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Bitstamp Bitcoin Exchange Suspended Due To "Compromised Wallet"

Posted by samzenpus on from the that-old-familiar-story dept.

twitnutttt writes Customers of Bistamp, the successor (until recently) to MtGox as the highest-volume dollar-denominated Bitcoin exchange, and still the preferred source of trading data for many technical analysts, sent an email at about 4:00 UTC today warning that, "Today our transaction processing server detected problems with our hot wallet and stopped processing withdrawals." They also instructed users to stop sending any deposits immediately or they may be lost. The Bitstamp website has now also suspended all exchange/trading services, and the homepage contains only a maintenance message warning users of a "compromised" wallet. Numerous references to security imply that this is a hacking attack, but Bitstamp reassures that they maintain "more than enough offline reserves to cover the compromised bitcoins."

161 comments

  1. Soundtrack contest by Sarten-X · · Score: 5, Funny

    I now have "Another One Bites The Dust" in my head.

    Anybody have any better music suggestions appropriate for this story?

    --
    You do not have a moral or legal right to do absolutely anything you want.
    1. Re:Soundtrack contest by H0p313ss · · Score: 0

      Anybody have any better music suggestions appropriate for this story?

      I tend to reference Dylan's Everthing is Broken for most software projects, seems apropos for Bitcoin in general.

      --
      XML is a known as a key material required to create SMD: Software of Mass Destruction
    2. Re:Soundtrack contest by Anonymous Coward · · Score: 0

      Dire Straits, Money for nothing.

    3. Re:Soundtrack contest by msauve · · Score: 1

      I was thinking more of Subterranean Homesick "the pump don't work 'cause the vandals took the handle" Blues.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    4. Re:Soundtrack contest by bobbied · · Score: 1

      "Money" by Pink Floyd....

      --
      "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    5. Re:Soundtrack contest by H0p313ss · · Score: 1

      “How far are y’all going?” Ruby asked us with a sigh
      “We’re going all the way ’til the wheels fall off and burn
      ’Til the sun peels the paint and the seat covers fade and the water moccasin dies”
      Ruby just smiled and said, “Ah, you know some babies never learn”

      --
      XML is a known as a key material required to create SMD: Software of Mass Destruction
    6. Re:Soundtrack contest by Anonymous Coward · · Score: 0

      I like Franz Ferdinand's song "The Fallen" for the first couplet:
      Some say you're trouble, boy
      Just because you like to destroy
      All the things that bring the idiots joy
      Well, what's wrong with a little destruction?

    7. Re: Soundtrack contest by nologin · · Score: 1

      Well, the one you should be listening to is "The Who - Won't Get Fooled Again". CSI Miami's theme song is awesome and only Lt. Horatio Caine can only deliver the line, "You have no idea..."

      Yeah!

    8. Re:Soundtrack contest by BlackHawk-666 · · Score: 1

      Piece of Crap by Neil Young.

      https://www.youtube.com/watch?...

      --
      All those moments will be lost in time, like tears in rain.
    9. Re:Soundtrack contest by sound+vision · · Score: 1

      I wouldn't call it "biting the dust" yet. If the summary is correct, one wallet used as an intermediate to their offline storage was compromised, and Bitstamp has enough assets to replace the missing coins and continue operating. It's like Wal-Mart having one of their cash registers robbed.

      Granted that's a pretty big "if", but it's the way they SHOULD be operating, especially after MtGox. If the site is still down a week or two later with nothing but empty platitudes from the operators, then you can call it as a MtGox.

    10. Re:Soundtrack contest by sound+vision · · Score: 1

      Then where are the chicks?

    11. Re:Soundtrack contest by TuxWithoutPants · · Score: 1

      Queen - Play The Game

  2. I can't tell you how relieved I am. by fuzzyfuzzyfungus · · Score: 5, Funny

    It's a terrible sign of the times that this is so; but it's so goddamn heartwarming to see that we at least have some financial institutions around that aren't too big to fail...

  3. Somehow banks... by TWX · · Score: 3, Insightful

    ...with the regulations in place that generally put limits on their bad behavior, aren't looking so bad now, are they?

    And for those who want to go off on overdraft fees, you can have your account set to simply not let you go overdraft. It'll deny any transactions that would let you overdraft though, so it's a catch-22.

    I have no love for big banks, but at least there are rules governing how my accounts are handled, they can't brazenly steal all my money in one swoop.

    --
    Do not look into laser with remaining eye.
    1. Re:Somehow banks... by Anon-Admin · · Score: 3, Insightful

      Right, regulations help.

      Back some years ago I was using a bank that over drafted me. I say they over drafted me because they showed an ATM withdraw some 50 miles from where I was that caused my account to over draft.

      I had paid the overdraft fees and explained to them that I could not have been there to withdraw the $62 they claim. The lady tells me that as per bank policy I am responsible for the first $50 lost from the account and there would be a $10 "search" fee for them to research what had happened and determine if I had withdrawn the money or it was a bank error. My simple question, "If it turns out to be a bank error do i get my $52 back?" Well no, as per policy I was responsible for the first $50 lost so I would only get $2 back.

      I told them to do the research, give me my $2 and close my account. The bank persons response, "Absolutely, there is a $2 filing fee to start the search, $10 for the search, and you are responsible for the first $50 lost. Then there will be a $15 fee to close out your account."

      It amazes me how they lost the exact amount that it would require to $0 out. I close that account and simply moved of. The moral of this story is you may have faith in religion, with all others watch your ass because they will take all they can get.

    2. Re: Somehow banks... by Anonymous Coward · · Score: 3, Informative

      The solution isn't regulation.

      The solution is innovation.

      These 1st generation exchanges don't use multiparty keys. So they have to keep all the bitcoins on hand. This makes them big fat targets.

      Gen 2 exchanges will be decentralized and use m of n keys to protect the funds and simultaneously NOT hold the funds on hand themselves.

      Very smart people are already working on this problem.

      The LAST thing we need is red tape screwing up the innovation economy.

      Decentralized exchanged already exist in one form or another. They just aren't as popular.

    3. Re: Somehow banks... by Anonymous Coward · · Score: 0

      'Very smart people'. Great. At least we know they are 'very smart' and thus incapable of mistakes.

    4. Re:Somehow banks... by msauve · · Score: 2

      That's nothing. They wanted a fee to close an account, so I just planned to run it close to 0 and let it sit. They'd eventually figure out that mailing monthly statements was costing them money, and close it on their own. So, I used a debit card, but accidentally tried to pay a bit more than was in the account (by $1 or $2). That kicked off some fee (not overdraft, since they declined the transaction), which they promptly took out of the account, making it overdrawn. So, they could overdraw the account, even if I couldn't. Then, they started charging a daily overdraft fee on the account. About a month later, they complained that I somehow owed them hundreds of dollars for the overdraft they themselves created. That was the first notice I received that they were charging me a daily fee. They never got their money.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    5. Re:Somehow banks... by Anonymous Coward · · Score: 0

      Or you could just manage your money better.

      It's been well over a decade since the last overdraft fee I've had to pay. Or, really, any bank fee other than credit card interest, which is kept at a bare minimum by not carrying a balance on the card of any significance.

    6. Re:Somehow banks... by IamTheRealMike · · Score: 1

      If Bitstamp did get hacked, then what regulation do you have in mind? "Don't get hacked" is not something you really need a regulation for.

      Maybe you meant regulations in general that make it hard for new/small companies to handle money. Assuming there's a correlation between bigness and competence is ...... optimistic.

      I think the main reason we don't see this happening so much in the banking space is that banks will work together to reverse transactions when possible, and all accounts are ID verified, whereas the Bitcoin community doesn't do that.

    7. Re: Somehow banks... by jellomizer · · Score: 3, Insightful

      Innovation like being able to have low interests on a high risk loan. By selling fractions of that loan across many organizations so the liability of any one loan isn't so great.

      This seemed like a good idea at the time. The person getting the loan can get a low interest payment, the person who is selling the loan can get the commission for the loan, the sub prime lenders make out as they get for the most part their money back....
      Just as long as the economy doesn't sink, and those high risk individuals start dropping out in droves. Meaning you have a lot of assets in high risk loans which are failing.
      Because while the risk was reduced for the individual purchase, the risk was increased over the aggregate.

      Now during the boom time, this was seen by most people as a good thing. They were worrying about the housing market to pop, but not on the fact the lenders were loading up on high risk loans. Because as most people saw it. That these people can get low interest rates for homes, thus improving the number of home owners that can build wealth over time.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    8. Re:Somehow banks... by Anon-Admin · · Score: 2

      Say hello to ChexSystems

      https://www.consumerdebit.com/...

