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Bitcoin Thefts Surge, DDoS Hackers Take Millions
CowboyRobot writes "In November, Denmark-based Bitcoin Internet Payment System suffered a DDoS attack. Unfortunately for users of the company's free online wallets for storing bitcoins, the DDoS attack was merely a smokescreen for a digital heist that quickly drained numerous wallets, netting the attackers a reported 1,295 bitcoins — worth nearly $1 million — and leaving wallet users with little chance that they'd ever see their money again. Given the potential spoils from a successful online heist, related attacks are becoming more common. But not all bitcoin heists have been executed via hack attacks or malware. For example, a China-based bitcoin exchange called GBL launched in May. Almost 1,000 people used the service to deposit bitcoins worth about $4.1 million. But the exchange was revealed to be an elaborate scam after whoever launched the site shut it down on October 26 and absconded with the funds. The warnings are all the same: 'Don't trust any online wallet', 'Find alternative storage solutions as soon as possible', and 'You don't have to keep your Bitcoins online with someone else. You can store your Bitcoins yourself, encrypted and offline.'"
Pretty soon they'll all be stolen, kinda like land
“He’s not deformed, he’s just drunk!”
Somebody more familiar with bitcoin can answer this for me, undoubtedly, but based on my limited understanding, if the wallet file is lost or destroyed, the coins within it are effectively gone, correct? If so, then at some point there's an expected loss over time (fraction of the population who don't back up their wallet, expected size of wallet, drive failure rate), and at some point that's going to intersect with the size at which the pool expands, so that the total supply of bitcoins over time actually decreases. Theoretically, we'd hit some point where bitcoins are just being destroyed through loss. The situation will be exacerbated with thefts and personal storage.
ok. like how?
Ever wonder why banks can pay less than inflation for savings accounts and still get customers? Government insurance against the bank getting robbed / going broke / just absconding with the cash lets them provide a service that's worth a small cost.
In a way, Bitcoin is a bet that the risk of the government itself being the ones to take your money exceeds the risk that individuals will do so. History shows plenty of risk both ways, but I could certainly see the value in banks offering Eurobitcoin accounts.
Socialism: a lie told by totalitarians and believed by fools.
I'm in the wrong business :/
Are we seeing the Zenith of Bitcoin? Is it all downhill from here?
I'm not anti-Bitcoin philosophically, but I have worked in academic level IT & networking so I know what's going on...
The problem is exchanging Bitcoin for real currency...there is no accountability for the value exchange. Mt. Gox? Seriously? How do you even pronounce it? "mount Gox"? "M. T. Gox"? Who do you call if you have a problem? Bank Of America even has a brick and mortar location at least...
These aren't trivial issues.
In order for Bitcoin to work, people have to believe it is a trustworthy place to abstract and store economic value.
People have to **USE** Bitcoin or Bitcoin dies...until you can directly exchange Bitcoin to currency this will just be an elaborate hoax.
Thank you Dave Raggett
Yes, we all want Bitcoin to keep falling.
No, this being posted on Slashdot right now will probably not make people keep selling to lower the price. Sorry.
in the couch
I do. Encrypt and backup your wallet.dat file. When you restore it, even if it is old, you can rescan the block chain and have all your funds. Except for transfers, why hand your entire wallet to someone? Would you do that on the subway, or in walmart?
Silence is a state of mime.
Now since CNN and real Wall Street brokers are getting into the act I expect the value to go skyhigh! It went up 1000% in just 12 months.
Even if you think that is non sense Tulip bubble mania all over again you can't ignore the fact that this got some Wall Street investors attention. With supercomputers and high trading algorithms you can bet they will automate the process and prevent it from crashing. Remember if you have a super computer you can make money too by shorting the bitcoin.
You make free money the more volatile it is. This is much more profitable than the dow jones. At this point I doubt it will go away anytime soon.
http://saveie6.com/
... and use a VM just for that purpose. Since I do IT I have a copy of VMware workstation and will utilize this for just that purpose to play it safe.
I have one for porn and one I am going to make for litecoin trading as bitcoin is too expensive already :-(
Firefox and Chrome with flash can get you just as infected as IE under Windows in this day and age so any browser is bad. A VM is the only way to stay safe sadly.
http://saveie6.com/
If you are really paranoid, you can use whonix, which puts a vm in a vm, piping everything through tor and preventing just about any leak of IP information or exposure of OS exploits.
