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Hackers Steal $5M In Bitcoin During Bitstamp Exchange Attack

Posted by Soulskill on from the digital-wild-west dept.

itwbennett writes: After a weekend hack forced the Bitcoin exchange Bitstamp to shut down, Bitstamp has revealed that $5 million worth of bitcoin was stolen during the attack. And that's not all the bad news for Bitcoin this week: Canadian Bitcoin exchange Vault of Satoshi announced it is is no longer accepting new deposits and will close Feb. 5. But in this case the operators are pursuing new business opportunities, saying in a post that the shutdown "has absolutely nothing to do with insolvency, stolen funds, or any other unfortunate scenario."

67 of 114 comments (clear)

  1. Bitcoin Loss by smittyoneeach · · Score: 2, Funny

    Bitcoin loss
    After such toil
    All goes to dross
    Like $100/bbl oil
    Burma Shave

    --
    Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
    1. Re:Bitcoin Loss by BarbaraHudson · · Score: 1, Troll
      They lost $5 million
      But it's not in real bucks
      It's bitcoin bullion,
      Uninsurable deposits - that sucks.
      They're closing next month
      But don't worry they said.
      Your money's safe with us
      Though our company's dead.
      Unregulated "money"
      is no money at all,
      And so bitcoin's confidence
      Takes another fall.

      Burma Shave

      --
      "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
    2. Re:Bitcoin Loss by QilessQi · · Score: 1

      Hack or fraud
      Gain or lose
      On /r/Bitcoin
      It's all good news
      Burma Shave

      --
      Koans and fables for the software engineer
    3. Re:Bitcoin Loss by QilessQi · · Score: 1

      It's very sane
      Let us explain:
      Your coins remain
      On the blockchain
      In public view
      So carry on!
      No cares for you!
      Aaaaaand... they're gone.
      Burma Shave

      --
      Koans and fables for the software engineer
  2. Thats why I keep my money in petro-dollars. by Anonymous Coward · · Score: 1, Funny

    Oh shit!

    1. Re:Thats why I keep my money in petro-dollars. by houstonbofh · · Score: 3

      Funny, but it does make me wonder why people keep anything in these exchange or in online wallets anymore. I mean is keeping a small file safe yourself really that hard?

    2. Re:Thats why I keep my money in petro-dollars. by JustinKSU · · Score: 1

      It's hard to buy or sell bitcoin with fiat currencies (e.g. US Dollar). Online exchanges facilitate that. Why people keep it in online wallets for an extended period of time? Maybe they trust professionals to lock down their business better than they can lock down their own PC. Plus you have to work about disk corruption etc.

    3. Re:Thats why I keep my money in petro-dollars. by exomondo · · Score: 1

      Maybe they trust professionals to lock down their business better than they can lock down their own PC.

      And these incompetent operators is what is causing bitcoin to lose credibility. An unregulated, anonymous (insofar as bitcoin addresses just being a series of numbers not tied to anybody in particular) currency that is stored with unregulated, uninsured entities is immediately a bad idea and people supporting them and then being fleeced by them or their poor security practices and policies is really damaging bitcoin.

    4. Re:Thats why I keep my money in petro-dollars. by mythosaz · · Score: 3, Insightful

      Can those bitcoin stealing malwares pickpocket my wallet from a printout in a manila envelope in my safe?

      If I had millions of USD in BTC, I'd have to consider having several offline wallets.

    5. Re:Thats why I keep my money in petro-dollars. by ls671 · · Score: 1

      I prefer to always carry a safe file in my pockets. I allowed me to open a few.

      https://en.wikipedia.org/wiki/...

      --
      Everything I write is lies, read between the lines.
    6. Re:Thats why I keep my money in petro-dollars. by Anonymous Coward · · Score: 1

      Is it? Is it really? I haven't exactly seen a decrease in the use of bitcoins. Though I aslo haven't seen a significant increase either. However among those using it they still seem to be using it.

    7. Re:Thats why I keep my money in petro-dollars. by rtb61 · · Score: 2

      The real question is how much do those operators make by shifting around other people's bitcoin and doing the conversion versus how much they make by having a bunch 'er' stolen, seeing as there are no criminal ramifications for when they get stolen, they just need to have evidence of an attack and it's whoops tee hee and they do not cover the loss, like a normal bank would.