      Unlike credit reporting there is no time limit on it and banks will refuse to issue you an account based on the information. I know because the bank that I closed the account on charged me an account fee after the account was close. I was never notified so did not know it was there. Some years later (10) when trying to change banks I was declined because that was in the chexsystems report. The original bank had gone bust, been sold to another bank that went bust and was sold to another bank that later split into three banks. It took me 2 months to track down who had the original records and could clear the entry on the chexsystems report.

    9. Re:Somehow banks... by TWX · · Score: 1

      Pretty much. Not trying to spend money that one cannot make good on or doesn't have is the best way to avoid debt problems. And an overdraft fee is a form of a debt problem.

      --
      Do not look into laser with remaining eye.
    10. Re:Somehow banks... by Anonymous Coward · · Score: 0

      The moral of this story is you may have faith in religion

      Only in the religion itself, not the people. They will also screw you over, given the opportunity.

    11. Re:Somehow banks... by Anonymous Coward · · Score: 0

      Except this is *not* a *bank*; but rather an *exchange*

      *Banks* storing Bitcoin would be subject to the exact same laws as any other *bank*.
      *Exchanges* storing bitcoins would be subject to the exact same laws any other *exchange*.

      Do you see the difference?

      Nice try spreading your jealousy and hate. Too bad you missed out on all this money us bitcoin people are enjoying.

    12. Re:Somehow banks... by msauve · · Score: 1

      Doesn't matter. The account was not a personal one, but for a small business which no longer exists. There's not even a rock to try and squeeze blood from.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    13. Re:Somehow banks... by Anonymous Coward · · Score: 0

      They're called Credit Unions. Find one that's linked into one of the nationwide co-ops so you can have a shared branch nearly everywhere there's a Wells Fargo or Chase. They have plenty of regulations and are much more customer oriented than either Bitcoin or Banks. Even better is that you're generally an owner when you open an account and have voting rights.

    14. Re: Somehow banks... by FhnuZoag · · Score: 1

      Very smart people are working on how to crack any technical security measure you might come up with.

    15. Re:Somehow banks... by Anonymous Coward · · Score: 0

      you open a business account with your information. which gets applied to chexsystems.

      happened to me.

    16. Re:Somehow banks... by iggymanz · · Score: 1

      yes, they can in fact steal all your money in one swoop, if your account is inactive for a period of time. Those vipers with lawmakers in their pockets give themselves a license to steal.

    17. Re:Somehow banks... by bws111 · · Score: 1

      Not in the US. Unclaimed money from dormant accounts is transferred to the state. You can reclaim it from the state.

    18. Re:Somehow banks... by Anonymous Coward · · Score: 0

      It'll deny any transactions that would let you overdraft though, so it's a catch-22.

      It might be something, but it is surely not an instance of Catch-22.

    19. Re:Somehow banks... by Anonymous Coward · · Score: 0

      in the early 2000s there was a big stink in California that banks were charging double overdraft (really, it was recursive overdraft). And legislation was put in place to prevent some of that abuse. I was charged because I had two accounts with a bank, where instead of overdraft/NSA they would pull money out of my savings. This ended up being an additional transaction. So if both checking and savings was empty and I tried to process a debit card transaction. 1. savings account would be charged a $40 fee for overdraft. 2. checking would be charged as $15 failed transaction fee because the savings account could not provide the necessary funds 3. the original checking overdraft would occur and I'd be charged $40.

      Bank would make $95 to basically tell the kiosk in front of me not to authorize a transaction.

      Even 95 cents is too high for this simple service.

      ps - don't get me started having an out of network ATMs charge me $2.95 at the terminal, then my bank charge either $3/per or $5/month (each bank has different policies). I've started carrying larger amounts of cash around so I'm not getting ripped off by silly fees.

    20. Re:Somehow banks... by tlhIngan · · Score: 1

      If Bitstamp did get hacked, then what regulation do you have in mind? "Don't get hacked" is not something you really need a regulation for.

      Maybe you meant regulations in general that make it hard for new/small companies to handle money. Assuming there's a correlation between bigness and competence is ...... optimistic.

      I think the main reason we don't see this happening so much in the banking space is that banks will work together to reverse transactions when possible, and all accounts are ID verified, whereas the Bitcoin community doesn't do that.

      How about regulations like "don't be stupid when handling other people's money"?

      Perhaps proper accounting and transacting systems - a simple MySQL backed PHP web site is not sufficient to run an exchange, with proper failover and all that?

      The typical transaction generates so much paper trails that if any part of the system does fail, you can see where the money got hung up. It might take a while since you need to correlate tons of records, but it's there.

      It's called double entry - for every transaction, two entries are made in the ledger - one showing an account that got debited, another showing the account that got credited, and if one of those entries is not there, well, there's the money.

      And why is an exchange using the same wallet all the time? Surely that's banking with bitcoin 101 - you can create a wallet anytime, so why not create wallets for each transaction then discard them when it was complete? Rather than have one master wallet that can be compromised?

      Of course, the problem is all this book-keeping creates a paper trail, which probably goes against the whole bitcoin concept.

    21. Re:Somehow banks... by TWX · · Score: 1

      It's a Catch-22 for those whose finances are in such a poor state that they must go overdraft in order to remain solvent to those to whom they owe money, because either they continue to owe those people money (ie, no overdraft option) or they owe the bank extra money that they obviously don't have (using an overdraft option).

      Their owing money they don't have, in either case, is a Catch-22.

      --
      Do not look into laser with remaining eye.
    22. Re:Somehow banks... by allfieldsrequired · · Score: 1

      Say that to the Cypriots. Many people don't know that at one point, everybody stood to lose *all* their money. Regular people as well as businesses. The deposit guarantee scheme was shown to be useless vapor. Bitcoin might be a poor store for value, but right now I am seeing that banks and their related financial instruments such as insurances and pensions are just as bad.

    23. Re: Somehow banks... by Anonymous Coward · · Score: 0

      'Very smart people'. Great. At least we know they are 'very smart' and thus incapable of mistakes.

      It appears that "These 1st generation exchanges" were designed by the people who were "smart", but not by the "very smart".

    24. Re:Somehow banks... by TWX · · Score: 1

      When has the deposit-guarantee scheme shown to be useless vapor?

      I've heard of numerous examples of over-leveraged, ready-to-fail banks that were taken over by the FDIC and merged into other banks to protect depositors' accounts. That's the typical operating format of the FDIC, force mergers and inject the minimal cash needed to make it function, usually over a long weekend so that the depositor sees little if any funds inaccessibility. I have never heard of an FDIC or NCUA-regulated bank closing and leaving regular account depositors high and dry since those entities were founded.

      If you have counter-examples in the United States, then by all means, please share.

      --
      Do not look into laser with remaining eye.
    25. Re:Somehow banks... by Anonymous Coward · · Score: 0

      Maybe they should make hacking illegal...

  4. Utterly predictable by jareth-0205 · · Score: 2, Insightful

    So who still thinks Bitcoin is a usable practical idea?

    1. Re:Utterly predictable by fraxinus-tree · · Score: 1

      Me. We had a few bank runs here. Cash is not practical. No technology is perfect.

    2. Re:Utterly predictable by Anonymous Coward · · Score: 0

      Cash may not always be practical, but Bitcoin isn't the answer.

    3. Re:Utterly predictable by jareth-0205 · · Score: 3, Insightful

      With the massive caveat that real money banks are backed and insured at the state-level (atleast in Europe, where most governments guarantee a certain amount of savings), while who the hell knows how well these websites are capitalised and secured.

    4. Re:Utterly predictable by slashdice · · Score: 2

      Cash is not practical? Damn, why have we been using it for the past 2,700 years?

      --
      Copyright (c) 1990 - 2014 Dice. All rights reserved. Use of this comment is subject to certain Terms and Conditions.
    5. Re:Utterly predictable by IamTheRealMike · · Score: 1

      The point of Bitcoin is you don't need to put your money on deposit with someone else.

      Lots of day traders and people who want to hold bitcoin for speculative purposes, but not actually use it, choose not to do this and keep their money at an exchange. But are they really Bitcoin users at that point? Or are they banking users who happen to have a BTC denominated account?

    6. Re:Utterly predictable by Anonymous Coward · · Score: 0

      Because it is illegal not to accept it.

    7. Re:Utterly predictable by Anonymous Coward · · Score: 0

      BTC Shills, the useful idots? Other advocates are just scammers..

