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Bitcoin Thefts Surge, DDoS Hackers Take Millions

Posted by samzenpus on from the all-your-bitcoin-are-belong-to-us dept.

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.'"

4 of 305 comments (clear)

  1. Mine are safe by raftpeople · · Score: 4, Funny

    in the couch

  2. Re:Something I've been ruminating about all day by Anonymous Coward · · Score: 4, Funny

    obligatory xkcd

    Extrapolating
    http://xkcd.com/605/

    Without knowing rate of loss vs rate of pool expansion there is no way to theoretically mark a point where bitcoin loss>bitcoin gain. Theft still leaves bitcoins in the system, so no real loss there (to the system). I can see a clever developer/maker creating a usb/sd bitcoin wallet. Keep the assets stored off the computer, in a safe place and no risk of government seisure.

  3. Re:A limited number of Bitcoins by PopeRatzo · · Score: 5, Funny

    They could easily sell all 1295 bitcoins and pocket $1 million due to buyers betting on the greater fool game.

    It depends. Will someone have the $1mil to buy them all? If they start selling in smaller lots, the value will go down with each transaction.

    The only difference between bitcoins and tulips is that at least you could smell the tulips.

    --
    You are welcome on my lawn.
  4. Re:Bitcoin hype over? by faedle · · Score: 3, Funny

    > Mt. Gox? Seriously? How do you even pronounce it?

    "Magic the Gathering Online Exchange."

    That should scare you.