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Security Breach Forces Bitcoin Bank Inputs.io To Halt Operations
New submitter BitVulture writes "The hardcore Bitcoin community is abuzz with news of the closure of Inputs.io, a supposedly secure online Bitcoin wallet, after an attack resulted in the loss of 4100 Bitcoins. A PGP-signed message at the home page of the now mostly non-operational site briefly explains the situation: 'Two hacks totalling about 4100 BTC have left Inputs.io unable to pay all user balances. The attacker compromised the hosting account through compromising email accounts (some very old, and without phone numbers attached, so it was easy to reset). The attacker was able to bypass 2FA due to a flaw on the server host side.'
There's no word yet whether Inputs.io will eventually resume operations or whether the security breach will force the Bitcoin bank out of business."
This is for worst or better, online wallet that CONTAINS your private key can be hacked like inputs.io. That's why it's recommended to use wallet like blockchain.info where you hold the private key so they can't spent bitcoin for you. In some case where they must hold the key for you (exchange service for instance) most of their coin should be in cold storage / not allocate to direct individual. In another news, Bitcoin value is at all time high over $300.
I'm so glad that Bitcoin is such a simple solution to the complexity of cash!
I don't respond to AC's.
Pick any two.
It's computer fraud and abuse. It's not like they really robbed a bank.
which, amazingly enough, in mots of the west gets a lot more of jailtime for you even if you stole nothing of actual monetary tangible value....
though, again as usual, one needs to ask if they just took it themselves, their ex-employee took it or..
world was created 5 seconds before this post as it is.
We seem to be fast approaching the point where computer-based theft will be the way you "really rob a bank".
It's not like today's banks have all got huge safes full of bags with dollar signs on them -- not in the U.S., anyway. Money is becoming increasingly virtual. A dollar bill doesn't actually represent value; it represents debt, an IOU. A bank doesn't need to keep one physical dollar bill on hand for every dollar in its bank accounts; it only needs a fraction, because you don't expect 100% of your customers to come in on the same day to cash out. And thanks to the Federal Reserve system, there aren't even physical assets (like gold bars) of equal value to all the Federal Reserve notes in circulation. It's a bizarre system that only works as long as debt keeps circulating (buying and selling) and accumulating (loans with interest).
Koans and fables for the software engineer
Credit existed long before the Federal Reserve. J. P. Morgan used created money to help out banks in the Panic of 1907. The Bank of England created money to get its country out of panics in the 1800s. The private banking system evolved the system that the Fed later put in place on a more equitable basis (loaning to all banks instead of only to those that Morgan had a personal affinity for, for example). Elasticity was necessary for the banking system to function. The Fed just made that elasticity more under the public's control, so that it could be used for the General Welfare instead of for Morgan's private profits.
Hey, if there was a country behind it we'd call it currency despite being pretty much the same system, where someone says one blubber is worth x dollars and you can create some by ... well, by creating some.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
This is the thing about BitCoin I never understood. The proponents of BitCoin claim that it was untraceable, but all transactions are traceable by looking at who spent the coin and who owns it now, at least by their public key. This information is included in the data blob that IS the coin and lots of people have to observe the transaction before it becomes valid. You may not know who's key is who's, but you certainly can trace ownership of the BitCoin.
So, you may not know who owns a single coin, but though simple observation of transactions and a bit of foot work you can easily piece together who's who and who's spending their coins on what. It becomes a data mining operation with a bit of detective work to trace where folks are converting traditional currency into and out of BitCoin. Which is totally different than trading say dollars in currency. You *might* be able to trace currency transactions though things like DNA traces left on the bills or serial numbers (if you know them), but if somebody passes a briefcase of money around, there will be no way to trace each transaction that might have taken place.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Could have been an inside job. Collect $1.2 million in BTC from "depositors". Take all the money and run. Blame it on hackers. Profit. No one is going to investigate, there are no consequences, there is nothing to audit, and no way to seize back the funds even if some legal action were taken.
Dillinger lives. He drives a Tesla, and carries ultrabook instead of a machine gun.
---- Teach Peace. It's Cheaper Than War.
I've been analyzing bitcoin lately, and have come up with the following reasoning:
As the coins are limited to 21M coins, you can, at this date, purchase 1/21Mth part of all the coins in the world for $300,-
Even if you put the odds of bitcoin supplanting US dollar very slim (1:1000), the only rational choice is to buy bitcoin.
If in 2030 the world uses bitcoins, you end up owning a sizeable portion (1/21M) of the entire money supply of the world's default currency.
How is this not a good deal? Heck, even at 1:1000000 odds of bitcoin supplanting US dollar would still make sense at $300,- per coin.
Where is fault in my logic? It seems too easy.
Bram Stolk http://stolk.org/tlctc/
It's much more complex than any other payment system
That partly has to do with it being a decentralized cryptocurrency. Without central authorities or trusted servers, it takes quite a bit more to force everyone in the network to work together and agree on the state of the system. (And as digital currency systems can go, it is still pretty far from the most complex. Look up older partially anonymous Chaumian currencies.)
it's value as a currency is wildly unstable
Because it's not widely used yet. You can't peg the value of a decentralized currency to a centralized one. Its value works just by supply and demand, and as demand fluctuates wildly, so will its value.
it's prone to all sorts of technical and security problems
The article is about a specific vulnerable site that got hacked, not the bitcoin system or software itself.
Not that this is what's going on, of course, but this came to mind:
1. open bitcoin "bank"
2. get lots of deposits
3. "get hacked" and close up shop
There is no step four, the profit's in step three.