    8. Re:Utterly predictable by Oligonicella · · Score: 1

      Bullshit. It's not illegal to not accept it. You can also barter.

    9. Re:Utterly predictable by MarkvW · · Score: 1

      People who ceaselessly pump Bitcoin on the Internet think it's a good idea. An ever increasing pool of suckers helps them make money.

    10. Re:Utterly predictable by fraxinus-tree · · Score: 1

      It is not practical for _everything_. Then again, cash is just as vulnerable to theft, inflation, loss or destruction.

    11. Re:Utterly predictable by Archangel+Michael · · Score: 1

      Backed and Insured are the result of banks failing previously. In the end, the tax payers are liable for bank failures (see the last 8 years or so), and banks still fail. The fact that you're not seeing the direct results of those failures personally, doesn't mean they aren't happening.

      The only thing different between BitCoin failures and Bank failures is that the end users is insulated from their choice in banking systems, and not so much in BitCoin systems.

      IMHO the "legitimate" banking systems are more prone to risky behavior at some level simply because they are insured. Thus the collapse of the sub prime lenders. The whole thing was fraud from the beginning dressed up as legitimate banking practices.

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    12. Re:Utterly predictable by Anonymous Coward · · Score: 0

      Nothing can ever be "the" answer. But there's no reason why Bitcoin (or something like it) can't be an answer.

    13. Re:Utterly predictable by Anonymous Coward · · Score: 0

      Plastic cards with public-keys (only) are the answer. Let's make them the size of business cards. And let's give the issuer monopoly on the market and let's allow him to extract insane fees from everyone in the entire world.

    14. Re:Utterly predictable by BitcoinBenny · · Score: 1

      Ever heard of throwing the baby out with the bathwater?

      Seriously bitcoin exchange run by a few guys in slovenia != Bitcoin.

    15. Re:Utterly predictable by Anonymous Coward · · Score: 0

      I suppose you're right. If you are willing to fully forgive any debt, you do not have to accept cash. Quite the Hobson's choice you've presented.

      However, if you barter, you still have to accept cash or simply give your stuff away assuming you're the one waiting on payment (ie: I'll give you 50 bushels of corn if you give me a calf next month--you can absolutely be forced to not receive payment for the hay OR accept cash, your choice of only those two, assuming you already started the transaction--even if the hay is sitting out in the open on your neighbours property, the court won't make the deadbeat return it to you). If you haven't handed the goods over yet, you don't have to accept cash or give your stuff away because you can simply refuse to sell anything. If you don't believe me, try reading what's written on paper money someday.

      Ever rented a car? What if you decided to keep it? You could be charged with theft, but if you hide it well enough, you will NEVER be required to go out and buy the rental company a replacement car, even though that's what they'd want. Instead, the rental company will have a choice: Accept cash from you, or do without.

      I've not met many who want to give all their stuff away, or not participate in the economy, though.

    16. Re:Utterly predictable by jareth-0205 · · Score: 1

      I think it depends *where* you insure. Like insuring consumer deposits is a good idea because you personally losing all your money to a collapsing bank is catastrophic for you, and it's not like banks would act irresponsibly because they know their *customers* were safe, like they care about their customers. Insuring the entire organisation, which is what we effectively got with TooBigToFail, does make them irresponsible yes because then the existence of the bank itself that employs the people that might act recklessly, is at risk.

    17. Re:Utterly predictable by Anonymous Coward · · Score: 0

      Some webserver got hacked - who here still thinks HTTP is a practical idea?

      Someone got robbed - who here still thins cash, jewelry are a practical idea?

      Someone's bank account was closed down and he had to bail out banks "too big to fail"...

    18. Re:Utterly predictable by Anonymous Coward · · Score: 0

      It's been illegal not to accept cash for 2,700 years?
      Where do you live?

    19. Re:Utterly predictable by Anonymous Coward · · Score: 0, Interesting

      You're operating on the common - and utterly wrong - assumption that every purchase and transaction automatically creates a "debt".

      You can, in fact, run a business that does not accept cash.

    20. Re:Utterly predictable by Anonymous Coward · · Score: 1

      >You can, in fact, run a business that does not accept cash.

      Absolutely. If you would care to re-read the post, I did mention "If you haven't handed the goods over yet, you don't have to accept cash or give your stuff away because you can simply refuse to sell anything."

      While this works on the small scale (getting your groceries and gas), it is utterly useless on even the mid scale. For example, I got to replace my furnace. Like most people, I don't have $3000 worth of gold (or whatever other barter goods) lying around, and I sure as heck won't be handing that over before I they install it. Likewise, that company isn't going to sell me a furnace if they can't be certain they'll get some form of payment out of me.

      Now, you tell me, understanding that my situation is the norm (not keeping thousands of dollars of barter goods lying around) tell me what the situation will be for the furnace installer when he tells me "I'll install this furnace for 300 chickens" and I tell him "Sounds great, I'll pay you once it's done". And then I refuse to give him 300 chickens, but instead hand him cash.

      Go ahead, tell me what happens. I can give you my version. The furnace installer calls the cops, they tell him it's a civil matter and WTF is he calling them for, he's been paid. He tries to remove the furnace but I tell him to GTFO and call the cops for trespass. The cops remove him. He sues me. I show the court all the money I was trying to hand him and how it would buy 300 chickens tonight if that's what he wants. The court says (nicely) "WTF, this is a waste of time. Take his cash and hell no you're not getting him to pay you court fees, idiot".

      Now we've established that only minor immediate transactions can require payment in barter goods (due to the ability for the retailer to refuse service), we have established that payment for anything major will either require a large amount of trust as payment has to be made prior to the transaction/work completing (and most of us understand that is just not going to happen) or it will require the acceptance of the only payment that is enforced (cash). As long as anything more serious than buying this week's groceries is likely to be handled in a deposit/work/pay after completion fashion, cash is defacto illegal not to accept, since major transactions require cash payments.

      Furthermore, compensation payments when someone steals something are enforced in cash. So, once again, if you're robbed, you're going to end up with cash if the robber pays you for your stuff.

      So, yes, your edge cases prove you can force a Hobson's choice (remember how I mentioned that?) regarding non-cash payment if we're buying a lollipop. Good job. How convincing. Get back to me when you try to find a car salesman, realtor, or hell, even contractor who is actually successful in forcing non-cash payments consistently.

    21. Re:Utterly predictable by jareth-0205 · · Score: 1

      Because it is illegal not to accept it.

      Only if you have someone else in your debt. If there's no debt (ie buying an object in a shop) then they can accept or decline whatever form of payment they want. (in the UK atleast)

    22. Re:Utterly predictable by Anonymous Coward · · Score: 0

      Bullshit. It's not illegal to not accept it. You can also barter.

      It depends. In the USA, anyone can refuse to accept US currency for the exchange of goods. However, in the USA, it is illegal to refuse to accept US currency for the payment of a debt. It can get complicated. If goods are delivered with expectation of payment at some later date, then that is a debt and legal tender must be accepted. If payment is expected to be delivered at the same time as the transaction for goods is made, then that is not a debt and payment can be required in any form, for example, barter or foreign currency. But in that case the purchaser can just walk away. http://www.treasury.gov/resour...

    23. Re:Utterly predictable by Archangel+Michael · · Score: 1

      TooBigToFail is a new problem. Because for Captialism to work properly, the people holding the stock of the companies that are failing need to feel the pain. The fact that TooBigToFail doesn't hurt anyone but tax payers, most of whom don't have any interest in those things failing (i.e. Middle Class). Yes, bank failures hurt, they hurt some, they hurt everyone, they hurt. The problem is, they don't hurt the right people at the right time. Risk avoidance is no longer even a consideration, which is how we got the Sub Prime problem in the first place .."It's insured, not big deal!"

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    24. Re:Utterly predictable by CaptainDork · · Score: 1

      A 5 million dollar theft is a reason why BTC can't be an answer.

      --
      It little behooves the best of us to comment on the rest of us.
    25. Re:Utterly predictable by CaptainDork · · Score: 1

      They are out $5,000,000 according to TFS.

      --
      It little behooves the best of us to comment on the rest of us.
  5. Somehow regulators... by fraxinus-tree · · Score: 2

    ...generally make everyone think that they do some good. And banks still fail - with all of your money, sometimes. If they don't it is not because of regulations. It is just because they have better return this way.

