Slashdot Mirror
Bitcoin Exchange Flexcoin Wiped Out By Theft
mrspoonsi writes "Joining MtGox, Flexcoin today announced they have had their vault wiped out, to the tune of some 896 BTC (about $615,000) by hackers. 'On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC, dividing them into these two addresses: 1NDkevapt4SWYFEmquCDBSf7DLMTNVggdu [and] 1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6. As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.'"
Not!
Which one is next?
I came here to laugh at you.
Inside job...
"Wow, we just got 896 bitcoins"
"yup but because we did the value is now $2"
Take the Bitcoins and run!
rocks ... doesn't it.
This is what you wanted right?
Seriously, if you come here to talk about how this isn't a fundamental bitcoin problem, you deserve to have your noise smacked with newspaper like a dog.
The only 'benefit' bitcoin has is that its unregulated and not as well watched by the government ... which means its easy for people to just steal your money and lie about it ... I'm sorry, its easy for someone to setup an exchange and let someone else steal the coins from the 'hot wallet', whatever the fuck that is.
Before you open your mouth to defend bitcoin ....
THIS WHAT WE'VE BEEN TELLING YOUR STUPID DUMB ASSES ABOUT, NOW SHUT THE FUCK UP, ITS A SHITTY IDEA.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
im don't claim to be sherlock holmes, but im pretty sure im detecting a pattern here...
never bring a twinkie to a food fight.
So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly.
Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?
It just seems like this is the kind of thing which sounds great on a whiteboard, but in reality is anything but.
Lost at C:>. Found at C.
500 BTC to 1NDkevapt4SWYFEmquCDBSf7DLMTNVggdu and the rest through 1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6?
Q: Where will my bitcoins go?
A: Bitcoins deposited with flexcoin will be stored on our secure servers. They will remain in your account, and your account only, unless you authorize a transaction with them.
Wishful thinking.
From the Terms of Service:
We have taken every precaution to defend your bitcoins from hackers and/or intruders. However, Flexcoin Inc is not responsible for insuring any bitcoins stored in the Flexcoin system. You are entering into this agreement with Flexcoin Inc. You agree to not hold Flexcoin Inc, or Flexcoin Inc's stakeholders, or Flexcoin Inc's shareholders liable for any lost bitcoins.
We'll see.
How long till bitcoins become illegal tender? I wonder if these coins are being moved around to another exchange, liquidated, and move on to the next one to rob. This is happening way too frequently, and since there isn't any enforcement tied to it, there will be no recourse for these exchanges. Sitting ducks, anyone?
-Yim
By stealing so much from these exchanges that they end up closing... they are just destabilizing the currency and cause the price of bitcoins to plummet. Any hacker doing this for profit is likely quite retarded. I can see why a government who does not like the idea of a cryptocurrency would perform such a theft, however.
So, it doesn't work - thousands of very bad men are trying and succeeding to break the ownership chain. No matter how hard you try to plan, you can't plan for malicious agents. And if you could, precise implementation is done by human beings, who forget where they last saw their toothbrush. . Voting machines? Trivial and done, hacked to hell and back and looks like elections were hacked ten years ago. Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed - and the designers assume bad people won't try to break it - will break it - for revenge or to make a point or just 'cause they are psychopaths.
Keep systems as simple as possible to perform their function. Don't lard layers of clever on top of things that already work. Complexity insures failure. The Bitcoin protocol can't do what must do in the real world.
I am surprised that the value of BitCoins hasn't crashed from folks selling them for their currency of choice.
That's what I'd do if had these things: withdraw from the "bank" and sell for $US before mine get stolen.
Somebody stole a bunch of tulip bulbs!
So..... here's the thing.... .... while I'm no user nor defender of bitcoin, the idea seems fun...
except you're pissing off the biggest governments in the world (US, Russia, China) by creating a currency they can't control........ currency is used as a method of control ...now if I have an army of digital terrorists (APT's) and a digital currency that may undermine my rule........
well I know exactly what I'm going to do. I'm going to steal and terrorize anyone who accepts it.
Flame was ridiculously amazing, and those same programmers are still at work doing SOMEthing..... I'd bet they had a hand in some of these.... they seem too well co-ordinated, first one, then as the media coverage starts to die, another....and wait a week, we'll hear of a third.
Is it one person or hacking group behind this? In the United States government, there are some who have expressed indifference to bitcoin, and some who see it as illegal and a threat. I suspect the indifference crowd is lying would also like to see it gone. If it is the United States government robbing all these exchanges blind, it would be too new a program to be in the Snowden files. Seriously, at this point is there a single one among us who not put these actions past the American government?
Brought to you by Carl's Junior.
The data penetration market is currently very involved and you need very good security, on all three levels, electronic, physical and personnel to keep data secure. I think the lure of the bitcoin profit was too easy for new people to enter.
So people set up these multi-million dollar value exchange/vaults without security as thought ONE. I think this is more a testament to the cowboy free range nature of the bit coin market when faced with organized criminal hacker cultures.
Although Flexcoin labelled themselves as a "bank" what they really were was an EWallet service. Why people still use these web-based services to store their BTC balances is beyond comprehension.
So just how much evidence is required that putting money into a completely anonymous system that operates outside of the purview of government regulation is no different than flushing it down the toilet?