Silence is a state of mime.
Then someone will invent a new currency and the cycle repeat itself.
It has already been done. And far more than once.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Thanks man!
I work hard for my limited money and something like this is a life saver in case I get a trojaned mining app or a website. This will prevent it from getting through.
I
http://saveie6.com/
If someone hacks my bank and steals my money, the bank replaces it.
If someone steals my wallet and takes off with my credit cards, I'm not liable for the transactions.
in theory...
when I only need to pay my bills "in theory" then you might have made a productive statement...
I know **all about** how Bitcoin works, not just how you store it. I have a business that sells online and have considered accepting Bitcoin. I researched it through and through.
**that** combined with my other skills & the fact that I have common sense means that I'm a fool to accept Bitcoin at these exchange rates ***UNLESS I CAN SEE IT PLACED IN MY $$$ BANK ACCOUNT IN REAL TIME***
I typed that all bold b/c you irrational fanbois need to re-read it and think aobut it over and over b/c it is the core of what makes anything have value in this economy.
If a customer buys one of my products, WooCommerce (grumble...) can show me in real time the path of the money to my bank, then I can check my business bank account and see those $$dollars added to my bank account...then i can withraw that cash right at the ATM and buy ****anything****
Until bitcoin can do that it's just a game for hackers...
Thank you Dave Raggett
who decides how many BTC you get for mining a transaction?
remember how it halved not too long ago? who made that call? **kind of a big deal**
Thank you Dave Raggett
Properly setting up a VM, or in fact doing any proper security or even backups is beyond the abilities of most people. If those sorts of measures are required, bitcoins can't become a universal currency.
If you want to see how the pros do it, look back at the recent history
of Lehman Brothers, or Countrywide Mortgage. THAT is how you
steal, and the numbers involved are staggering.
***UNLESS I CAN SEE IT PLACED IN MY $$$ BANK ACCOUNT IN REAL TIME***
Which goes to show you are missing the point of using it as a currency. A real currency is something you hold onto, not exchange at first opportunity.
You only think you need to do that because you think the exchange rate of BitC against some other currency is too high. Why? Are you SURE about that? Because lots of people were saying the same thing all along, at much lower values. What if BitC doubles in value again? Then you would have been an idiot to exchange it away.
I'm not even a huge BitC proponent, I have only a tiny amount myself. But I can see that worry about the value of BitC against other currencies seems overblown, and there is a constant track-record of underestimating BitC, with every action that is supposed to bring the hammer down on exchange rates (like the closure of Silk Road) having the opposite effect instead. And I see real merchants slowly adopting payment using this currency. If there are enough real objects I can use BitC to buy then I am insulated from swings in value, and it makes more sense to hold than to get rid of right away.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
^this is how I actually feel. I'm using strong language b/c it seems this is the miinority view.
I really don't hate BTC. I think the concept is cool. I totally swear I bought 5 BTC back in late 09 when I was in grad school but I have no clue wtf I did w/ my wallet...
I just want to hear some common sense. The world is watching! This is tech if anything is....and we have gotten the behemoth to stop and scratch.
IDK the solution...IMHO maybe we need to pin BTC to the dollar until a major bank accepts it transactionally.
The mining exchange rate is a major problem to all that...its arbitrary. How much BTC does a miner get per found/completed transaction? Who decides that? If you research it the answer is......um.....Mr. Bitcoin?.....it just 'is decided'......
That's gotta change IMHO
Thank you Dave Raggett
> If those sorts of measures are required, bitcoins can't become a universal currency.
I agree with the insight in concept, but I don't think maintaining a server would be the defacto way to manage any serious currency. This is the stone age of cryptocurrencies. The fact that bitcoins are often stored this way, now, is an opportunity for another cryptocurrency to address the problem.
How do you go short on bitcoins? Details please.
right...getting technical...but my core critcism still applies...thanks for getting that text btw...its the text from the BTC wiki if I'm not mistaken...something quasi-official.
So, true, **according to this random block of text** with no source...the "reward for solving a block" is automatically adjusted.
We can't verify that, but lets assume it's true.
**how** is it automatically adjusted????
this paragraph was written with assumptions that are no longer true, requiring more explanation.