  6. Bitcoin still seems sleazy to me by NotDrWho · · Score: 1

    I *want* to be open-minded to the idea. But most of these bitcoin exchanges strike me to be about as legit as that skeevy guy on the corner selling "legitimate" copies of movies (that are still in theaters) on DVD for $5

    --
    SJW's don't eliminate discrimination. They just expropriate it for themselves.
    1. Re:Bitcoin still seems sleazy to me by gstoddart · · Score: 3, Informative

      The entire notion of bitcoin has always seemed a little sketchy to me.

      We're going to make up a money, and we're going to simultaneously claim it's secure and private, but we'll attach every transaction to the history of the money -- and then put it in the hands of any old schmuck who makes a website.

      We'll claim to be an awesome alternative to government issued money, free of regulations and taxation, but we'll still try to be honest players (we promise). And a fucking pony.

      The whole ecosystem seems like a pipe dream, which completely ignored reality, and has been subject to fraud and abuse for pretty much as long as I've been aware of it. FAR worse than the 'real' financial system.

      So, whine all you like about the tyranny of government issued money ... you mostly sound insane, and have gotten into an overhyped, and apparently completely insecure currency.

      The first time I heard of BitCoin I thought "what the heck is this for?". And pretty much every time I've heard it since, I've found myself thinking it sounds pretty sketchy.

      I'm sure people will rabidly defend it, for whatever reasons they have ... but, seriously, every time I hear about BitCoin it's because it's not living up to any of the expectations, and you're putting your money into a completely unregulated pool with dodgy players.

      So, I'm afraid I continue to be underwhelmed by the existence of Bit Coin, and mostly keep laughing my ass off when people lose their shirts.

      Don't believe the hype.

      Me, I'll stick with my bank, which operates under identifiable laws, using currency for which there is at least a pretense for the valuation and exchange rates, and involving players with many more years of proven ability to actually play this game.

      But, hey, feel free to put your money wherever the hell you like.

      --
      Lost at C:>. Found at C.
    2. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      Again...Bitcoin EXCHANGES are not BITCOIN. Bitcoin isn't sketchy, but the exchanges sound sketchy to me.

    3. Re:Bitcoin still seems sleazy to me by timholman · · Score: 2

      The entire notion of bitcoin has always seemed a little sketchy to me.

      Not just sketchy, but pointless (at least to the average consumer).

      What sane person would use a debit card that mandates irreversible transactions if you are cheated by a merchant, makes you liable for all fraudulent use of the card, and takes several minutes for a purchase to be validated? Because that's basically what Bitcoin is. It's like stepping 50 years into the past, into a world without consumer protection laws.

      If you were an early adopter of BTC, obviously you have a huge incentive to push for wider adoption, as this lets you turn your CPU-mined BTC into free money. But if you are someone who has never touched BTC in your life, you have no incentive to buy them now, and none to use them. It doesn't matter how many merchants accept BTC, because the average shopper would be insane to use them.

      Regardless of what happens to the exchanges, BTC has hit a brick wall in adoption. Read about the experiences of merchants in Florida who signed up to accept BTC prior to the Bitcoin Bowl. Several of them stopped accepting BTC when it became apparent that no one was spending them.

    4. Re:Bitcoin still seems sleazy to me by gstoddart · · Score: 1, Insightful

      Again...Bitcoin EXCHANGES are not BITCOIN. Bitcoin isn't sketchy, but the exchanges sound sketchy to me.

      Blah blah blah ... the whole fscking ecosystem of Bitcoin sounds like it's based on wishful thinking.

      There is no damned spoon.

      From all of the articles I've seen about BitCoin over the last 12-16 months ... I conclude the whole thing is a shaky mess which will never actually live up claims.

      I have yet to see the "BitCoin fails to suck" headline. It's hard not to conclude the entire premise isn't flawed.

      --
      Lost at C:>. Found at C.
    5. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      But without the exchanges (or even a person to exchange directly for you), you can't convert bitcoin into real money, thus, bitcoin would be 100% WORTHLESS without being able to be converted into real money somehow.

    6. Re:Bitcoin still seems sleazy to me by DarkOx · · Score: 1

      What sane person would use a debit card that mandates irreversible transactions

      Anyone otherwise willing to use cash I guess.

      if you are cheated by a merchant, makes you liable for all fraudulent use of the card

      You are not liable, any more liable than you are with cash, getting your bitcoin back will be at least as difficult as getting your cash back would be. You will have to file some kind civil claim and convince a judge or possibly jury the other party did not honor their part the transaction contract and you require some kind of redress.

      and takes several minutes for a purchase to be validated?

      Well yea, that is the trade off, I could easily carry a USB stick or whatever with the equivalent value of $250K in btc and go buy a house or something. Its inconvenient to walk around with that much cash. Still sever minutes is much faster than the several days a check would require to clear.

      Because that's basically what Bitcoin is. It's like stepping 50 years into the past, into a world without consumer protection laws.

      You'd better get used to it. Between the changes with chip-and-pin and ideas like CurrentC, the powers that be are pretty determined to strip those protections away from you anyway.

      --
      Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
    7. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 1

      Please learn how to properly use UL and LI tags... that is unreadable.

    8. Re:Bitcoin still seems sleazy to me by Comrade+Ogilvy · · Score: 1

      An exchange (or some kind of moral equivalent) is a logical necessity to have sufficient liquidity for bitcoin to be a currency for normal grownups. Mind you, failing to accomplish such does not necessarily mean that bitcoin is not a "success" by some rational definition, only that it is not really "money".

      (FYI: I would bet a large amount of money that MtGox will eventually prove to be an inside job.)

    9. Re:Bitcoin still seems sleazy to me by Comrade+Ogilvy · · Score: 1

      Personally, I think bitcoin will always be pointless to the average consumer, because hyperinflation AND hyperdeflation are the kinds of things that normal people would be wise to avoid. But I can imagine that someone might use bitcoin or similar technology as their secret sauce to back a new kind of normal-ish credit card. If the merchants had to pay, say, 1% off the top instead of 3%, they might be open minded to new technology and new risks...

    10. Re:Bitcoin still seems sleazy to me by BaronAaron · · Score: 1

      BTC is real money.

      If I can't find someone to exchange my USD to EUR, does that make either one worthless? No, because I can still buy goods and services directly with either.

      Just like BTC.

    11. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      You haven't realized that no one is directly accepting bitcoins for payment of goods and services now that silk road is busted... Companies like Overstock.Com are using exchanges to immediately convert bitcoins into good old fiat currency that can be trusted not to change value +/-15% from day to day. *NONE OF THESE COMPANIES ARE KEEPING FUNDS IN BITCOIN*. As soon as all the unregulated hackfest exchanges go under and liquidity dries up there will be no more rubes to unload bitcoins on for real cash. Then your ability to buy goods and services directly will be equal to the liquidity of the currency ... zero.

    12. Re:Bitcoin still seems sleazy to me by timholman · · Score: 1

      You are not liable, any more liable than you are with cash, getting your bitcoin back will be at least as difficult as getting your cash back would be. You will have to file some kind civil claim and convince a judge or possibly jury the other party did not honor their part the transaction contract and you require some kind of redress.

      Which, of course, is why people carry credit cards, because it lets them dispute the charge without going to the effort of filing a lawsuit to get redress.

      Well yea, that is the trade off, I could easily carry a USB stick or whatever with the equivalent value of $250K in btc and go buy a house or something. Its inconvenient to walk around with that much cash. Still sever minutes is much faster than the several days a check would require to clear.

      It's inconvenient and dangerous to walk around with that much cash, which is why we have a banking system. My bank electronically transfers the money to the seller's bank after I sign the paperwork, in the presence of an attorney and licensed agents. It gives me peace of mind, it prevents me from being ripped off, and once I sign, I walk out of the office and I'm done. So exactly what advantage does BTC provide to such a transaction, when it's exactly like carrying a big bundle of cash?

      And I won't even get into the insanity of taking out a home loan in a deflationary economy. You really think that everyone is going to pay for homes and cars in full, without loans?

      You'd better get used to it. Between the changes with chip-and-pin and ideas like CurrentC, the powers that be are pretty determined to strip those protections away from you anyway.

      No one is going to force me to use CurrentC, and chip-and-PIN is intended to reduce credit card fraud, not make me to eat any loss if my account is compromised. On the other hand, I know that a BTC transaction would absolutely force me to eat the loss, because that's exactly how the system is designed to behave.

      You're just dancing around the inconvenient fact that consumers have no incentive to use BTC over credit cards. It's a market for speculators and early adopters who are fervently hoping that someone else will buy their BTC and pump up the price, but no rational consumer (at least in the U.S. or Europe) has any incentive to do so.