      --
      Chaos - everything, everywhere, everywhen
    8. Re:Thats why I keep my money in petro-dollars. by exomondo · · Score: 2

      Is it? Is it really? I haven't exactly seen a decrease in the use of bitcoins. Though I aslo haven't seen a significant increase either. However among those using it they still seem to be using it.

      Of course it is. I'm not saying people aren't using it but obviously the broader appeal of it is not taking hold and it is viewed as "unsafe" with the incompetence of these operators proving that point by losing customer funds. Bitcoin has a lot going for it but obviously won't go mainstream if you have exchanges continuously screwing up like this.

    9. Re: Thats why I keep my money in petro-dollars. by Anonymous Coward · · Score: 1

      Yes, just like people stop using dollars when there are bank robberies. It's normal.

    10. Re: Thats why I keep my money in petro-dollars. by exomondo · · Score: 3, Insightful

      Yes, just like people stop using dollars when there are bank robberies.

      No, people do not stop using dollars when there are bank robberies because - as I pointed out in my original post - these bitcoin entities are unregulated and uninsured. If a bank is robbed you do not lose your money, when MtGox was robbed you lost your bitcoins.

      I thought I made it pretty clear and wouldn't have to point out that the reason I explicitly said they were uninsured and unregulated is because that is contrary to the existing banking systems.

    11. Re:Thats why I keep my money in petro-dollars. by gstoddart · · Score: 2

      An unregulated, anonymous (insofar as bitcoin addresses just being a series of numbers not tied to anybody in particular) currency that is stored with unregulated, uninsured entities is immediately a bad idea

      But, tell me, how is this not exactly what people should have expected? You can't say "wow, what we really need is an unregulated currency", and then be caught off guard when the lack of regulation and insurance bites you in the ass.

      If you want to have an unregulated currency, don't bloody well expect all of the benefits of a regulated and insured banking system.

      By definition these are not banks, these are not mature financial players, and they're unregulated and insured -- they're essentially technology startups. Which means you are taking a lot more direct risk.

      You say "these incompetent operators is what is causing bitcoin to lose credibility", I say it never had that credibility in the first place. You wanted the wild west of currency, you got it.

      So, those of us who have been scratching our head over the whole bitcoin thing aren't suddenly going to feel sorry for you, not even a little. Because what you're complaining about has been touted as a design feature.

      --
      Lost at C:>. Found at C.
    12. Re: Thats why I keep my money in petro-dollars. by Anon-Admin · · Score: 1

      You are not exactly right. That only covers up to $100,000

      So if you have a retirement account with $500,000 in it and the bank gets robbed, you get $100,000 back. Unless the bank has taken steps to guarantee amounts above $100,000. Thought most dont, they simply have you sign I form when you open the account that states you have been notified.

    13. Re:Thats why I keep my money in petro-dollars. by exomondo · · Score: 1

      But, tell me, how is this not exactly what people should have expected?

      It absolutely is, I agree with you. My whole point is that using exchanges like that is completely stupid, you don't store your money with some random foreign entity that has no real responsibility or accountability.

    14. Re: Thats why I keep my money in petro-dollars. by exomondo · · Score: 1

      You are not exactly right. That only covers up to $100,000

      Unlike bitcoin they don't earmark the cash on a per-account basis. If a bitcoin exchange is robbed the funds are removed from specific accounts, if a bank branch is robbed and cash is stolen that isn't necessarily from anybody's account in particular.

    15. Re: Thats why I keep my money in petro-dollars. by Anonymous Coward · · Score: 1

      You are not exactly right. That only covers up to $100,000

      So if you have a retirement account with $500,000 in it and the bank gets robbed, you get $100,000 back.

      No you are thinking of insurance for the bank going out of business which was part of the Banking Act of 1933. When cash is held on the premises of bank it is not literally held in individual accounts so when a robber steals money from a bank it isn't from one particular bank customer. What you are describing there (even though the limit is incorrect as it was raised to $250,000 in 2008) is FDIC or the Federal Deposit Insurance Corporation which covers the depositors up to that amount in the event the bank goes out of business and is unable to payout its account holders.

    16. Re:Thats why I keep my money in petro-dollars. by gstoddart · · Score: 1

      What bitcoin exchanges have any real responsibility or accountability?