BTC mining has increased more than anyone anticipated with the +$1,000.00 valuation. That means that when this says,
"Blocks are mined every 10 minutes on average"
That average is completely blown out...(we can't verify this but logically it must be much larger now)
Also, the 'difficulty factory' is arbitrary....2016 blocks is not part of the alleged "automatically adjusted reward for solving blocks" yet it directly affects it.
Again...you presented **no citations or source**...I am trying so I gave the benefit of the doubt...
Still, none of the factors that comprise the "automatically adjusted" part of the block creation are publicly known and are, at any rate, based on a much smaller scale than is at work today.
bottom line: it's still arbitrary!
Thank you Dave Raggett
'You don't have to keep your Bitcoins online with someone else.
In fact, why in all hells would you even think of storing your wallet with someone else??? I'm fairly new to bitcoin, but the thought was so far from my mind that it took me a while to understand what the problem with these kinds of attacks was.
Don't people get it that Bitcoin is money? Storing your wallet on someone elses server is like giving them your money. You do that with a bank, but not with some random Internet site.
Assorted stuff I do sometimes: Lemuria.org
As a small addendum to what rasmusbr has already said:
if the wallet file is lost or destroyed, the coins within it are effectively gone, correct?
The short answer is yes. The long answer is a little bit more complicated.
If hacker still has copy of the wallet.dat file, the coin could still be stolen (in theory the file can optionnally be encrypted. In practice we all know how good humans are at picking good passwords).
key pairs in a wallet can also be generated using passphrases (so called brain wallet).
in theory the owner is the only one to know the passphrases generating the key pair and thus the only one able to use the private key.
in practice, again, we all know how good humans are at that task
(and before you ask: yes someone has decided to make a keypair using xkcd's "correct horse battery staple" comic).
worst citizens are the web services. they use their own wallet to process coin. you sent an amount to them, and then they process on your behalf. (some even allow you to upload key pairs). You have to trust that they are honnest people. You have also to trust their security measures that their key don't get stolen.
So out of all the various "lost" coins, some are possibly going to re-appear due to poor password strategies, or due to less scrupulous online companie which will decide to re-purpose un-claimed bitcoin account, or outright scam people into giving them coins and then running away with them.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
a vm in a vm
Yo dawg I heard you like VMs so I put a VM in your VM so you can VM while you VM.
How do you go short on bitcoins? Details please.
Same as shorting a stock, or anything else. You have to do it through a brokerage of some sort. They lend you the bitcoins to sell somebody else and the proceeds of the sale go into your account. At some later date, you "cover" your position by buying an equal number to the ones you shorted.
For instance, if you had shorted last year 100 bitcoins at about $8, you would have borrowed said 100 bitcoins from a willing brokerage, and you would have gotten $800. Then a year later, if you decided to cover your position and pay back the 100 bitcoins that you owed the brokerage, you would have to come up with $100,000 to do so. The brokerage also charges you interest on the loan of the 100 bitcoins.
This is a simplistic case. In real life, there would have been a margin call at some point and you would have been forced to cover your position earlier or deposit funds to cover your unrealized loss on the position. In stocks, a lot of time, you can't even short a stock unless you have the cash or other not shorted stocks to cover a certain percentage of loss.
I don't know if any brokers are actually doing this for people. It is probably too dangerous to do this right now, with the price going up so quickly. A brokerage may not even be able to collect on a margin call before the short trader is quickly in the hole for large sums of money.
With shorting stocks, your upside is limited, but your downside is unlimited. This is the opposite of purchasing a stock, where your downside is limited to your investment, but the upside is unlimited.
If you are not allowed to question your government then the government has answered your question.
Properly setting up a VM, or in fact doing any proper security or even backups is beyond the abilities of most people. If those sorts of measures are required, bitcoins can't become a universal currency.
This is the attitude of someone who is poor or broke. Those who want to make it find a way to do it and learn. VMs are mentioned for anyone who wants to learn about security and computers. If you are investing your hard earned savings it is prudent. I think even Grandma knows about hackers and how things are not always safe. Before you invest real money you research.
I am still researching wallets and transactions as I type this even though I am in IT. I want to prepare before I take the scary step of using a my bank debit card to buy shit off God knows where. Always prepare.
http://saveie6.com/
If I store my wallet offline and create an exact copy, how does someone know which is real? If someone stole one wallet what's to stop transactions from a backup?
I'm a consultant - I convert gibberish into cash-flow.