    13. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      It's inconvenient and dangerous to walk around with that much cash

      It would be much less so if the FED were permitted to print high denomination banknotes again.

      http://en.wikipedia.org/wiki/L...

      Yes, they were typically only used between banks, but with inflation that $1000 note might come in handy when buying a car.

    14. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      I could see it used instead of wire transfers across national boarders, such as when immigrants send money "back home" to the family.

    15. Re:Bitcoin still seems sleazy to me by sound+vision · · Score: 1

      You're conflating a lot of different people into "we", nobody who understands how Bitcoin works (and certainly not the dude who created it) claimed it was private or untraceable. There are shady people who did try to use that as a selling point, but there's just as many shady people working with dollars or euros.

      As for people "losing their shirts", it's clear by this time that BitCoin is too volatile to invest in or even hold on to for more than a few days. It's used as an intermediate currency. A guy in the US buys some BTC with dollars, then makes a transaction in BTC with a Russian. The Russian exchanges BTC to rubles on his end. Or maybe he uses the BTC to buy a Tesla or a computer from Dell or certain other items that are payable in BTC. Either way, the Bitcoins are "cashed out" at some point, and the smart people do it sooner rather than later. I see the lack of legitimate "cash out" options as being one way Bitcoin might die, but that will be a slow process as the cash-out options are distributed among many different nations, exchanges, and companies.

    16. Re:Bitcoin still seems sleazy to me by allfieldsrequired · · Score: 1

      and chip-and-PIN is intended to reduce credit card fraud, not make me to eat any loss if my account is compromised.

      Chipandpin is designed to protect *the bank* from fraud, and make you eat any and all losses in any kind of account compromise. If you sign a piece of paper to confirm your transaction, you can easily prove it wasn't you that signed for some transaction. On the other hand, in countries where Chip and Pin has been around for a long time, card fraud is rampant, leaves victims destitute and without recourse, and mostly un-, or under reported.

    17. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      There are undoubtedly people who think about Bitcoin the way you portray, but having read quite a lot of the original dev mailing list, I don't think that Bitcoin was really intended to furnish an all-singing, all-dancing solution. Especially people who live in the US have difficulty understanding that it is quite difficult to exchange currency, or make monetary transactions in many places in the world. Government backed cash is great and extremely useful, but what if you live in a society where you can't get a credit card? I've lived in Japan for the better part of this decade. For most of it, it was damn near impossible for the average person to get a credit card. Want to buy something online? There are options, but be prepared to pay up to double digits for them. Things have improved, but I would say that at least half of my friends don't have credit cards. I also need to move money internationally frequently. My bank charges me 7% for that! Luckily, some crazy international banks have moved in recently and there are a few more options, but throwing away 7% of my income to the banks just makes me cry.

      The frustration for people who live in countries like these is that there are basically no options but to hope that the government allows foreign banks to compete in the market. And hope that those foreign banks don't just collude with the non-foreign banks. Banking is a monopoly by law.

      If only there was some way around this incredibly frustrating situation. If only there was some way that I could transfer money without having those bastard monopolistic banks getting their grubby hands in.

      Anyway, I understand that there are many people who can't relate to this reality because they don't experience it. As I said, things have gotten quite a bit better in Japan in the last few years, but I can well understand the potential impetus to create a system like Bitcoin. The thing is... for exchanging currency, or sending money to someone, it works pretty well. I know people who actually rely on it for their pay check! (Strangely they live in a country with very poor banks).

      Having said all that, it's not for me. I still think it is interesting and I'd like to see how far it can go, but I'm happy to watch others take the risk. I actually have something like 44 bit pennies when I was using my computer as a room heater and thought it would be interesting to mine Bitcoins. It wasn't and I stopped fairly soon. My point is that if you take the perspective that Bitcoin is intended to save the world, then of course it is rubbish. But if you just think of it as a way to send money without having to get the banks involved, then it is quite interesting. Of course I have no idea what really prompted Satoshi to work on Bitcoin. The funny thing is that if he really was who he said he was, then building Bitcoin makes a lot of sense. His English seems a lot too good to me to not be a native speaker of English, but who knows. Stranger things have happened.

    18. Re:Bitcoin still seems sleazy to me by BaronAaron · · Score: 1

      Large corporations are risk adverse. They aren't going to hold onto BTC for the reason you said. It's a different story for individuals and small business owners.

      I would personally take BTC for my services (software development), and I'm not alone.

      BTC started as a grassroots concept, and will continue to grow that way. No matter what happens to the exchanges.

    19. Re:Bitcoin still seems sleazy to me by Anonymous Coward · · Score: 0

      Everyone can not get a CC or a paypal account.
      In my case, because of my skin color. Yes, racism is well and alive in som Asian countries.

      Bitcoin sounds like a great idea. With the bonus that it is semi-anonymous, no need to give NSA the log of my purchases.

  7. Soundtrack contest by slashdice · · Score: 1

    Living on a prayer. Oops, I did it again.

    --
    Copyright (c) 1990 - 2014 Dice. All rights reserved. Use of this comment is subject to certain Terms and Conditions.
  8. Bista MP by ZeroNullVoid · · Score: 1

    Watch out for the Bista MP...

  9. amateur by Anonymous Coward · · Score: 0

    fucking amateurs.

    when is this shitstorm of incompetence going to end?

    1. Re:amateur by twitnutttt · · Score: 1

      Amateurs... like JP Morgan?
      Everyone is hackable.

    2. Re:amateur by twitnutttt · · Score: 1

      I should explain what I meant better...
      It may be true that Bitstamp had some security shortcomings. But it is equally plausible they were reasonably or even vigilantly security-conscious.
      The reality these days (as shown by the endless string of high-profile hackings that have occurred in the last year or so) is that anyone is hackable if they are a juicy enough target. JP Morgan comes to mind as an example of a large, regulated, and security-conscious financial services firm that suffered a major hack despite not being "amateurs."

      The truth is that it is harder to maintain an impenetrable fortress than it is to find a small chink in the armor of such a fortress from which a hacker can create a toehold and base an attack. I defer to Bruce Schneier for corroboration on my point:

      Your reaction to the massive hacking of such a prominent company [Sony] will depend on whether you're fluent in information-technology security. If you're not, you're probably wondering how in the world this could happen. If you are, you're aware that this could happen to any company....

      In fact, that Bitstamp detected some anomalous activity and froze the affected wallets while the number of affected bitcoins was well below the reserves they kept in place for any such eventualilty might show they have good security monitoring in place.

  10. Bitcoin still seems sleazy to me by slashdice · · Score: 1

    Don't worry, the tWinklevoss twins are starting a bitcoin ETF. If you can't trust them (and wall street), who can you trust? The Twinkdex(tm) -- which is not an index of twinks -- is based on bitcoin prices at MtGox^W Bitstamp^W uhh, well reputable bitcoin exchanges.

    --
    Copyright (c) 1990 - 2014 Dice. All rights reserved. Use of this comment is subject to certain Terms and Conditions.
  11. Re:Haters gonna hate by MachineShedFred · · Score: 1

    Bitcoin is still the premier form of currency in the world. Anyone who says otherwise is just afraid that it might destroy their own nation's currency and/or economy.

    HAHAHAHAHAHAHAHAHAhaha ha heh. Oh, were you being serious?

    When major developed countries start holding Bitcoin in their currency reserves, and commodities / futures / financial instruments are being traded on the open market in Bitcoin instead of USD, then you can lay claim to being the "premier form of currency in the world."

    Bitcoin isn't even in the top 5. Are you cracked?

    --
    Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
  12. Hierarchical wallets by QuantumReality · · Score: 2

    So how they got their wallets compromised? i mean it's 2015, we have hierarchical deterministic wallets which means you can't steal ANY bitcoins, because even if you have access to the server the only thing you can get is public keys. So we have 2 possibilities: one: they use normal wallets = amateurs, two : whole servers were compromised. No other solution.

    1. Re:Hierarchical wallets by Anonymous Coward · · Score: 0

      Or, more likely, it was an inside job.

  13. No price move by twitnutttt · · Score: 1

    Interestingly, this event has not "moved the needle" on the other exchanges trading Bitcoin.

    1. Re:No price move by QuantumReality · · Score: 1

      If you hack the bank do you see USD go down? It was not bitcoin network compromised. Another thing that is very important to that is the fact that they will refund any loss. That's why there was no price turbulence.

    2. Re:No price move by jeremyp · · Score: 1

      According to http://www.preev.com/ Bitcoin is trading at around 280 USD. Last time I looked a couple of weeks ago, it was at 313 USD. The needle has moved, whether it was this story or not, I don't know.