Let the bitcoin advocates come and say "it isn't so! The government is EVIL!". I will continue to laugh as people fail to realize that anonymity with no recourse is *more* evil...
Ya know, I'm reminded of the words of one William K. Black (UMKC School of Law), economist and, and the only combination of the two to exist, a criminologist. He was once asked, what is the best way to rob a bank? His answer was; 'be a banker'.
Really, the entire Bitcoin story has been one that was highly suspicious all along. Have you ever read a Bitcoin story that didn't make your left eyebrow raise like Mr. Spock in a room full of illogic? I watched 'The Wolf of Wall Street' recently and thought, *pffft*, soooo dated. I reckon in 20 years someone in Hollywoodland will catch up with reality enough to make a film in that vein about Bitcoin.
or at least temper the amount youre willing to commit to them.
Good people go to bed earlier.
Ok, I don't understand how bitcoin works, but ultimately they're just encryped hash files on a disk, right? So unless the other person spends them before you do and you have a backup, how can they be stolen?
Someone please explain...
What I want to know is HOW are the coins being stolen? Is it standard hacker stuff with viruses, malware, etc?
GREETINGS, Permit me to inform you of my desire of going into business relationship with you. I got your contact from the International web site directory. I prayed over it and selected your name among other names due to it's esteeming nature and the recommendations given to me as a reputable and trust worthy person I can do business with and by the recommendations I must not hesitate to confide in you for this simple and sincere business. I am Wumi Abdul; the only Daughter of late Mr and Mrs George Abdul. My father was a very wealthy cocoa merchant in Abidjan,the economic capital of Ivory Coast before he was poisoned to death by his business associates on one of their outing to discus on a business deal. If you send us your bitcoins now to our highly encrypted, uncreacable account, we will 1) Keep it safe from hackers 2) Wire you the equivalent USD to a bank account of your choosing We are willing to offer you 15% of the sum as compensation for effort input after the successful transfer of this fund to your designate account overseas. please feel free to contact ,me via this email address
wumi1000abdul@yahoo.com
Sounds to me like there is a golden opportunity for someone to insure bitcoin deposits. Sadly, the world is full of criminals so that thefts from both external and internal sources will be with us forever.
I need money for a life-threatening operation.
I take BTC donations at 1JJh21VdTWG9LmsV9zAJ1WAfvcGZ7HMKjJ, Doge donations at DAa6Q7fZpk4Mp1DVZFKUyeXR8AhxQhzAiQ, FTC donations at 71R7GmWPd3rmScxDZuN54AZWR9hVE9bPMy and LTC donations at LWuos79ohFZWd2yskCNnMnDpff8NtQsux8.
So every time somebody with a crypto-currency wallet and insufficient security measures loses their currency its news?
Should we abolish cash because robbers can steal it?
Greed is the root of all evil.
e-wallet users are retarded and deserve just that shit.
This isn't an inherent weakness in bitcoin, it's the result of people Doing It Wrong(tm). As usual, kind of.
CLI paste? paste.pr0.tips!
www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292754183/
This is not a failure of bitcoin. Suppose you had a stack of companies whose purpose is to store your physical gold and prevent it from being stolen and to serve as an exchange allowing customers to trade gold for currency. Then, it turns out that some of them had inadequate security or were outright crooked and the gold they were storing went missing. This would not be a failure of gold itself. Sure, if sufficient quantities of gold were affected, it would affect the price of gold, but it does not change gold itself. This is the same situation.
The real problem here is the notion that bitcoin is a currency. It really isn't. It's a virtual commodity much like gold, with similar properties save for the fact that gold is physical and bitcoin is not. (Sure, the odds that everyone suddenly decides to pack up their toys and ignore bitcoin are much higher, mostly because there are no "real" uses to bitcoin, unlike gold which has actual uses other than being somewhat "rare" and looking pretty.) The same things that make gold less than idea as an actual currency (or a backer to a currency) apply to bitcoin. Sure, you can use either one as a place holder in a transaction if both parties agree, but you could just as easily use a common fiat currency, chickens, or grains of sand.
If it works in theory, try something else in practice.
I don't really understand why people are keeping their Bitcoins in these online "bank" accounts. The point of Bitcoin is that it is digital cash. It has the negatives of cash, easily stolen, along with the positives, hard to track. Being a form of cash rather than a credit account allows you to store it on your own hard drive or USB drive. Hell, put it in your Dropbox and it would be safer than having it in one of these online Bitcoin "banks". The money should only be in these online accounts for the time it takes to change it from US$ (or whatever currency you use) to Bitcoins or in reverse. It should be treated as an exchange not a bank account. I don't go to a currency exchange in another country, change my US$ to Pesos (for example) and then leave the money there in the exchange for months at a time.
-- ssoorrrryy,, dduupplleexx sswwiittcchh oonn.. -Quote found on actual fortune cookie.
Yet... Now is probably a good time to start a Flexcoin exchange which you can then "rob" and shut down in a years time for some easy $500,000.
Of course, if bitcoin itself goes bust due to a reputation for this sort of thing, all that hacking and all that farming will be for naught.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
and there you have it. Gold really is a limited resource. Diamonds are not. Bitcoins are not even tangible.
