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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.
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.
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
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 ]
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.
Interestingly enough, a lot of the small/medium businesses I work with that do business internationally have the exact same concerns with international currencies. (Dollar, Yen, Euro, Pound are accepted as safe... but even a currency as significant as Renminbi makes some people skittish.)
***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
"The reward for solving a block is automatically adjusted so that roughly every four years of operation of the Bitcoin network, half the amount of bitcoins created in the prior 4 years are created. 10,500,000 bitcoins were created in the first 4 (approx.) years from January 2009 to November 2012. Every four years thereafter this amount halves, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12, and so on. Thus the total number of bitcoins in existence will never exceed 21,000,000. Blocks are mined every 10 minutes, on average, and for the first four years (210,000 blocks) each block included 50 new bitcoins. As the amount of processing power directed at mining changes, the difficulty of creating new bitcoins changes. This difficulty factor is calculated every 2016 blocks and is based upon the time taken to generate the previous 2016 blocks"
And a credit/debit card processor or bank won't do that? :)
'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 ]
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
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.
That depends on what the person who got illicit control of the BTC does.
What do you suppose occurs, if the "thief" doesn't spend their illicit booty? Perhaps they have their lawyer figure out the statute of limitations for any potential crime they might get charged with, and plan their BTC transactions to occur, after that all runs out.
Perhaps they will pass the private key to access the BTC down to their great-great grandchildren; and the spends may occur, 100 years after the crimes have been forgotten.
If they go deposit it in an exchange account, and take out $1m in US Dollars; then, yes, they will be identifiable.
On the other hand.... what if they only use BTC in anonymous transactions with other criminals?
Whether such evil black market transactions can ever be traced someday or not, depends if their partners in crime get caught.
Other possibilities are: the thief just takes the BTC out of the market --- and benefits from the other BTC they are holding increasing in value (due to less BTC in the market).
I have a hard time believing that you refuse to do a few minutes worth of research to claim over $150,000. If you did, you'd know that there are places that will make deposits into your bank account fairly easily. There may be delays involved, but it can be done. You should be doing your own homework when it comes to this stuff, asking strangers will result in your wallet becoming one of these statistics.
Who do you believe is setting "hidden rules" on a decentralized network using open source clients? That's a pretty significant level of paranoia.
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
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.