      Isn't it, by definition, unregulated? You want FDIC insurance or something? Like a bank?

      --
      Lost at C:>. Found at C.
    17. Re:Thats why I keep my money in petro-dollars. by exomondo · · Score: 1

      What bitcoin exchanges have any real responsibility or accountability?

      None, that's what I'm saying.

      Isn't it, by definition, unregulated?

      Yes.

      You want FDIC insurance or something? Like a bank?

      Yes, if I'm going to store my money with some other entity absolutely, but no bitcoin exchange is going to provide that.

  3. Bitstamp hack..... by Anonymous Coward · · Score: 1

    Bitstamp co-founder Damijan Merlak said that Bitstamp plans to resume its operations in the next 24 hours. Hot-wallet did what hot-wallets are designed to do, compromise only resulted in a minor loss (relatively). If bank of america and other major institutions cannot keep your info out of the hands of hackers why would you think any other website is infallible?

    Own your own keys, be responsible for your own money. Unless you are day-trading there is no reason to leave a money on an exchange earning zero interest.

    1. Re:Bitstamp hack..... by exomondo · · Score: 3, Insightful

      If bank of america and other major institutions cannot keep your info out of the hands of hackers why would you think any other website is infallible?

      You wouldn't, but Bank of America is federally insured, Bitcoin exchanges are not. Obviously storing currency in one of those is a lot more risky than that other.

    2. Re:Bitstamp hack..... by Nutria · · Score: 5, Insightful

      If bank of america and other major institutions cannot keep your info out of the hands of hackers why would you think any other website is infallible?

      My bank (Chase) got hacked last year, and Teh Evil Haxx0rz might have gotten my vital info, but all of my money is still in the bank.

      Months before that, someone used my Chase CC to buy a couple of Amtrak tickets (presumably to then refund them for cash). Got a fraud alert from Chase, and called them to confirm that it was in fact fraud. They immediately canceled my card sent me new ones. Checks of my & my wife's credit reports show no unusual activity.

      So, thank you very much, but I'll stick with fiat money stored in an actual, regulated American bank.

      --
      "I don't know, therefore Aliens" Wafflebox1
    3. Re:Bitstamp hack..... by mythosaz · · Score: 2

      Good.

      $5M is a lot, but I've long suggested that any significant amount of BTC be stored on a printout in a safe, with a backup in a safe deposit box.

    4. Re:Bitstamp hack..... by PRMan · · Score: 1, Insightful

      Now ask your grandparents the same questions.

      Now ask yourself the same questions about a large amount of cash.

      --
      Peter predicted that you would "deliberately forget" creation 2000 years ago...
    5. Re:Bitstamp hack..... by PRMan · · Score: 1

      Yeah, that's good. That way any bank employee reviewing the contents of your box can take your coins and you will never know for years.

      --
      Peter predicted that you would "deliberately forget" creation 2000 years ago...
    6. Re:Bitstamp hack..... by Nutria · · Score: 1

      What?

      --
      "I don't know, therefore Aliens" Wafflebox1
    7. Re:Bitstamp hack..... by Anonymous Coward · · Score: 1

      Never mind. Don't worry your pretty little head over it.

    8. Re:Bitstamp hack..... by Anonymous Coward · · Score: 1

      Almost the whole point of Bitcoin is that you can keep your wallet yourself, encrypted however you like - getting all the security features of keeping your cash under your mattress, without the vulnerabilities - and still be able to use it for electronic transations. These people who are giving their Bitcoin wallets to shady online services, and just trusting them to keep them secure, are doing something that Bitcoin was explicitly designed to make unnecessary.

    9. Re:Bitstamp hack..... by kamapuaa · · Score: 1

      To be fair, most grandparents are going to be less than 100 years old (the youngest you would be to have money on deposit before the government started backing bank deposits). Great or great-great parents is more likely (and they're likely dead). The banking system is fundamentally different, it was a stupid point.

      --
      Slashdot: providing anti-social weirdos a soapbox, since 1997.
    10. Re:Bitstamp hack..... by codebonobo · · Score: 1

      Bitstamp has over 100 % solvency and stores most of the coins in multisig cold storage. The stolen amount was just their pocket change on the trading server. Circle and Coinbase are insured and store a majority of coins in multisig cold storage. Multisig cold storage means that it is practically impossible for hackers, disk corruption, or physical theft to steal the coins.