With the number of high profile thefts of bitcoins and the apparent clean getaways of huge amount of money, we are entering a new golden age of malicious virus and Trojan research, who results we unfortunately will see spill over into the ordinary world of pc and Mac and ios and android within a few months.
right. fine. I'll give you the benefit of the doubt...but hilariously, all the rabid Bitcoin defenders have all gone away here on /. only to be replaced by its critics.
i can't help but think that some of the posters who are saying "I told you so" were also big time Bitcoin fanbois a few months ago
look at this discussion, from early December, when I **dared** to ask if Bitcoin had peaked: http://yro.slashdot.org/commen...
look at the mods...
I want /. to do better on this...MtGox and Bitcoin were hype, and sockpuppets on /. helped build that hype & it pisses me off
real techies should have seen this a mile away! now everyone thinks we're idiots
Thank you Dave Raggett
Am I the only one that got "Queen - Another one bites the dust" playing in their head right now?
- Don't do what I do, it's probably not healthy nor safe. -
Is there an electronic currency like bitcoin, but which is much less private and traceable? This way we have the convenience of electronic transfer and the safety of normal cash.
Why OpalCalc is the best Windows calc
"Why is anyone assuming this is being done by 'criminals'?"
Probably because many of us don't run around assuming the truth of unevidenced hypotheticals. But you go on and be you, okay? Don't let us keep you down.
You'd think exchanges such as these would store wallets on offline media. That's the only way we can be relatively safe from digital heists.
I don't own any bitcoins, but I hardly think security breaches at a couple early exchanges is a death knell for the idea.
Also, the unregulated nature of bitcoin is not at all the "only" benefit. It is one of many benefits.
The bitcoin idea is fine, the problem is with the value. A bitcoin's value should be the marginal cost of production, which is, what, a dollar or so. Above that, it's just speculation. At some point people will realize that the benefits of bitcoin are indistinguishable from the benefits of all the other altcoins, meaning the overall quantity of bitcoin is unlimited (insofar as it can be exchanged for doge or lite or whatever comes next), making the held value very low. ...In my opinion.
As an aside, what the motherfuck am I supposed to do to get two fucking carriage returns between paragraphs? I can't just type the two CRs, apparently, nor does inserting a <p> tag work. How fucking retarded is this piece of shit Beta idea anyway? Fuck beta.
Liable for what? For unauthorized taking with depravation of use (that is, theft) of a nonphysical thing that has real value -- of course. It's pretty obvious, what did you think they would be liable for?
I'm more than happy to defend the concept behind crypto-currency ... unregulated by governments and all!
What I find a bit humorous are all the people who were so greedy and eager to make a quick buck on bitcoin that they immediately exchanged considerable amounts of traditional, govt. backed funds for it, only to park the bitcoin in one of these public exchanges. Then they're all happy and excited, until the site gets hacked and their bitcoin disappears (or an unscrupulous operator take the money himself, pretending it was a hack involved, and shutters the site). All of a sudden, "the sky is falling" because nobody is there to come to their rescue, to get back the lost crypto.
ALL of this was perfectly well known as risks of using a decentralized currency from day 1! By keeping the bulk of your crypto in a personal encrypted wallet and making sure you have backups in safe places (on a USB stick kept in a safe deposit box, perhaps?), you would never encounter any of these issues.
IMO, the only "right" way to trade on these exchanges is to push funds in only when you're ready to trade them. Do your trade, and extract your resulting funds again, ASAP. Sure, you *might* lose that money if something goes bad in the middle of your transaction -- but that's, IMO, a much more acceptable risk.
Start treating bitcoin more like cash, people! Would you just hand, $10,000 or $20,000 in cash to some stranger, because he promises you he'll enable you to buy something else with it of greater value, if you just leave it with him for a while until the right moment comes along?
Why is anyone assuming this is being done by 'criminals'?
Because that is by far the most likely answer. These are almost certainly the equivalent of digital bank robbers. Where there is poorly secured money to be stolen it will be stolen. Furthermore if you steal something you are by definition a criminal even if you are something else as well.
I know that folks involved in bitcoin like to invoke grand government conspiracies (they seem to be a bit paranoid) but the government doesn't have to steal bitcoins. If the government wants to squash bitcoin it will pass some laws and regulations and make it illegal to deal in bitcoins. Why go though the window when you can smash down the door?
While it is rare there have been several attempts by the US government to make some kinds of barter/trade illegal. The most obvious is of course Executive Order 6102 where FDR basically made private ownership of gold illegal. Even today I believe it is illegal to "pay" a person in gold, for example if you watch "Pawn Stars" on the history channel there is an episode where and individual sells them something and wants gold in return. They have to go through this weird little process of handing him a stack of money, and he immediately hands it back and asks for gold. I know a company was trying to create a private currency based on precious metals a few years ago, I think they were raided and all of their precious metals seized.
Comment removed based on user account deletion
Bitcoin is a service, not a commodity.
It's a big transaction log. When you spend them, you provide the service of signing your transaction with a private key that the network agrees controls the pool of coins from which are spending. You are exchanging this service for the goods and services the recipient of that transaction agreed to provide you with (hopefully).
