
Whether its gold stashed in a bank vault that gets broken into, bitcoins or something similar, or dollar bills in your wallet, you are vulnerable to theft. Gold isn't easily destroyed but paper currency is. So are files that only exist as bits on a typical storage medium.
Traceable, cancel-able mediums of exchange, such as travelers checks, credit or debit cards, bank-to-bank transactions, dollar bills that you know the serial numbers of, etc. are at least in theory cancel-able and replace-able if they haven't been used already. I say "in theory" because without an efficient means of checking to see if a piece of currency has been canceled, it's not cancel-able in practice.
Risk of theft without recourse is the price we pay for anonymity. For small transactions and for transactions that I don't want records of, it's worth the price.
For BitCoin to really take off, "bitcoin banks" will need to have auditable, accredited security measures and they will need to insure against loss from theft.
I don't know if BitCoin has a repudiation/cancellation mechanism, but if they do not, such a mechanism should be built into any future system. While cancellation won't necessarily allow a victim to recover his losses, it will deter theft because once stolen, money will be "hot" and have an unknown but likely very short shelf-life.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
BitCoin is frankly too small and too loony and too easy to trace!
The insane self-destructive tendencies of the BitCoin community ensure that governments don't need to do anything about BitCoin. Any "Currency" where 5%!!!! end up in a single Ponzi scheme, where +/- 200% swings in "value" are taken as, ehh, whatever, etc, is going to implode just fine on its own.
Heck, if I was the US Treasury I'd instead (quietly) buy out Magic the Gathering Online Exchange, so that they can trace the USD -\> BTC -\> USD flow in detail, since once things are in BitCoin land, the traceability is easy. Not because BTC will get big, but so they can quietly say "yeah, we have a handle on it" when some congresscritter gets a bee in his bonnet.
Test your net with Netalyzr
Who said that no-one wants war to continue?
The interesting thing is, that someone is actually willing to accept bitcoins (a virtual not value backed currency) and give in return real stuff. E.g: There is a $ value for bitcoins.
OK trade porn for bitcoins, but anything else makes me just shake my head...
A stolen briefcase can be broken into, a stolen encrypted Bitcoin wallet file with a secure password cannot. Additionally, Bitcoin is supposed to be introducing two-factor authentication soon, which would, for example, require keys from both a smartphone and a PC to decrypt a wallet and send Bitcoin payments. While it's possible and feasible to make and distribute a trojan that could infect a computer and both copy the wallet.dat file and log keystrokes to determine the wallet password, it would be incredibly harder to do so on both of a single person's computer and smartphone. Whether that is easy enough and safe enough for the masses remains to be seen.
Wait, that's not right. Most forms of payment today (credit cards, paypal, even ACH) are quite reversible. That means that if you are trying to sell something you have to trust the buyer not to take their money back. If you're a buyer it means you need less trust in the seller. However, this is a problem because typically sellers are well known and have developed a trusted brand, whereas buyers have not, so it's much easier for a buyer to judge the trustworthyness of a seller than the other way around. This fact is the foundation of an entire industry of risk analysis firms which simply aren't needed if you sell for cash. And it's not theoretical. My brother had a laptop stolen from him because he didn't understand how reversible PayPal is, and there are professional scammers who exploit that.
With Bitcoin, if you sell you don't need trust in the buyer. OK, so what about buyers? Well, if you trust the seller, you can just send them the money. For big, trusted brands that's nice and cheap - everyone wins. If you don't trust the seller then you can use escrow - except that as we've seen, big online wallets tend to become targets for hacking. The Bitcoin system anticipated this problem years ago and the protocol supports dispute mediation techniques that prevent the mediator from stealing the money, which obviously also means you don't have to worry about them being hacked either. It's not fully implemented today (no GUI), which is unfortunate, but these things will come with time.
Bitcoin enables a person, anywhere on Earth, to receive computer-based services from anyone anywhere on Earth, very quickly and with very little charged in transaction fees. Additionally you can send large amounts of money anywhere on Earth without incurring what banks charge for international wire transfer fees. I think it will also be good for micropayments - a website that wants to charge its visitors 15 cents doesn't have any good way of doing this presently without being destroyed by credit card fees.