      --
      All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
    3. Re:No price move by Anonymous Coward · · Score: 0

      Well, if we accept what the article actually says, it's really not much of an event. The compromise - if there even was one - only affected an online "hot" wallet, which contained only a fraction of their reserves, with the bulk still being safely held in an uncompromised cold wallet.

    4. Re:No price move by twitnutttt · · Score: 1

      The failure of the price to drop is interesting if you compare it to the reaction to the MtGox wallet compromise and service freeze last year. It speaks reams about the healthier state of the Bitcoin ecosystem now.

    5. Re:No price move by jeremyp · · Score: 3, Informative

      In fact, according to http://www.coindesk.com/price/ the price has dropped about 15% in two days.

      --
      All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
    6. Re:No price move by Anonymous Coward · · Score: 0

      Here's the one year and one-day charts:

      http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv

      No downward movement yet on this news. A lot of bottom feeders are apparently still snapping up "cheap bitcoins".

    7. Re:No price move by twitnutttt · · Score: 1

      In the 15 minute interval following the freezing of Bitstamp trading, the price on Bitfinex dropped from $276.04 to $271.48 and has remained around there (at this moment at $271.60).
      Neither the volume nor price swing are remotely noteworthy amidst the trading activity over the last week.

    8. Re:No price move by jbssm · · Score: 2

      Actually, Bitcoin took a bit hit 36 hours ago and today you got the news. What this tells you is that insider trading is alive and well in the bitcoin world. Someone already knew of the hack and dumped the market.

      Now expect further dumps just before worst and worst news resurface about this matter... just another typical day in bitcoin.

    9. Re:No price move by twitnutttt · · Score: 1

      could be!

  14. Bitcoin is faulty by nature by jbssm · · Score: 1

    Satoshi might have been a great mathematician/programmer, but he - of course - forgot all the social constrains of a new technology

    It's appalling how bitcoin evangelists still didn't understand the simple issue that makes Bitcoin impossible to work: Bitcoin has zero accountability.

    It doesn't matter how utterly secure you can theoretically make your bitcoins if there is zero punishment for those that try and succeed in stealing them.

    The real world doesn't care about perfectly safe paper wallets that can't be used until you send them to a hot wallet (I mean, are the paper wallets really perfectly safe, are you sure your printer hasn't been hacked with the latest USB vulnerability and someone got your keys?).

    New vulnerabilities are discovered every day, you just can't keep your Bitcoins 100% safe, no matter how mathematically perfect the concept looks on paper.

    1. Re:Bitcoin is faulty by nature by Anonymous Coward · · Score: 0

      Laws still exist for theft, y'know.

    2. Re:Bitcoin is faulty by nature by Dr.+Evil · · Score: 1

      "...of course - forgot all the social constrains of a new technology"

      This has been the biggest cryptocurrency experiment in history. Successful beyond most people's dreams.

    3. Re:Bitcoin is faulty by nature by Anonymous Coward · · Score: 0

      I doubt Satoshi ever thought Bitcoin would get this big.

    4. Re:Bitcoin is faulty by nature by davek · · Score: 0

      > It's appalling how bitcoin evangelists still didn't understand the simple issue that makes Bitcoin impossible to work: Bitcoin has zero accountability.

      Much unlike the systems of government-backed currency, where government employees who commit crime, cronyism, and fraud are always held accountable?

      Bitcoin is a commodity, not a currency. Like gold, it's only worth what people will pay for it.

      --
      6th Street Radio @ddombrowsky
    5. Re:Bitcoin is faulty by nature by BitcoinBenny · · Score: 1

      Actually new vulnerabilities aren't discovered every day.

      A few guys in slovenia with an exchange get hacked, has little to do with the integrity or utility of the Bitcoin system.

    6. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      I meant new vulnerabilities in IT world and general and not in the bitcoin protocol in particular. And yes, they those are discovered everyday.

      Since Bitcoin would be mighty unpractical without any IT infrastructure, then yes, new vulnerabilities are discovered everyday that might have an impact on how you use bitcoin.

    7. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      Bitcoin is a commodity, not a currency.

      Bitcoin was created exactly to be a currency. So, making it a commodity is just your personal take on it.

      Then, systems of government-backed currencies surely don't have zero accountability many people get jailed for stealing, corruption or mismanagement of any kind of government-backed currency. Yet, there are presently zero persons in jail for stealing bitcoin and there will ever by while they are at least slightly intelligent, since bitcoin very nature will always allow for the produce of theft to be easily laundered... unlike government-backed currencies.

    8. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      Please name anyone that is jailed for stealing bitcoin.

    9. Re:Bitcoin is faulty by nature by BitcoinBenny · · Score: 1

      Well, lets take the same statement and apply it to everything then.
      Since online banking would be unpractical without any IT infrastructure, new vulnerabilities are discovered every day that might have an impact on online banking.
      Since credit cards would be unpractical without any IT infrastructure, new vulnerabilities are discovered every day that might have an impact on how you use credit cards.
      Since the international space station would be unpractical without any IT infrastructure, new vulnerabilities are discovered every day that might have an impact on the international space station.

      You have made statement and applied it to Bitcoin in a way that makes Bitcoin look impractical when that statement covers everything on the planet. The reality is that the attack surface of Bitcoin is much smaller than any other payment system in existence. If we have a shot at securing any of them I would bet on Bitcoin.

    10. Re:Bitcoin is faulty by nature by tom229 · · Score: 1

      Bitcoin has problems, but a lack of accountability isn't one of them. You could argue cash has "zero accountability". What stops you from stealing cash? The law. Because the law doesn't care about bitcoin, yet, doesn't mean it never will.

      Bitcoins major problems are two:

      1) Fixed supply ideology. Anything with a fixed supply, when up against the nature of human economics, is deflationary. Bitcoin proponents will aruge that coins are divisible so wages and prices will scale accordingly, but this is an incorrect assumption. If that were true no amount of inflation or deflation would ever be a problem as the market would just auto-adjust. The truth is, targeting a small amount of inflation in a currency is ideal for a lot of good reasons I won't ramble on about. You will never get them to listen on this point anyways.

      2) The 51% problem. The only labor involved in "mining" bitcoins is the creating the integrated circuits that can solve the SHA hash. Because only specialized industries can provide this labor a 51% monopolization of the network is almost a certainty. We can already see ASIC manufacturers getting dangerously close to this today. Bitcoin proponents will argue that ASICs ruined everything. If we could have only kept mining exclusive to general purpose CPU's everything would be fine. What they don't understand, is the problem of specialized labor, being the only labor required to mine a bitcoin. Because of this, whether it's intel, or ghash.io, or AMD, it doesn't matter. Someone is always going to be able to use their specialized labor to monopolize the market. It will never be safe.

      Bitcoin is a great idea. We need something like bitcoin going forward. However, we'll see better success in something like bitcoin2.0 as the current implimentation is just broken from a technical and economic standpoint.

      --
      If it ain't broke, don't fix it.
    11. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      Sure, difference is: If some hacker steals money from your bank: 1 - You don't loose your money. 2 - The hacker has an hell of a time actually using that money. 3 - The hacker may actually get arrested and as such it works as a detriment for the act in the 1st place.

      This is the huge difference you are trying to put aside by using the same old incomparable comparison with state currencies.

    12. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      What stops you from stealing cash? The law. Because the law doesn't care about bitcoin, yet, doesn't mean it never will.

      This is only half right. Sure, the law doesn't care right now. But bitcoin very nature will always prevent the law, if/when it exists to actually catch any smart prepretator, as such, bitcoin will always have zero accountability when it comes to theft.

    13. Re:Bitcoin is faulty by nature by BitcoinBenny · · Score: 1

      1. You don't lose your money.
      Depends entirely on the jurisdiction of the bank. Yes in the US we are FDIC ensured, which protects most people from bank collapse and funds that are stolen.
      This isn't true for commercial banks or trading funds though. Reference, MF Global. What a mess. Its also entirely based on the fact that the government can simply reallocate other people's money in order to cover losses, i.e taxes, and money printing.

      2. Hacker has a hell of a time using the money.
      Seems like credit card fraud, ach fraud, and wire fraud are working great all over the world, I think if it was so difficult to abscond with the money we wouldn't be seeing these crimes occur every single day. Most of the systems to prevent this are after the fact and significantly increase operating costs in the form of insurance and other fees.