In the end the only value of a wallet is the ability to provide this service. That's why when a wallet is destroyed those coins it controlled are lost to the network forever.
"Real" currencies are essentially also this kind of service, since we moved off the gold standard. The only value fiat currency has is what someone will agree to give you in exchange for providing the service of telling your bank to move some numbers to their account (whether you do this electronically, or indirectly through cash).
The main differential is that Bitcoin is founded on the mutual trust of all participants, whereas fiat currencies are founded almost entirely on confidence in a few entities - the government, and the banks. Bitcoin probably wins on that count.
The difficulty here is that there is no way to repudiate transactions after the fact - unlike with a bank, there is no "Undo". But this is also a feature. To provide an ability to do this would require a central body to have key escrow of your wallet keys, which would completely undermine the whole network AND be a rich target for exactly this sort of theft.
The problem is that people don't understand Bitcoin. Trusting a web-wallet is an entirely different proposition to trusting a bank, but they are used to thinking about it as if it was a bank.
Question here. I've read several articles on how bitcoin works but I'm still unclear on specifics.
Unless the stolen bitcoins can be laundered and spent, they are worthless to the thieves. Sooner or later they'll want to spend or sell them. At that point, won't the distributed blockchain be notified of this transaction? '
Also what happens if a user had a backup of his bitcoins on a usb stick somewhere?
The governments knew that if bitcoin became mainstream it would destabilize the world economy. The Target theft that was quickly converted to bitcoin shows a little about how this underworld currency could hurt law abiding citizens. I think that the person who said the people who created suxtnet could have done stolen these bitcoins hit it on the head. Problem solved. Before it got out of hand.
Bitcoin is not a commodity or a currency. It is Bitcoin and unique.
love is just extroverted narcissism
Comment removed based on user account deletion
How traceable are the bitcoins that are stolen? Can the transactions be followed form wallet to wallet to determine what bank account or person physically withdraws the money?
Can you track every transaction into and out of a wallet?
These guys aren't banks, and your deposits with them aren't FDIC insured. This is why where there's some bank robbery, I'm not concerned how much money they tank. The bank's customers' money is safe.
If a real bank stored my bitcoins, then it's not a problem if they're stolen since the deposits are insured. However, with these fly by night operations, you're no better off then using a safe in your basement (or in someone else's).
Until these crypto currencies are insured, I'm not touching them.
Say one were to actually track down the sumbitches who did it, had undeniable proof they did it, and they were arrested and prosecuted. Sure you could charge them with computer fraud, illegal wire interception, and the like, but would or could the government prosecute them for actual theft, or try to compel them to return the coins as part of a plea?
.
Prisencolinensinainciusol. Ol Rait!
How would that be different from the kinds of clawbacks that happen when someone commits a large-scale fraud and a receiver retrieves the money spent by the person who committed the fraud?
Material goods get seized and auctioned, but in the case of cash transfers the receivers often claw back the money from vendors and even charities. It happened here when Tom Petters ponzi/fraud was exposed, I distinctly remember a story about how some charities who had been the recipient of large donations by Petters had been kind of fucked when they found out his donations had to be given back.
The same kinds of thing can happen to people who unknowningly buy stolen merchandise. An article on automobile title fraud talked about people who had bought cars from legitimate car dealers who had sold the cars in good faith, believing the title legitimate. When it was discovered that the titles were fraudulent, the new owners lost their cars. It was reported that the dealers reimbursed the owners for their loss (it would be reputation and lawsuit nightmare not to).
You could do a bitcoin blacklist for stolen coins, but you would need an agreement by exchanges to respect it and probably some kind of government/regulatory oversight to ensure that a blacklist was enforced and entries were legitimate, the problem being it would then not be free of government influence and the risk (however remote) that the government could decide to arbitrarily blacklist bitcoin holdings.
Hey, I have the perfect solution! After each deposit, the bitcoin exchanges should print the critical bitcoin info out on paper (encrypted first with a private key) then destroy the electronic copy. Then, in case they get robbed by a physical thief who is also a hacker, they should destroy all copies of the private key. See? It's perfect.
Why would anyone trust their funds to these people?
Good question. The answer is that they have a poor appreciation of economics and a worse appreciation of risk.
Bitcoin itself is not a shitty idea.
We disagree on that point. I think bitcoin is an idiotic solution in search of a problem. The rather narrow problems it purports to solve (money transfer fees, etc) are done by externalizing a great deal of risk and cost. If you really account for all the costs and all the risks it isn't actually cheaper than currencies like the dollar. In reality it is used mostly by those who are either ideologically motivated or find the idea of it romantic or (unfortunately) by those who are engaging in illegal activities of one sort or another. A lot of people are involved too as a get rich quick scheme.
But to say a system that offers frictionless payments is a shitty idea and should not even be attempted is stupid.
Bitcoin is anything but "frictionless". It carries very real and significant costs including opportunity costs, exchange rate risk, security costs, liquidity problems, volatility costs, and more. It is not widely accepted, requires a computer, has essentially no physical payment infrastructure, etc. Any merchant that accepts bitcoin and doesn't charge some fairly hefty fees to use it is being incredibly irresponsible given the risks involved.