    11. Re:Bitstamp hack..... by codebonobo · · Score: 3, Informative

      Circle and coinbase are regulated with Fincen, AML and KYC regulations, additionally they are insured. The "hack" exchange discussed here was also audited recently and had over 100% solvency unlike most banks and the stolen amount was just some of their pocket trading coins on their live server. I use traditional banks along with bitcoin banks because there are advantages to knowing when to leverage Bitcoin or Fiat.

    12. Re:Bitstamp hack..... by Nonesuch · · Score: 1

      Yeah, that's good. That way any bank employee reviewing the contents of your box can take your coins and you will never know for years.

      Where do you live that "bank employees" can "review" the contents of your safe deposit box?

      --

      I do not deploy Linux. Ever.
    13. Re:Bitstamp hack..... by bloodhawk · · Score: 1

      If you are going to the effort of putting them in a bank anyway, why not just convert them to real money and earn interest in the bank on a term deposit, then you get the benefit of it being in a bank AND having banking regulation and government backed insurance if the bank is robbed, goes bankrupt etc etc.

    14. Re:Bitstamp hack..... by roman_mir · · Score: 1

      Cyprus, Greece, you think the banks there weren't regulated to death by their governments? What you are relying upon, when you say 'regulated' is actually the infinite paper supply by the Federal reserve and Congress willing to backstop any large back and not let you lose your nominal dollar value, but the system itself is rotten, it doesn't have any actual savings and nothing can backstop the entire system, when it collapses you will get your paper back, for sure, but good luck buying anything with it.

      Note that I am not a BTC proponent (except as a curiosity).

      --
      You can't handle the truth.
    15. Re:Bitstamp hack..... by Nutria · · Score: 1

      Exactly.

      (My paternal grandparents grew up in the Depression, but still had no fear of banks. They were pretty darned cautious, though, by only using a big local *bank*, not S&L, that survived the Depression. Their parents probably didn't use banks in the 30s -- and *maybe* not in the 40s -- but definitely did in the 50s.)

      --
      "I don't know, therefore Aliens" Wafflebox1
    16. Re:Bitstamp hack..... by Nutria · · Score: 1

      What you are relying upon, when you say 'regulated' is actually the infinite paper supply...

      Of course I know that it's the US$ is fiat, and based on faith in a government that's $18T debt. That does not make it less safe than gold, silver, the Yen or Renminbi.

      --
      "I don't know, therefore Aliens" Wafflebox1
    17. Re:Bitstamp hack..... by GrandCow · · Score: 1

      Uh, if your bank is "reviewing" the contents of your safety deposit box, you have a really shitty bank and should probably not have anything stored there.

      That or you have no idea how safety deposit boxes work.

      --
      "Well kids, you tried your best, and you failed. The lesson is, never try." -Homer Simpson
    18. Re:Bitstamp hack..... by JustinKSU · · Score: 1

      If you are going to the effort of putting them in a bank anyway, why not just convert them to real money and earn interest in the bank on a term deposit, then you get the benefit of it being in a bank AND having banking regulation and government backed insurance if the bank is robbed, goes bankrupt etc etc.

      Because that interest will not cover inflation.

    19. Re:Bitstamp hack..... by Anonymous Coward · · Score: 1

      Gold and silver isn't real money. You may feel it is so and good for you. But there is more to monies than just buying/selling power. Collect 1 million dollars (or whatever) of gold/silver and put it in your home and see how much it is worth in a week or two and more importantly, who has it.

    20. Re:Bitstamp hack..... by bloodhawk · · Score: 1

      from what I can see the loss you would make by keeping bitcoin for the last 12 months is exponentially worse than inflation on a bank account.
      https://blockchain.info/charts...

    21. Re:Bitstamp hack..... by Nutria · · Score: 1

      As to gold and silver, that's money, not currency, there is no comparison.

      Do you actually know the definitions of money and currency? 'Cause... when *I* look at the definitions of "currency" and "money", they're God damned similar; i.e., a metric ass-load of comparison.

      Are you a gold bug ("Someone who considers one commodity, usually gold, "the appropriate measure of wealth, regardless of the quantity of other goods and services that it can buy"") with tendencies towards conspiracy theories? (Not that you'd think or admit you are, even if you actually are...)