      3. The hacker may get arrested. Whereas when people do bad things on the Internet they are never arrested? I think we both know this isn't true, we arrest people who run spam servers, bot nets, and child porn rings all of the time. Many with little off line presence.

      You are right in one thing though, there is a huge difference between state currencies and Bitcoin, and that is unfettered control, and institutionalized devaluation in the form of printing money and buying it back. A properly secured bitcoin balance is more secure than any other system of money storage currently in existence.

    14. Re:Bitcoin is faulty by nature by tom229 · · Score: 1

      Not true. It's a common misconception that the decentralized nature of the bitcoin protocol makes all transactions anonymous. Bitcoin is actually easier to track than even cash considering every transaction is recorded in a public ledger that is required for the entire mechanism to work: the block chain. This makes it very difficult to "wash" bitcoins as the washing mechanism could not be tied to the theif like it commonly is today (ie. a small business front for money laundering). De-centralized just means lack of control from an establishment. The actual use of the currency is very trackable and law enforcement friendly.

      --
      If it ain't broke, don't fix it.
    15. Re:Bitcoin is faulty by nature by DoctorBit · · Score: 1

      Not an arrest yet, but:

      http://www.sec.gov/litigation/...

      "The Court's judgment permanently enjoins Shavers and BTCST from future violations of Sections 5 and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; orders them to disgorge, on a joint and several basis, $39,638,569, plus $1,766,098 prejudgment interest thereon, for a total of $40,404,667; and orders Shavers and BTCST each to pay a $150,000 penalty. "

      That's gotta hurt.

    16. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      What you said is false, completely false. Maybe it's by ignorance, maybe it's because you try to hide the facts. Laundering bitcoins, is as easy to put your money in Satoshi dice and take it out after playing. Or just get your money into a bitcoin tumbler and get it out after, or just exchange your bitcoins into Darkcoin and then back again after passing trough a middle wallet.

      All these methods are 100% anonymous. And you cannot shut them down since because of bitcoin decentralized nature they can always be hosted outside some specific country regulation in case that specific country get's a regulation about these services.

    17. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      This is not theft, this is a Ponzi scheme. I'm talking about theft, I'm talking about stealing your bitcoins from your wallet, or somebody else wallet, or an exchange wallet like - the case we are talking about in this post.

    18. Re:Bitcoin is faulty by nature by tom229 · · Score: 1

      I'll take your attempt at condescension as an indirect admission of losing the argument. You know very well that you can launder cash through gambling or currency exchange as well. The point remains that there are more ways to launder cash than there are to launder bitcoins. Bitcoins are no less lacking in "accountability" than cash, gold, or any other medium of trade except maybe digital currency controlled by the federal reserve.

      --
      If it ain't broke, don't fix it.
    19. Re:Bitcoin is faulty by nature by jbssm · · Score: 1

      Actually it's the fact that you completely changed your argument that makes you look like you are loosing the argument.

      I though we where talking about how easy it was to launder Bitcoin, but I get it that every time Bitcoin evangelists feel attacked and can't really give a proper solution to some problem about bitcoin (the fact that it's so easily laundered in this particular argument we are having) they quickly point their fingers at any fiat currency: "Ei, don't look at us, look at them, look, look how money is also evil." while failing to address the issue at hand and trying desperately to compare apples an oranges.

      Yes, because any reasonable person understand that while fiat, gold, diamonds, etc can be used to launder money, it's actually a process that demands lots of connections and quite a big deal of risks. Unlike bitcoin where you have to just simply pass it between a couple of wallets/websites. But oh well, I quite used to this kind of ridiculous arguments from bitcoin evangelists taking place on Reddit anyway.

    20. Re:Bitcoin is faulty by nature by david_thornley · · Score: 1

      First. while Bitcoin was created as a currency, it appears to be considered a commodity by the US government. Practically, it seems to be used as both.

      Government-backed currencies are really no better for accountability. Institutions that handle government-backed currencies are typically run better than institutions that handle Bitcoin for accountability. If somebody robs me when I have $100 in my pocket, I'm unlikely to see that money ever again.

      --
      "When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
  15. Huh? by gatfirls · · Score: 1

    That's like saying pink sheet/OTC stocks are preferable to NASDAQ listed because "no technology is perfect".

    Bitcoin has a couple good features but the lack of regulation/oversight/accountability outweighs all of them. I'd rather use carrier pigeons to move cash.

  16. Definition by stevez67 · · Score: 1

    Hacked = CEO and CFO ran off with the money

  17. And new regulations... by gatfirls · · Score: 1

    ...work to prevent that nonsense. It's not a perfect system but the good thing is that there is a regulatory body that can fix the bad parts (if it wants to by choice or by will of the people).

    With bitcoin it's "love it or leave it".

    Sure you can say bitcoin is not the problem it's the businesses handling them but when the defacto standard is amass and implode it's a symptom of bitcoin because other currencies don't seem to have that issue.

    1. Re:And new regulations... by ultranova · · Score: 1

      ...work to prevent that nonsense. It's not a perfect system but the good thing is that there is a regulatory body that can fix the bad parts (if it wants to by choice or by will of the people).

      With bitcoin it's "love it or leave it".

      You do realize that regulations against a bank fleecing its customers have nothing to do with the currency system in use, right?

      Sure you can say bitcoin is not the problem it's the businesses handling them but when the defacto standard is amass and implode it's a symptom of bitcoin because other currencies don't seem to have that issue.

      Businesses get funds stolen all the time. And the very comment you replied to was about one stealing from its customer. So I'm not entirely sure what "issues" which Bitcoins presumably has but US dollar doesn't you're referring to here.

      --

      Forget magic. Any technology distinguishable from divine power is insufficiently advanced.

  18. Just imagine if Bank of America was like this by Anonymous Coward · · Score: 0

    It would have a better reputation than it has now.

    1. Re:Just imagine if Bank of America was like this by twitnutttt · · Score: 1

      +1 =)

  19. I prefer my money to be stolen the old fashion way by JoeyRox · · Score: 3, Funny

    By banks and governments, thank you very much.

  20. Re:I prefer my money to be stolen the old fashion by Anonymous Coward · · Score: 0

    +1

  21. Re:I prefer my money to be stolen the old fashion by Anonymous Coward · · Score: 0

    +1
    and priests

  22. Where should I hold my Bitcoins? by MMC+Monster · · Score: 1

    Back when MtGOX went bust, people were saying you'd have to be an idiot to keep your Bitcoins there as they were untrusted.

    I'm sure people are saying the same thing now about Bitstamp.

    So I ask: Other than keeping it myself either in a personal wallet on my PC or smartphone or burned onto a CD on my shelf, where should I keep my Bitcoins? (Because on my desktop computer or smartphone is just asking for trouble, and on a CD is just asking for a different type of trouble.)

    --
    Help! I'm a slashdot refugee.
    1. Re:Where should I hold my Bitcoins? by wbr1 · · Score: 1

      Backups.. multiple copies. 15 copies on 15 encrypted flash drives. Doesnt matter, JUST DONT LEAVE MONEY IN AN UNREGULATED EXCHANGE.

      --
      Silence is a state of mime.
    2. Re:Where should I hold my Bitcoins? by jbssm · · Score: 1

      You should hold your Bitcoin by exchanging them for USD and then store them in your bank. This method besides being orders of magnitude safer, had an actual return of more than 70% during 2014.

    3. Re:Where should I hold my Bitcoins? by BitcoinBenny · · Score: 1

      You should hold them on your own computer, or preferably in a hardware or hard wallet. The problem is that people park their bitcoins with third parties who have full control over them so that they can engage in trade for other crypto and fiat currencies. When these places turn out to be less than reliable they walk away with the funds, or their security gets compromised resulting in loss of funds.

      Bitstamp getting hacked didn't affect the bitcoin network, and it didn't affect me. I didn't trust them to hold my bitcoin.

    4. Re:Where should I hold my Bitcoins? by bloodhawk · · Score: 1

      So 15 separate places for your entire bitcoin networth to be stolen from. Sounds like a wonderful idea.

    5. Re:Where should I hold my Bitcoins? by MMC+Monster · · Score: 1

      But is that what we should recommend to people who are not technologically verse?

      People who can expect their computers to get hit with a virus or trojan or phishing scan a couple times a year?

      --
      Help! I'm a slashdot refugee.
    6. Re:Where should I hold my Bitcoins? by bobbied · · Score: 1

      You should hold your Bitcoin by exchanging them for USD and then store them in your bank. This method besides being orders of magnitude safer, had an actual return of more than 70% during 2014.