One last thing and more of an open comment to people who have bitcoin. "Don't be a dumbass and let Lenny hold your bag of cash for you!" Geez does it even need saying?
Yes it does unfortunately. Many of the people involved with bitcoin are smart but too many are not financially sophisticated and certainly don't seem to appreciate the risks involved.
I think you're right about the govt not being able to stop you using BTC, but here in the UK they have rules about investments and who they can be marketed to. If you are a high net worth individual or a 'sophisticated investor' ('proven' with an accountant's letter, or directorship of a reasonably sized company) then investment companies can market any kind of crazy stuff to you. If not then they can't.
I'm guessing that the govt could say that offering BTC to non-investors is essentially marketing an unregulated investment product. I don't think that it is, but the government just needs to define it as that and then they could stop you using BTC with anyone but those who are legally high net worth or sophisticated investors. Might somewhat kill the micropayment market.
I don't think it's possible to make something "illegal tender", at least in the US. If I want to trade you one thing for another thing, it's hard to see the government saying we can't do that
Go ahead and try to trade some schedule I drugs for anything else. Let me know how that works out for you.
The government can and does outlaw all sorts of transactions. Bitcoin is not immune.
I am having a hard time determining whether the theft is real or not. Given the anonymous nature of bitcoin, who's to say that the theft wasn't done by some associate of those running . Then again, does it even make a difference?
How will the protocol handle stolen bitcoins?
How do you identify the stolen coins and remove them from circulation/flag it/return to the rightful owner? If not, how will a merchant/buyer/seller can successfully handle a transaction?
Answer to the above will also give a clue if the exchange owners themselves stole the coins.
Tat Tvam Asi
place an order in bitcoins amount of "product" equal to $X. Sell on streets in cash for $X + markup. Watch bitcoin value "conveniently" fall and pay back promised amount bitcoins, now valued much below $X
That's called a short sale. It requires someone to sell you something before you buy it. You'll make money if the value of the asset being bought falls relative to the currency between the time you sell and the time you buy. However since there is no guarantee that the currency will fall you have theoretically unlimited downside risk if the currency rises and the best you can do on the upside is to double your money.
Frankly anyone who agrees to be a counterparty to a short sale in bitcoins is a moron who deserves to lose their money.
And while I have your attention: F**k BETA!
Hey, everyone considers me a trust-worthy guy, so I'll hold on to your bitcoins for you.
I'll even pay a 5% per-annum interest on any coins you leave on deposit.
Just as many coins as you like to 1K31wC7z53tG2rsCHhUJTYkDi4q5pSWyqF and I will send back monthly interest payments!
Not trying to troll - why aren't there bitcoin deposit insurance agencies? They would have to do a security audit before they could set a rate, but I don't see that as a huge barrier. The only reason I see for why deposit insurance is currently all state-run is because the government subsidizes it so much that no private insurer could compete.
As a consumer, would you be interested in an exchange with higher fees if it meant reimbursement in the event of a hack?
Or is this a non-problem because everyone is already storing next to nothing on exchanges (896 BTC isn't even $1 million)?
Target heist was turned into bitcoin....no more bitcoin...CIA
All banks are covered by the FDIC. Oh, wait... Make that "real" banks that deal in "regulated" currency. The libertarian fan-boys seem to forget that this kind of BS (MtGox, Flexcoin, etc., not to mention easily manipulated volatility) are exactly the reason why real currency is regulated. You want to play "The Man can't touch my money", fine. Just don't cry to The Man about it when bad things happen.
I, like most of you, have a checking (and savings) account with a traditional bank. That bank has a web site. If that bank's web site gets hacked, my money is at risk. (Forget about FDIC for a second, because there's no reason a bitcoin exchange/online wallet site couldn't provide insurance.) My money could get transferred to another account, then withdrawn before I realize what happened. Why doesn't this happen as often as we hear about these bitcoin exchanges getting robbed? Is it because of regulations? I don't think so. As far as I know, there's no government regulation for "this bank's web site is safe because it implements these technologies we've decided they must implement." It's because the banks know that if their web site's reputation as a secure site becomes tarnished, they're going to lose a lot of customers.
My point is that there's no inherent security enhancement in big banks' web sites just because the banks are regulated and deal in government currency. The reason they're safe is because they've poured a lot of resources into making them safe, and the reason for that is so they don't lose customers. These bitcoin exchanges that are getting robbed obviously were not spending the amount of time and money necessary to ensure their safety. That's it. It has nothing to do with whether they deal with bitcoin or dollars.
When does this happen in the movie?
As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.'"
A microcosm of the US economy.
"If any question why we died, Tell them because our fathers lied."
I just can't help but laugh....I mean, it's no different than bank robbery, except, there's nothing physical to break into.
Bitcoin is so awesome...lololol
Bitcoins enable things like the Target Heist. so the CIA took them out.
I keep saying it, nobody wants to listen.
Bitcoin was doomed to fail from the very beginning. It's a grand pyramid scheme. The exchanges are just near the top of the house of cards. Whoever has all the starting coins likely was selling them slowly until the exchanges collapsed, or had the intention of doing so, but someone beat them to it.