Step one - Collect Bitcoin
Step two -
Step three - Profit!
I know, I know, Step two is actually play the hacked card take all their users money. BC is like the fucking wild west right now, not gonna lie it's pretty fun.
Also, how did a value, any value, ever get assigned to a bitcoin? US currency was originally backed by gold, i.e. replaced gold over time (through the ultimate shell game). I don't grasp how bitcoins ever had any value at all. It is like saying Pac Man world records have a monetary value.
yes...and that is set at 2016 blocks by whom?
I know when you mine you add blocks to the chain....but it is not just "mathematically it is controlled"...it is allocated by a rule...a rule that is not made public or checkable...you are **assuming**
a couple Stanford undergrads could have the abilityo to change how the system finds the next transaction to process...that varies by alot of unsated factors
the block network has arbitrary controls
Thank you Dave Raggett
I know BTC per block mined is "dictated by protocol"
what we don't know is how blocks are chosen
with so many blocks mined, there are several acceptable solutions to start the next block, but they are not rewarded which was found first...they have to match each other another way...
ex: my local fiber ring...from an IT networking perspective I could initiate BTC transactions with myself and get first in line b/c the transmission of the record of my transaction has to go out to the BTC 'core'...if I mine solution numbers for transactions ****AND**** initiate transactions from inside the same fiber ring, I can guarantee my solution number gets picked as the one for the next block, because it's ***closer***
that's just one example...I understand and thank you for your response. I appreciate you acknoledge that hte 21,000,000 BTC limit is arbitrary...what you dont discuss is how things will change as the next "halving" approaches and finally as the last BTC gets mined...then you have infinite inflation unless you allow more BTC to be mined...then it becomes ***another arbitrary choice***
there **are** ways for mystery hands to pull strings behinds the curtains and **no one would know**
Thank you Dave Raggett
Surprised NO ONE is mentioning this....
Sheep Marketplace went down yesterday after weeks of suspicious behavior such as disabling withdrawals of money, a countdown to when withdrawals would be available but running at a slower speed, still no withdrawal when it expired, minimum of 1BTC withdrawal so people would deposit money, and more.
So far it appears some $47 million worth of bitcoins was stolen.
http://www.forbes.com/sites/andygreenberg/2013/12/01/silk-road-competitor-shuts-down-and-another-plans-to-go-offline-after-6-million-theft/
You can tell how powerful someone is by the magnitude of the crime they can commit and be able to get away with.
I'm not poor or broke, but I don't know how to set up a VM, and I'm not sure my computer security is very good. I also don't know how to rebuild the engine of a car, skin a deer, use a forge, do an appendectomy, use a gun, or perform a host of other valuable skills. The miracle of civilization is that since I know how to operate a linear accelerator, fly an airplane, and build femtosecond timing systems, I can somehow trade those skills for the vast array of skills that I'm missing. My computer skills are sufficient to protect the low value information that I have from casual hackers. I would not have the skill to protect a large value in bitcoins from a skilled attacker (and my computer skills are far above national average).
The advantage of conventional banks is that they can be used to provide good security for large amounts of value with minimal skill.
Boy, now that's some real convenience! Sign me up for this whole Bitcoin thing! An encrypted digital wallet in VM in a VM? That's SO MUCH EASIER than dealing with cash with all of the putting in the pocket and the removing from the pocket with the fingers.
I'm starting to think that Bitcoin is a collaboration of a lot of very brilliant performance artists attempting to see how bizarre and complicated they can make the relatively simple concept of "money".
Either that, or Bitcoin evangelists are just a bunch of morons.
But I'm optimistic, and I try to assume the best of people. So, I'm going to keep imagining all of you smart performance artists taking us all for a ride. Keep it up! It gets sillier every day!
I don't respond to AC's.
this is fun...I appreciate that you know how the system works, for real
I just said a bunch, plus other points (what happens after 21,000,000 BTC)...but you can always come up with an academic response that makes your argument at least seem plausible
like this:
not exactly! it is **expected** to happen regularly...that's the whole point...
you basically admit that my idea would work with enough computing power...in theory...
but whatever...I'm not doing this for posterity anymore as anyone who is still undecided about BTC at this point in the conversation can't be pursuaded by any other evidence
good luck to you...if I had BTC i'd be parlaying that shit...
Thank you Dave Raggett
This is the attitude of someone who is poor or broke.