Actually it's the merchants problem. If you ever tried to accept credit card payments for something you'd know that. And what makes you think cash thefts are resolved with a 100% prosecution rate?
Why does everyone seem to assume that "regulation" or even "good regulation" means a damn thing? Is nobody looking at the rest of the worlds' economic situation?
Yes, and that's why some people regret getting rid of the good regulation through the '90s.
Now, I'll grant you that novice code monkeys shouldn't be building the equivalent of a bank
Because otherwise things like in the TFA might happen.
the only real difference between this and a "real" bank is that it doesn't have Federal backing.
That and the fact that a bunch of kids don't hack into real banks every fortnight and steal the money.
And a token doesn't correspond to any individual's money.
Anonymity will go straight out the window as soon as they do (thereby eliminating one of the bigger benefits of BC),
Bitcoin isn't any more anonymous than a numbered bank account, love.
Trust someone with your money because nobody takes "cash" anymore
Buy more than iPhones. Lots of people take cash.
and hope like hell that they don't fuck it up. If they do fuck up, then you hope that they'll be willing to make it "right".
Sounds like you have chosen shitty banks/etc. Mine very rarely fuck up and right their mistakes quickly. Never lost a penny through individual bank error.
By the same flawed logic, a briefcase that's locked inside a welded-shut titanium room with constant surveillance cannot be stolen. A BitCoin wallet kept on an always-connected disk with a strong password that's the same password as used on an insecure social network which tells what bar the victim (and his smartphone) frequents, can be easily stolen.
The problem isn't that the cash mechanism itself is somehow flawed... Dollars don't magically leap to pickpockets' hands, and BitCoin wallets don't magically lose their encryption. The problem is that the security burden is put on the user. There are idiots who carry fat wallets in too-small pockets, and there are idiots who won't bother to encrypt their BitCoin wallets.
You do not have a moral or legal right to do absolutely anything you want.
just like cash, the only way to trust a transaction is when you implicitly trust the other party.
That is the problem with bitcoin right there, it is pushed by people who don't even understand the very basic aspects of the system they find so lacking.
The thing about cash, I don't need to trust the other party at all. The other party probably is not trustworthy. But I can trust the money they give me, because they know I can hold it up to the light and check for a watermark that they can't replicate, and I'll swipe a magic pen over it that disappears if the money is real, and marks it in a bright color if it is fake. Even a person I *know* I can't trust can engage in a cash transaction with me, and I can have full confidence that if I take normal, standard precautions my risk is very low. There is simply no reason at all to trust them. An untrustworthy person in the store is a bigger risk to fake-fall and make an insurance claim, raising my rates, than they are when it comes to the cash.
And as a buyer if I don't trust the other party, cash is perfect. My risk is related to any portion of the goods or services to be delivered after payment, which would be the risk and the same negotiation with bitcoin.
And if the cash itself loses value, so will bitcoin which requires not only working computers, but reachable exchanges. In the corporate dystopia where everybody adopts bitcoin, you've got a deflating currency so that as long as the corps don't spend money have a growing pot. And as more and more of the limited money supply aggregates with them, they can simply choose which exchange you have to use and now they have all the tracking and record keeping their accountants and actuaries love, and no pesky regulations to follow.
You constructed a scenario that you claim is an alternative. It isn't.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Most forms of payment today (credit cards, paypal, even ACH) are quite reversible.
First, note that PayPal is only slightly more secure than cash, and that's only because Paypal can choose to side with whomever it wants. It is not a bank, and not regulated like a bank. Apart from PR, PayPal doesn't really care what happens to any money you willingly put in its possession. A wise user will keep only money they can afford to lose in PayPal for convenience, and put the rest somewhere safer.
Bank transfers and credit cards are regulated, and the banks have a clear interest in not letting their customers lose money (since that's directly behind their profit). It's common knowledge that any fraud through a bank can be disputed, and the bank will usually be on the complainant's side through the process (because they want the profit from having that money back).
And it's not theoretical. My brother had a laptop stolen from him because he didn't understand how reversible PayPal is, and there are professional scammers who exploit that.
I have been scammed by sellers who charged for items and never sent anything, but my analogy proves nothing more than yours does.