So I have a reasonable question I'll post here. On the one hand it seems, at first glance, to be stupid to put your e-coins in a third party vault. Unlike gold, your home computer is theoretically as good as any third party as a vault/wallet for e-coins. So people who lost money at Mt Gox just seem like doofuses for using it as an online wallet. In the case of flex coin, the money lost is flex coins apparently, not their depositirs who were in off line storage.
But then rethinking that, maybe it is better to trust a professional 3rd party (i.e. but not perhaps Magic the gathering wizards) to manage your security? there's big bussinesses in managing computer fleets simply because doing it right, rolling your own, is non trivial. It's just like the notion of not writing your own implementation of SSL in PHP for your e-commerce site-- dumb. Much better to find an environmentally tested and hardened openSSL with a good history.
Managing your own coins has all sorts of patch, trojan and back up failure perils. sure you might do it right but if it's to become a ubiquitous currency, my grandma has to be able to do it right. So even though individually the accounts are distributed, they are potentially large and easy to get to, compared to say mugging.
So is it really dumb afterall to trust a third party with your bitcoins? Isn't waht is really missing here is some sort of accreditation standards for third parties so we can know that size doesn't equal quality (see Mt Gox).
Some drink at the fountain of knowledge. Others just gargle.
So how exactly does one "steal" the coins? The blockchain is public. If you know the wallet ID of where the funds went TO, it's not that hard to follow those coins around until they (someday) exit the system as hard currency entering someone's bank or being spent on goods/services that are delivered to a physical human being.
One possibility is that the site was "hacked", as the operators claim.
The other possibility is that the operators decided that walking off with ~$600,000 worth of Bitcoins was easier and more profitable than continuing to run the site.
Since, apparently, no one knows who the operators are, and there has been no evidence of a hack released to the public, why should we believe that the first thing happened, and not the second?
It has everything to do with the bitcoin protocol. The very nature of the system allows for any type of intermediary to fake theft or steal from themselves with virtually no way to prove where the bitcoins really went. If banking execs could drain all deposits into their own hidden/offshore virtually-untraceable account, some of them would! Sure, it would mean the end of the business, but to some crooks, they don't care - they still win.
This flaw is so mindblowingly obvious that I can't fathom why anyone would trust a bitcoin exchange.
Contrary to the liberatard delusion, government doesn't have a monopoly on currency.
Bearer bonds have been around for years and are in effect private currency.
Corporate script as also been around and is also explicitly private money.
Private industry has been hiring convicted felon Mitnick for years.
Your tirade shows nothing but ignorance.
Or would that break its reason for being? No FDIC for bitcoin.
Time for a new Political party in the US (or two!) One is off the rails Other cant pony up a leader.
Perhaps its time for a centralized theft registry.
Yes, this will reduce the pseudo-anonymity but it can be done.
Here's one possible way for bitcoin-wallet services to handle things, but it's off-the-cuff so it's probably buggy:
Executive summary:
Through the use of multiple wallets and a central registry of "stolen bitcoins," a wallet service's customers can put money they don't need immediately in "vaults." Unauthorized "withdrawals" from the vault will be refused by the software and will never make it into the block-chain, thereby providing some protection to the funds and deterring wholesale theft from bitcoin-wallet services.
Details:
Give account-holders two "wallets" - a "pocket money wallet" and a "vault wallet" - and create a third wallet - a "holding wallet" - that is controlled only by the wallet service.
Wallet #1 is the "pocket money" wallet. It has no additional protections. It's used for "petty cash" and for money that will be needed in the next day or two.
Wallet #2 is the customer's "vault wallet." For certain customers with few incoming transactions, this "vault wallet" will be stored "offline" and only moved online temporarily when the customer tells the wallet service there will be an incoming transaction soon.
Wallet #3 is the "holding wallet" for Wallet #2. There may be more than one such "holding wallet."
The "vault wallets" are registered in bulk by the bitcoin-wallet services with a central authority. Only certain transactions are allowed "out" of these vault wallets. All other transactions will be refused by the software - they will never make it into the block-chain.
If an exchange is compromised, all of its "vault wallets" are considered compromised until the exchange indicates they are not. Transactions indicating withdrawals from these "vault wallets" during the time of the compromised are refused by the software - they will never make it into the block-chain.
The registration is nothing more than
* some identifier belonging to the wallet service, to ensure that the registration information isn't tampered with later
* the identifier of the "vault wallet"
* the identifier of one or more "holding wallets."
* for each "holding wallet," a minimum time between each transaction. This will usually be at least a day.
* each "holding wallet" will typically be automatically dumped into the customer's "pocket money wallet" when the time expires.
* at the wallet-service's option, additional obfuscation may happen after the money leaves the holding wallet and enters the customer's "pocket money wallet." For example, the money leaving the customer's "holding wallet" may be dumped into "bank's temporary wallet #1" and an equal amount transferred from "bank's temporary wallet #2" into the customer's "pocket money wallet" shortly thereafter.
* at the wallet-service's option, the "holding wallets" may be part of an obfuscation scheme. For example, they may be randomly re-used across customers, or they may be designed as one-time-use wallets.
* a time-delay for any registration information changes other than marking wallets as compromised.
The idea is that the "pocket money" wallet is just as vulnerable as ever, but it will rarely have most of a customer's coins in it.