      Safer, sure but 70% return in 2014? Which bank are you talking about?

      My bank pays out a fraction of a percent on savings accounts so the $3K in my account nets me a less than 10 cents a month. That isn't even close to 70% return... Maybe your name is Hillary and you can trade future contracts better than the pros or something, but I doubt there is any reputable bank paying 70% return on any investments. If you are an average investor, you should be getting nearly 7%/year right now on a mixture of stocks and bonds (i.e. mutual funds), but if you can make 70% returns, you are in the wrong business given you are posting on Slashdot.

      --
      "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    7. Re:Where should I hold my Bitcoins? by DoctorBit · · Score: 1

      Encrypt the wallet before making backups. All major bitcoin wallets offer this option.
       

    8. Re:Where should I hold my Bitcoins? by DoctorBit · · Score: 1

      A Trezor bitcoin safe:

      https://www.bitcointrezor.com/

    9. Re:Where should I hold my Bitcoins? by jbssm · · Score: 1

      Safer, sure but 70% return in 2014? Which bank are you talking about?

      It was a joke. Since bitcoin lost 70% of it's value in 2014, it was implying you would get a 70% in bitcoin by storing your money in USD during 2014.

    10. Re:Where should I hold my Bitcoins? by petermgreen · · Score: 2

      Given the overall shady nature of the organisations surrounding bitcoin trusting a service to store your bitcoins is folly. So you have to store them yourself.

      How you do that is a tradeoff between cost/inconviniance and risk.

      The normal method of risk management for those holding large numbers of bitcoins is to have a "hot wallet" and a "cold wallet". The hot wallet is where you keep the bitcoins you need on a day to day basis, you accept that if you get hacked you have a good chance of losing it's contents.

      The cold wallet is where you keep the bulk of your bitcoins. You keep the keys to the cold wallet offline and possiblly consider using a secret sharing algorithm with parts of the key distributed between multiple secret locations (e.g. if you use a 2 of 3 secret sharing setup then the comprimise of any one location won't cause loss or compromise of the secret).

      --
      note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
    11. Re:Where should I hold my Bitcoins? by bobbied · · Score: 1

      Ok, that makes sense.. You'd have made 70% more than holding BTC by just stuffing your mattress... Glowing recommendation that is..

      --
      "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
    12. Re:Where should I hold my Bitcoins? by Ash-Fox · · Score: 1

      Back when MtGOX went bust, people were saying you'd have to be an idiot to keep your Bitcoins there as they were untrusted.

      I say: You'd have to be an idiot to keep your money as Bitcoins or in Bitcoin exchanges.

      --
      Change is certain; progress is not obligatory.
    13. Re:Where should I hold my Bitcoins? by BitcoinBenny · · Score: 1

      I think a good android or ios based wallet is the way to go. Its a reasonably locked down environment, you can employ multi-factor security fairly easily, and its not too difficult to use. Nothing is perfect, the security mechanisms to really protect bitcoin in hardware are being actively developed.

      Don't trust your money to strangers is a good one also. Keeping money sitting in exchanges around the world of dubious origin and competence is asking for trouble. Bitcoin is having all of the teething problems that any new unregulated industry has. Its the wild west out there, and will take some time to settle down.

    14. Re:Where should I hold my Bitcoins? by Anonymous Coward · · Score: 0

      the problem is you then have to trust the security of those that implemented the wallet. Why are you trusting them more than an exchange, my issue is I don't trust any of them to do it securely, so you either act as your own high risk bank or you trust an unregulated 3rd party. Both options are fucked.

    15. Re:Where should I hold my Bitcoins? by DoctorBit · · Score: 1

      So use one of the many open-source wallets that support encryption.

  23. Solution by Anonymous Coward · · Score: 0

    Bitcoin 2.0 hopefully will solve these problems, and allow complet and pure peer to peer exchanges.

  24. Libertarian utopia by Anonymous Coward · · Score: 0

    This is what the libertarian utopia is all about. Hard currency (or a simulation thereof) and real consequences when institutions fail. It's just like back in old times. If you didn't pick the right bank, and the bank failed, there was no FDIC to insure you. The FDIC is part of big government, which is evil. Libertarian idealists are free to chose these currencies, and their consequences. I welcome them to do so. Given time, they might even run themselves far enough into the poorhouse so that they can't afford to come online and spout their nonsense anymore.

  25. What a Fool Believes by Anonymous Coward · · Score: 0

    The Aretha version is awesome just for her vocal.

  26. Fiat Better? by Tokolosh · · Score: 2

    http://www.wsj.com/articles/ch...

    The value of the ruble isn't the only thing that is vanishing in Russia. A Moscow hedge fund chief executive has disappeared, along with all the money in the firm's accounts.

    That's according to a stunning feature in The Wall Street Journal. Kim Karapetyan, 29, the youthful founder of Blackfield Capital CJSC, has disappeared, much to the dismay of his staff, which didn't know until a group of men charged into the firm's plush offices.

    From The Journal:

    The firm’s employees didn’t know anything was amiss until mid-October, when three men charged into Blackfield’s offices in an upscale complex along the Moscow River in central Moscow, said people who were there.

    The men, who didn't identify themselves, said they were looking for Blackfield's 29-year-old founder, Kim Karapetyan, according to the people who were there.

    But Mr. Karapetyan wasn't in the office that day or the next, when senior executives explained to the staff of about 50 that there was no longer any money to pay their salaries, said one former senior executive and ex-employees. The executives disclosed that all the money in the company accounts — some $20 million, including investor cash — was also missing, they said. It couldn't be determined whether investors were from Russia or other countries.

    "Our CEO just disappeared," said Sergey Grebenkin, one of the firm's software developers, in an interview.

    No attempts to contact or find Karapetyan were successful, and he is still MIA. The company's website brags that its "systematic investment process helps avoid human-factor, cognitive-biases, and emotional-trading errors," but the CEO running away with all your money seems like a fairly big human error.

    --
    Prove anything by multiplying Huge Number times Tiny Number
  27. Re:Haters gonna hate by Anonymous Coward · · Score: 0

    Bitcoin is still the premier form of currency in the world. Anyone who says otherwise is just afraid that it might destroy their own nation's currency and/or economy.

    HAHAHAHAHAHAHAHAHAhaha ha heh. Oh, were you being serious?

    When major developed countries start holding Bitcoin in their currency reserves, and commodities / futures / financial instruments are being traded on the open market in Bitcoin instead of USD, then you can lay claim to being the "premier form of currency in the world."

    Bitcoin isn't even in the top 5. Are you cracked?

    No, she not being serious, she is mocking bitcointards.

  28. It's the MITM by Anonymous Coward · · Score: 0

    named Cloudflare and Prolexic. Do you think you can use U.S-based MITM services like these, for a website dealing in trading currency? You think the NSA would not be all up in your services?

  29. I saw this coming by Anonymous Coward · · Score: 0

    In mid october, 2014, I received the message below from Bitstamp. Before that message, I'll relate how it happened. I purchased a small number of coins over a year ago with Bitstamp and just parked them there in hopes that they'd deflate. Two months ago, I received this message below. When I signed up, their policy was that you did not have to verify your account (by revealing your identification). At least, I thought that I could still return the money to the same fiat bank account whose funds created the Bitstamp account. Well, then two months ago, after still not verifying my account and receiving no other notification, I get the following letter that indicated that in 28 days, they would seize the funds (mid-November): "Dear Bitstamp customer, This is your Final Notice. We have determined that despite you being notified of our change in Bitstamp's Verification Policy more than a year ago on [redacted] and despite our repeated entreaties and warnings to you, you have not yet verified your Bistamp account, resulting in our having to suspend your activity. Please be advised: We cannot allow unverified customers to trade or do any business whatsoever at Bitstamp, as doing so would violate our AML and KYC policies. See: https://www.bitstamp.net/aml-p... As you are holding a balance with Bitstamp, we kindly ask you to verify your account within 28 days of receiving this notification. If you do not do so, you will have breached our Agreement and failed to remedy your breach. This will automatically result in the following: your account will be terminated, you will lose access rig hts, and you will no longer be considered a Bitstamp customer. Any remaining balance in your account will be subject to immediate seizure by and forfeiture to regulatory authorities. Please take these simple verification steps immediately. You can verify your Bitstamp account here: https://www.bitstamp.net/accou... or contact our support at support@bitstamp.net Best regards, Bitstamp Team "

  30. What an ass ... by CaptainDork · · Score: 1

    Did you even read TFS? How about TFT?

    --
    It little behooves the best of us to comment on the rest of us.