With Bitcoin, if you sell you don't need trust in the buyer. OK, so what about buyers? Well, if you trust the seller, you can just send them the money. For big, trusted brands that's nice and cheap - everyone wins.
Except for the person whose BitCoins were stolen, and used to make the purchase. Since it's untraceable, those big businesses, who have to comply with those silly laws about not laundering money and the like, either can't use BitCoins, or they run the risk of being caught in a laundering (or other fraud) scheme.
The Bitcoin system anticipated this problem years ago and the protocol supports dispute mediation techniques that prevent the mediator from stealing the money [bitcoin.it], which obviously also means you don't have to worry about them being hacked either. It's not fully implemented today (no GUI), which is unfortunate, but these things will come with time.
And until that's used, fools and their money are soon parted. Once it is in widespread use, BitCoin is no better off than PayPal or any other reversible service, because a scammer can simply dispute every transaction, taking the chance that they'll get their money back. Then of course there's the case where a mediator may not actually be neutral, but rather is itself part of the scam.
So honest buyers get screwed when the seller doesn't uphold the deal, honest sellers get screwed when buyers don't uphold the deal, and companies who are big enough to be under constant regulatory watch are saddled with a huge risk. It's cash, with cryptography buzzwords added for flavor.
You do not have a moral or legal right to do absolutely anything you want.
Hawala works because it occurs inside a cultural and religious system that has strong penalties for not following thru.
That's why it works between the hawaladars, the people who exchange money. Traditionally, the people at both ends of the transaction were from the same family. The reason it works for their customers is that it's only a money transfer system. If you send a remittance to someone through hawaladars, and it doesn't show up quickly, you'll never use them again, and neither will your friends. Retail users don't keep balances inside the hawala systems. They don't try to act as banks. So, at least at the lower levels, there are no big stored reserves to embezzle.
The trouble with Bitcoin is that it's a transfer system, a storage medium, and a speculative investment. Most of the trouble comes from the last two features.
And what makes you think cash thefts are resolved with a 100% prosecution rate?
Actually, we think that bitcoin thefts are resolved with a 0% prosecution rate. Are we wrong?
"His name was James Damore."
It is your something and their nothing that is going to be exchanged.
Fugue for Aaron Swartz
Gold bug Austrians have been predicting hyper-inflation in the dollar for ages now. It is still a prediction that is ahead of its time.
Fugue for Aaron Swartz
Governments can shut down bit coin any time they really want to. The laws taxing private currencies are still on the books, and anything of value can be declared "income" at any time and taxed. Trade credits, for example, are taxable.
Fugue for Aaron Swartz
Do you want BitCoin to be an anonymous currency with no involvement from major governments, or do you want government law enforcement to regulate the loss and track down who stole the money?
If you make a currency that is a parallel to major government currencies, they will not help you secure it and develop it.
I believe in one of the Bitcoinica hacks they did in fact figure out who did it and recovered quite a large amount of the money. I don't know the details, I didn't follow that story much. I don't think it involved prosecution. But at any rate, you have switched the argument mid-discussion: the point I made is that you can't say "if somebody robs you of your cash they will face criminal charges". That's just false. I did not claim the prosecution rate for Bitcoin was higher than cash.
"Because bitcoin is a pure pump and dump scam."
I wonder why so many hackers are interested in it then?
" The faster it dies the better."
If it doesn't die, I would guess it will come out stronger
Again, much like Bitcoinica, there will be no police involvement or even a report filed. And again, like Bitcoinica, this will eventually be revealed as an inside job. I don't understand what the entire bitcoin community keeps falling for these obvious scams.
Never ever leave money in the account associated with paypal. As soon as the money is in your account you transfer it into another. That way if paypal decides to reverse the transaction they can fuck themselves.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
"Because bitcoin is a pure pump and dump scam."
I wonder why so many hackers are interested in it then?
Because hackers aren't nearly as smart as they think they are, and are in fact extremely susceptible to dangerous fads if wrapped in crypto-libertarian trappings?
Nah, couldn't be that.
You are not a brain: http://books.google.com/books?id=2oV61CeDx-YC
The way I think it is going to work - I'm not 100% sure - is that the Bitcoin network will not process transactions from two-factor addresses without having two ECDSA signatures from two separate keys. So there is no single point that a trojan could compromise to send payments.