The "holding wallet" has some vulnerabilities but it will be empty most of the time and thanks to the "time lock" it's unlikely that all or even most "holding wallets" at a given will be able to be stolen at the same time.
The "vault wallets" are protected enough to make the immediate reward of "raiding" an exchange much lower than it is today. There will still be theft, but the number of people interested in stealing from exchanges will go down and the risk of loss from a given theft will go down.
Trade-offs:
* This is not a complete solution.
* There are probably anonymity issues I haven't considered.
* There are new denial-of-service issues introduced by this system. I can see the possibility of a
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
I did business with this small local Bank, because I'm a small local business man and I like to support the smaller guys. They treat me right have good service, seems good. Was banking with them for almost a decade. One month like any other month I deposited $9000 from my business. I always got a receipt, I didn't get one that day. At first I was going to go back and get it, but I figured I trust them, they haven't shown any reason to treat me wrong. Well.... turns out when I went to check my bank statement my $9000 was not deposited. I talked to the Bank asking where did my money go? They asked for the receipt, I said I didn't have it. Then they said then you have no proof. I said, well *insert employee name* took my deposit, he can verify it. Bank says "oh that employee no longer works here." Then I said, fine I'll see you in court. I took them to court, they were forced to show the security footage of me making the deposit. Ohh lucky for the bank, the video has a missing 30 minute gap of when I was f'ing there. Courts said they couldn't do anything. So then I told the them fine, you want me to go to every news agency I know and let them set this shit on fire? Then they finally gave me a portion... only $3000 of the original.
FDIC couldn't do shit for me because "there was no theft" bullshit.
These stories are puzzling me. All bitcoin transactions are public. So you have stolen some bitcoins and then you move them away. Anyone can track it. You move it into 1000 wallets. Anyone can track it. How do you escape ? You can't. You go to some exchange to get another currency, your transaction will be tracked. You buy some goods, anyone can track it. You can claim you are anomymous when using bitcoin, you are not. At some point, your identity will show up.
IMHO the ship has sunk.
How could you contend otherwise? Yes, you may point out that BTC still has X million in currency but for how long? The winds are changing and BTC is *just now* getting on the Fed's radar screen. BTC will devolve back into it's origins as a scam/drug payment method or it will get corporatized to irrelevance.
Thank you Dave Raggett
Nope. I am cackling. Schadenfreude it is for me.
Does this make me a bad person?
That's the sound of the last few nails being driven into the Bitcoin coffin.
I agree. A government doesn't need to sneak through the window when they can just walk through the door. They can pass legislation to ban virtual currency.
However, here in the United States, our fabulous "Do-Nothing" congress has made passing legislation so painful that maybe the government is better off just stealing the coins.
It's a joke of course, but it makes one wonder.
Gee, the currency of choice for potheads and drug dealers isn't stable?
But you get this shiny coin with a nice heft to it... err at least I think you do. All the articles have pictures of these bit coins and they look pretty hefty.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
I don't know a whole lot on the topic, but my understanding of Bitcoins is that every single transaction is traceable by anyone. If Bitcoins are so easily traceable, why steal them? Wouldn't it be possible just to wait and see what you, the thief, buy and thereby track the transaction back to you?
Could this be more likely to be a government-sponsored action? If governments are as bothered by Bitcoins as some people seem to think, this seems like a fairly trivial way to destabilize Bitcoins as a currency: knock over a few Bitcoin-related institutions and undermine confidence in them.
I wonder how much the coins can really be sold for? How much has actually been paid for Bitcoins over the years, sure someone somewhere paid $40 for a Bitcoin, but for the most part people paid much less for the coins they have, if they paid anything at all and didn't mine them. The market seems small enough that you could pump coin price with a bunch of bogus transactions between parties in cahoots, then dump your coins.
So, at what point are people going to lose faith in Bitcoin? With all the recent "collapses" it seems like the actual value would be darned near zero by now.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
See http://bitcoin.stackexchange.com/a/1430
They paid you interest to keep your money with them.
Reduntant vagueness is reduntant... and vague. Note that whatever you think about the rampant abuse of "hackers" as digital boogiemen, it's entirely redundant. The thing is that there's a bunch of coins stolen--fingerpointing to some nebulous anonymous bunch does not in fact add any clarity to the message. Might as well have left it out then.
Compare these fictional headlines:
"Dead victim person murdered by murderer."
"Ransacked house burgled by burglar."
You typically don't see those. Why should the digital realm need to be different?
Shouting sensationalist crap isn't "informing", so as long as the former keeps happening them journo hacks aren't actually doing their supposed job, informing the people. Get to it.
There is merely a business opportunity for someone who properly implements an exchange, uses proper hardening techniques, reduces risks, and insures its users from these sorts of attacks and losses that result. There shouldn't be any reason an exchange can't charge for such services and place said charges into “cold storage” or better yet, a hard currency.
Try trading some sex for some heroin.
And then, steal from their own creation!
I don't know what a hot wallet is either. Its just trendy nonsense to me. Bitcoins sound dumb. Too bad lots of people lost their money over something dumb. Why not just simplify it and make gif files to email around online. Send me 300 little pictures and I'll send you some drugs or whatever. Pay me dollars and I'll email you lots of pictures that you can send people to pay for things. Hopefully nobody gets into my computer and copies then deletes the big hot wallet of pictures I have or the buyer will have nothing to show for the money they spent.