No, that is the attitude of people who are rich. Someone who is financially successful doesn't have time to learn an entire professional level skillset just to do simple financial transactions, especially when there are much better and easier alternatives.
If you are investing your hard earned savings it is prudent.
Investing? Is Bitcoin a currency or an investment vehicle? Currencies aren't investments or investment vehicles, they are mediums of exchange. One can make money currency trading but that is not investing, it is speculating on a change in value in the short term.
As an investment vehicle, they are a poor choice because they are volatile and easy to steal. As a currency, they are a poor choice if one has to implement the security measures the parent posts suggest. Either way, it is a poor choice.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
I don't have a better word than "proxy", but here is how it works:
You have two accounts registered in the software, your exchange account, and your wallet (the one that is all yours on your local machine).
When you receive funds in your exchange account not from your wallet, it immediately shuffles it to your wallet.
When you receive funds in your wallet account not from your exchange, it immediately shuffles it to your exchange.
This way hacking the exchanges won't net anything, except accounts. Maybe integrate a canary feature so the exchange can turn off receiving funds if the canary is set (exchange is compromised) so you don't send funds into a hacked account.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
It seems to me that we could follow the trail from source to destination accounts in the block chain, so we can identify who has the stolen bitcoins.
Even with a mixing service, it should still be traceable in the long run.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
I have one for porn and one I am going to make for litecoin trading as bitcoin is too expensive already :-(
Why is the high price an issue, given that it's divisible down to 8 decimal places?
Most human behaviour can be explained in terms of identity.
You were asked
How do you go short on bitcoins? Details please.
You responded with a definition of shorting. How do you go about right shorting bitcoins? Discuss how someone would actually short bitcoins.
Q: How do I take a trip to Venus?
A: You find someone with a spaceship that can get to Venus, then you pay for a ticket, then you travel on that space ship.
Thanks for the help bro.
How easy is it to exchange bitcoins for actual money? I bought 150 years ago, which is supposedly worth quite a bit at the moment, but the only options I've seen for unloading them seems a bit shady (create an online account somewhere and deposit them...)
With the current exchange rate, they're basically too valuable for use in any kind of actual commodity since I can't pay for anything online with them.
So my question is, what's the real value, and why are the prices going so high? They must be selling somewhere, but what's the process?
I am here to make money only and so are 95% of everyone interested. Otherwise dollars would be easier.
If I need to make money I need to learn things or I will end up broke. Smart people learn all their is in everything money related whether it is a career or investment. Warren Buffett refuses to invest in things he doesn't understand. It is common sense.
If you want to take the risk you need to learn and since everyone gets paid in dollars why risk if there is no money to be made?
http://saveie6.com/
My point is if you are smart with your money you will learn before you take the plunge right? You do not make investments in things you do not understand right? Same principle.
If computer stuff scares you and you do not like risk then bitcoin and or litecoin is not for you. There are other ways to get rich. But, even Warren Buffett does not invest in industries he is not sharp in.
I know computer shit and I am still on the sidelines until I find a secure way to make transactions and secure a wallet and find a site I trust before I make bets and give out debit card info. Common sense.
http://saveie6.com/
I am moving my 0.0005 bitcoins out of blockchain.info to Electrum. Thanks for the warning qt client is to slow. It needs to download 200,000 blocks to synchronize with the block chain. i just downloaded qt client a few minutes ago.
were parted before they were parted...
Its interesting how you would use the phrase "guaranteed by the same mechanisms as your normal currency"
In what way do you feel that normal currency is guaranteed?
I looked at bitpay.com same problem as Mt. Gox...
But yes, I agree that theoretically I could set up a BTC wallet, take BTC orders online then process each of them at the end of the day into my $$$ account via Bitpay
first, you only "solved" one part of the Mt Gox problem...Bitpay still isnt a brick/mortar place I can demand redress for an error.
but to continue...since Bitpay "takes a cut" of each transaction, **i'm actually paying for my customer to use Bitcoin**
Please understand what I just said...the system now makes the vendor pay for the customer's convenience...
That's why if I ever **do** take BTC I'm making my own flat BTC fee or giving the customer a surcharge...which would incite anarchy...which is why i'm not taking BTC at all for now.
why should I have to take a cut in profits so my customer can use BTC???
Thank you Dave Raggett
yes...banks charge ridiculous fees...everyone knows this...
