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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.'"
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
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.
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.
Liable for what?
If you breeak into an imaginary bank and steal imaginary currency who do you imagine will care?
Well, one issue is how much to the governments actually care? BTC adherents believe they are a huge futuristic threat to the world order and have states quaking in their boots, but as far as I can see, outside worries about money laundering and tax evasion, the various states do not really care all that much.
Control over currency is important, it allows governments to make adjustments based off the needs of the economy, which increases stability. BTC would need to get much, much larger to even make a dent in the overall stability of the economy and THEN states might actually worry, but we are about as close to that as interstellar travel.
Ah, but it's in the terms of service. And those have been upheld by the courts.
Which means people who lost money in this are out of luck, because all they really claim is they'll do their best effort but otherwise make no guarantees about their ability to do anything.
In other words, there's zero basis on which to trust them, it's spelled out in the license, and if you trusted them and lost it's caveat emptor.
You might as well ask the wino on the corner to hold onto your money, because he's about as accountable if your money goes missing.
Lost at C:>. Found at C.
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.
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
Why are you assuming the ones who created Stuxnet *aren't* criminals. Government backing does not an honest man make.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
You think "governmental actors" care about $615,000? That's adorable.
Did those "governmental actors" prevent Mt. Gox from ever auditing their accounts? It's been obvious for a year that Gox was amateur hour. Or was that part of the elaborate conspiracy?
Because currently Bitcoin is small potatoes, and the exchanges are so far doing some of the work for them, and because if there's money to be had criminals will go after it.
Keep in mind that private currencies undermine government monopolies. Governments back 99.999% of the currencies out there. Bitcoin had no such backstop, was getting popular, and was considered a 'threat' because it had no government behind it. I've read quite a few anti-Bitcoin raves by government spokespeople, mostly decrying it because it's outside of their system and thus not subject to taxes.
Is it possible this is some grand conspiracy? Sure it is. Is it more likely that the people running these things have failed at security and actually been ripped off? Sure. Is it also possible that the exchanges are really just scams and these were inside jobs? Sure.
I just don't see the need to assume governments undermining the credibility of these -- it seems to be happening just fine without the need for government help on that front.
I'm reminded of the old bumper sticker that said "Don't steal. The government hates competition". Governments hiring hackers after they've been convicted of cybercrimes is common. Could it be a case of criminals in a government being behind this? Likely, governments have the most to gain if private currencies fall.
Understanding the scope of the problem is the first step on the path to true panic.
As I said, small potatoes. The magnitude of bitcoin isn't enough to really concern most governments, and certainly not the ones with the resources to do what you suggest.
Sure. Could it be alien space monkeys trying to destabilize our currencies and use us for slaves to harvest tasty bananas? Sure, I guess
There's about as much evidence for either of those, which means there's zero evidence at all.
I generally tend to fall a little on the tinfoil-hat end of the spectrum -- but in the absence of evidence, I fall back to "Never attribute to malice that which is adequately explained by stupidity."
You're well into just claiming it could be a conspiracy, but I just don't see the need. It could be if you want to be paranoid enough. But there's nothing real to suggest it's true, which makes it just pure imagination for the moment.
Lost at C:>. Found at C.
The only difference between a cop and a crook is the badge.
“He’s not deformed, he’s just drunk!”
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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 never cease to be amazed how often suckers fall for it, even when you mention the LAST scam in the channel they're advertising in.
Having spoken to number of Bitcoin true believers; their argument basically was "Bitcoin is different. None of the real world rules apply to it. You don't understand." followed by an assertion that they were going to get rich.
Which proves the old maxim that you can never go broke underestimating the stupidity of the public; or as a corollary the gullibility.
I'm a consultant - I convert gibberish into cash-flow.
You think this could only be about money? That's adorable.
This could be about decentralized currencies & their ability to control our money. Considering how much involvement they've had in undermining almost all aspects of the internet recently, I'd bet it was them.
Besides, its very nice and easily to "plant" evidence to keep for a later date.
Or maybe the cypherphunks can't accept the idea that it's most likely they're being attacked by their own kind with the same lack of respect for regulation and disdain for law that they have?
That is really the point here - if you destroy a currency the currency is worthless, so why steal it unless you don't care about the value?
1. Steal currency
2. Convert into another currency
3. Time passes
4. People realise that a theft has occurred
5. Currency devalues
6. Theives don't care because they already cashed out in (2).
http://blog.nexusuk.org
And that's the basic problem. Fools keep giving their bitcoins to anonymous internet people to hold then act all shocked when those anonymous people disappear.
It's like giving a bundle of bank notes to a random stranger to hold for you. Anyone can see that's not going to end well.