In theory Bitcoin is awesome, in reality it's an extremely risky commodity, the reasons being:
a) Due to it's high cost on the market it will be a heavy target (expect Bitcoin exchanges to drop like flies)
b) Unlike Banks, Bitcoins literally have their asses in the cyber wind
c) It's impossible to recover stolen Bitcoins otherwise Mt. Gox and Flexcoin would be back in business
I really love the idea of Bitcoins, I truely do. It's just too risky to invest into it. I would utmost highly recommend everyone to cashout while Bitcoins are still doing good... give it a few months and that tune may change.
As Sofia Koutsouveli once said, an unregulated currency with problems like the one discussed is still preferable to government currency.
I know people are wondering if these 'hackers', in this case and in other Bitcoin thefts, are in fact inside jobs blamed on ghostly scapegoats (with the goal being riche$). Lately though, I have been considering the possibility they are government entities trying to destabilize the currency and spook its users/potential investors.
Fuck beta, because it is a cunting slut of a second rate piece of shit. Like glass in the dick.
There is not *necessarily* any dichotomy between "bank stability" and regulation.
You are setting up an unprovable narrative and therefore not addressing the real issue here: a crime was committed, and people lost their property.
Every software-driven project attempting to provide a service and
stay 'secure' in the process needs 'lots and lots' of time and money
spent on testing (challenging its weaknesses). Otherwise, it's just
another pyramid scheme concocted by your brother-in-law.
Just think of the manpower amassed to verify the stability of the
systems software of an F-16 or an F-22.
I prefer the stock market to assuage my gambling itch. Just let
me know when and how the capability exists to 'short' the bitcoin.
"To be fair, with autonomous cars, they do not need to be perfect, just more reliable then human drivers."
Let's say I'm a good driver. Let's say I'm now forced to ride in an automated car and you hack it in order to kill me.
The system has just failed me and I was better off before.
They had *doors*?
Not when the real outlaws show up, its like they are having a friendly little school yard fight when the B-52s show up.
"There is no god but allah" - well, they got it half right.
From my reading of the article, the Bitcoin block chain was not affected. The vault is a list of account holders, their Bitcoin keys and names and their bit coin balances. The block chain is not touched until a transfer in or out of an account was made. It was the bank that was broken, not Bitcoin itself.
Yes, a better crypto currency would have a distributed banking system on a peer to peer basis instead of centralized banking like Bitcoin. It is coming (see Coinbase.com). Until then, keep your Bitcoin keys on paper in a a safe at home.
Well, I've been preaching since 1976 that flexcoin was not to be trusted. Their business model was untrustworthy, and besides, the name 'flexcoin' sounds like 'rubber coins', which implies a bounce of some kind. All the 'smart money' (like me) knew about this literally seconds before it happened. I have moved my coins to my 'bitcoin dildo flash device'. Now if anyone wants to steal them, they are going to have to at least buy me dinner first.
I was reading the 1990 college economics textbook by Mcconnell and Brue Chapter 15 Money and Banking and I was puzzled at the elegance and symmetry of the basic money equation. Money created appears as a debt entry on the government's ledgers. Money is defined as a medium of exchange used to convert an activity like labor into something the laborer really wants at a later date, like a bag of groceries. What is missing from that picture?
United States money can't easily be used for certain transactions because the activities are illegal, like illegal drug sales. (The Breaking Bad tv show had the protagonist with a pickup truck load of currency, Too much to count and unspendable in bulk.) United States money payments of wages mostly must be disclosed to the government because most income is subject to income tax. Finally the privilege of performing electronic transfers of United States money is mostly controlled by the banking industry that charges a reported 2% transaction fee for every merchant receiving payment by credit card.
So you can say, United States money is encumbered with constraints by three (or four if you count the terrorist money hunters) powerful interest groups.
So Bitcoin has at least four large US Government constituencies with an institutional interest in preventing the Bitcoin exchange organizations from working.
Having identified the constituencies that want to use Bitcoin, we can estimate the transaction cost each of these constituencies can afford. For illegal drug transactions the markup is 50% so they can afford maybe a 5% bitcoin exchange transaction cost with a second 5% transaction cost on the other end of the exchange. For dodging the typical 2% merchant fee, bitcoin has to work with a net transaction cost less than 1%. For dodging tax on income, I will copy the drug model quoted previously, a typical income tax rate is 25% so bitcoin needs to work with 2.5% to 5% exchange cost.
I was reading the economics textbook trying to figure out why was the esteemed Chairman Greenspan and a large fraction of the American popular and professional economics community blindsided by the 2008 economic meltdown? Why did the Occupy Wallstreet movement fizzle?
I commend to you the same questions. I don't own any bitcoin but I have the feeling that we are bystanders to a new macro economic innovation that has powerful economic patronage both for and against.
Income is income, and sales are sales and disguising them as trades, or monopoly money or bitcoins does not change the fact that they ARE subject to taxes. But the fact that you believe they are not is exactly why governments hate bitcoins, because they make tax fraud very easy. Never mind the other crimes made easier by these.
(If at first you don't succeed, do it different next time!)