***your solution is to add another processing fee***
the processing fees are the whole problem that BTC was made to solve...now I have to **pay** for the privilidge of accepting the currency???
Thank you Dave Raggett
i can't believe a bit coin heist wasn't included in GTA V.
It's guaranteed that I have to pay my taxes with normal currency or men with guns will come shoot me.
True...normal currency is legal tender and its what the government insists on being paid with.
I am still curious in what way you feel that normal currency is guaranteed?
there have been many hypervisor breakouts too. i have source for a vmware workstation one right here... you are adding another layer to that onion, but its still able to be cut to the core. if you are truly concerned then use a separate physical machine.
Your story of Bill Gates' share in Microsoft does not apply to the working of the Bitcoin market, for at least 2 reasons ---
1. Unlike Bill Gates' shares in Microsoft (when he used to own a large portion of it), no one wallet contains more than 10% of total number of available bitcoins worldwide.
2. That 1000+ bitcoins that were stolen amount to less than 0.01% of the amount of bitcoins that have already been successfully mined.
In other words, even if Bill Gates was to sell 0.01% of the total number of Microsoft's share in the market it would not cause a run on Microsoft's share price.
Muchas Gracias, Señor Edward Snowden !
You are talking of a single transaction shifting the market 5% and you call that small?
Real economic markets panic of fractions of a percent shift with billions in transactions.
If a real currency could suffer a 5% inflation with the selling of a single million, everyone would conclude that currency is totally non-viable.
Basically you are saying that if you own bitcoins, you could lose 5% anytime someone sells a single million of a currency supposedly worth billions. That is NOT a stable reliable currency.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Could one then trace the blockchain once funds are received, and then say sorry, I won't deliver the merchandise as you are paying with stolen money. Bitcoins could even be returned to the rightfull owner less a appropriate "finders fee"?
Utopia I am sure, but technically could it be done?
My Pac Man records are hereby for sale.
Can we excahange bitcoins as well against the money?
http://muhammadkhojaye.blogspot.com
Another mostly one-sided scare story. At least they mentioned that everyone everywhere knows if you use an online wallet service, you'll lose your coins. Stupid people lose any form of currency every day. Bitcoins aren't immune.
Properly setting up a VM, or in fact doing any proper security or even backups is beyond the abilities of most people. If those sorts of measures are required, bitcoins can't become a universal currency.
This is the attitude of someone who is poor or broke.
and that would be most of the people on the planet. You don't want bitcoin to be used by most of the people on the planet?
In the free world the media isn't government run; the government is media run.
I'm not poor or broke, but I don't know how to set up a VM
It's not rocket science. I'd never had anything to do with VMs before, then I had a need a few years ago to run Win98 on new hardware which would not support it. It took about 15mins to get it up and running, including installing the VM software and then creating the Windows VM. It's all clicky-clicky gui stuff, guides you through the process, no prior knowledge required.
whonix is not a VM within a VM. It's just multiple VM's. There is one front-end user VM that connects over a private (virtual) network to another VM that acts as a gateway.
Virtual machines are not as secure as everyone thinks. The virtual machine software (kernel modules, etc) has root access to the host. If software within a client exploits the VM software it can gain root access to the host. Even a VM within a VM would not be secure. In some ways it's actually less secure to run stuff in a VM.
Well I'm not actually the guy who originally posted but the point is I have to pay my taxes with normal currency. Which means if someone wants to buy something from me I'm likely to accept normal currency. Theres a guarantee that as long as people are paying their taxes normal currency will have some value. Technically the US currency is backed by the US Military and thats a pretty damned strong guarantee. Whereas the only guarantee with bitcoin is that drug addicts don't like to be traced and they haven't yet figured out that bitcoins aren't anonymous at all.
That's not inflation. It's exchange rate fluctuation. Indeed, I doubt that at the current time a meaningful calculation of inflation can be done with bitcoins.
This aspect of trust is no different to existing banks, and it is the reason why banks started to be regulated and insured.
with one small difference:
- With Bank, your only choice is trying to find one that you can trust.
- With crpyto-currencies, you can also run your own node and in a way be your own bank.
In that case, you can trust yourself that you're note going to scam yourself.
And you also know more or less what security measures you're using
Bitcoin's concept of wallet simply adds the users as a possible element in the equation.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Normal currency is guaranteed by central banks, which are given the task of managing the currency by governments.
As an interesting example, I found an old £20 banknote in the back of a drawer just before I moved to London, which was no longer accepted as legal tender in shops. On the front of it (and all other UK banknotes) it says "I promise to pay the bearer on demand the sum of twenty pounds". I did a bit of online research and found that you could get it redeemed in person at the Bank of England, so I went along when I was visiting the area and after passing through the rather grandiose building there was a counter where they did indeed exchange it immediately for a crisp new one.
The main threat to a currency's real value is when exchange rates with other currencies get seriously damaged due to badly managed national finances. Then you get things like hyperinflation which can't really happen with bitcoin due to its' inbuilt scarcity, Howewver, it's so overvalued right now that I think that the only way is down unless it really just becomes a convenient money transfer mechanism for criminal activity in which case ways to redeem them in boring traditional currencies will then be stopped verry quickly.
I don't have a fiat problem, I have a troll problem
taking BTC for commercial transactions **adds a new fee**
yes fees suck...using BTC makes it worse...
because it adds another fee layer to get to the cash
Thank you Dave Raggett
Forget the VM then. Buy a small, cheap netbook, set up a client and keep it shutdown and offline when not performing transactions.
That's still a little over-pricey but cheap hardware wallets are on their way.
Bootable USB keys also work.
If you are rich, you pay someone else to set up your VM, no? Or more likely you have a dedicated system.
I am still researching wallets and transactions as I type this even though I am in IT. I want to prepare before I take the scary step of using a my bank debit card to buy shit off God knows where.
"debit card"?
Don't do that.
How do you go short on bitcoins? Details please.
Ok, for the sake of convenience I'll pass over the part where you plug in your computer to the electricity, press the power butoon, and open your browser. I must assume that at least you know something.
1 - Write: www.bitstamp.net in your browser address space
2 - Put your user name
3 - Put your password
4 - Press the enter key (it's that big one on the right of your keyboard)
5 - Transfer your bitcoins to the address provided in the bitstamp.net page (sorry mate I can't help you with this one since I don't know what bitcoin wallet you use).
6 - Click: Sell bitcoins
7 - Go to the withdrawals page
8 - Fill in your bank details
9 - Click "withdraw money"
I know, it's quite an obscure and difficult process, but this is a brave new world, and things like clicking in the internet explorer icon and login in onto a website are only easy for those crazy early adopters of technology. Just keep trying there and one day you'll make it like the other genius that accomplished the feat before you.
...
I *want* to take BTC...but if I do, it is **not free** for me!
I don't consider the transaction complete until it is $$$dollars$$$ in the bank
That goes for *anything*...you can't run a business with any other notion.
BTC is a wallet is not currency. It becomes currency when it is transfered to legal tender.
Thank you Dave Raggett
My grandmother stored enough money to buy a car 40 years ago under her mattress and now it's enough to buy an hamburger. I stored enough money to buy an hamburger in my bitcoin wallet 1 year ago, and now is enough to buy a car.
There aren't many guarantees, but there's a lot of structure that is missing from BTC.
First, there's a guaranteed market for dollars: the various governments in the US. All taxes etc. are due in dollars.
Second, there's tradition: everybody in the US is used to using dollars, so I can buy almost anything I want with sufficiently many. This isn't true for bitcoins.
Third, there's the US government, which will try to keep the value of the dollar from varying wildly by various means. It doesn't always work, but there's very strong financial forces for stability.
Fourth, there's regulations and mandatory insurance on banks that use dollars. I bank with institutions that have been around for a while, and are probably reliable. This isn't a guarantee of future existence, given how fast a rogue trader can lose billions, but it's better than any bitcoin institution I know of. Moreover, if one of my banks goes away, I'm guaranteed to get up to $100K of my savings back. The only way this could fail is a truly cataclysmic financial upheaval, and all bets are off anyway if that happens.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
You cannot "panic" a market that is experiencing huge fluctuations in prices already. There is no panic here, as most people already expect huge fluctuations. I'm sure there will be many bubble n burst cycles in the BitCoin market. This is not a market for the timid.
So, in short a 5% drop is NOTHING to people in BitCoin Market, and when the price recovers. The real problem is the larger Bubble that is occurring at the moment, at some point, people buying at $2000 will find the coins back down at $250 when someone liquidates 50 million to fund their new yacht.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.