      --
      "I don't know, therefore Aliens" Wafflebox1
    22. Re:Bitstamp hack..... by Nutria · · Score: 2

      Money and currency are different things, money is ...

      Currency is what is used in circulation ...

      So what is "paper money"?

      Gold ... has intrinsic value

      No. It only has the value that we believe it has. Just like... fiat money!!!

      The only difference between metals+land (aka physical assets) and fiat money is that they'll be around long after fiat money has gone away. Unless, of course, the government seizes it, it corrodes away (silver, titanium copper, etc), gets flooded out, is lost, stolen, misplaced, etc.

      USD used to be a meaningful reserve currency before 1971, now it is not

      If we had stayed on the gold standard, what would have happened to the US (and world, for that matter) economy when the population is growing faster than the new supply of precious metals?

      The world population increased 75% from 1960 to 1999. Did the amount of gold increase 75% in that time? No. Population is going up exponentially, but the gold supply is going up linearly.

      We also have more "stuff" (cars, bigger houses, TVs, gadgets, computers, etc) than we did 50 years ago. That "stuff" has to be paid for, which would require even more gold.

      Thus, commodity-based currency eventually became unsustainable.

      --
      "I don't know, therefore Aliens" Wafflebox1
    23. Re:Bitstamp hack..... by Kiuas · · Score: 2

      Gold is market money, it has intrinsic value first of all, before it is even money

      The idea that anything has "intrinsic value" is so badly flawed I don't know why this myth persist. Gold and other metals have practical uses, which gives it some additional value yes, but assuming that gold will retain its value, or in fact have any value whatsoever, under all conditions is false.

      USD used to be a meaningful reserve currency before 1971

      I don't know exactly what your definition of 'meaningful' is, but approximately 60 % of the world's currency reserves are still in USD, with the Euro being the only one coming even close. I'd call that rather meaningful. So yes, the dominance of the dollar has shifted a bit (which mind you, is not an altogether negative thing either), but dollar is still the go-to reserve currency of the world.

      --
      "It is the business of the future to be dangerous" -Alfred North Whitehead
    24. Re:Bitstamp hack..... by goose-incarnated · · Score: 1

      money is a store of value

      Sorry, no. Money doesn't store value, it measures it in much the same way that rulers don't store distance, they measure it.

      --
      I'm a minority race. Save your vitriol for white people.
    25. Re:Bitstamp hack..... by gmhowell · · Score: 1

      Now ask your grandparents the same questions.

      Now ask yourself the same questions about a large amount of cash.

      Insured by the FDIC (and FSLIC). And regulated. And we've known about this for a minimum of 80 years. Why is it so difficult for Bitcoin, supporters, and companies to learn lessons from the past and NOT repeat them?

      It's the same as giving modern radical Muslims a pass because of atrocities commited by the Roman Catholics 500 years ago. Why are the lessons never learned? Why start from zero?

      We are even talking about "If I have seen further it is by standing on the shoulders of giants," more like standing on the toes of little people.

      --
      Jesus was all right but his disciples were thick and ordinary. -John Lennon
    26. Re:Bitstamp hack..... by Anonymous Coward · · Score: 1

      Gold is market money, it has intrinsic value first of all, before it is even money and it has a long history of being used as money by market participants

      This is just plain wrong. Gold does not have intrinsic value. Almost no one will trade a house for your gold. Almost no one will give you groceries, cut your hair, sell you firewood for your gold. Furthermore, the amount of goods that you can get by directly trading for gold, or by converting your gold into dollars and buying goods has oscillated wildly in the short and long term all over the world. Furthermore, people who have been in economic collapses in recent decades ( Yugoslavia, Argentina, Syria) have discovered that during economic collapses, no one wants to trade for gold. They want to barter real goods for real goods. Gold is nearly worthless unless there is an associated currency to convert it into.

    27. Re:Bitstamp hack..... by clovis · · Score: 1

      If it doesn't store value, how come people give me things for it? What the hell is your definition of value?

      Yes, I'd like the pot roast please, here's $40. Well sir, wonderful, looks like you have some value there, but we don't take money, we only take value.

      I see where you are coming from, but I think this is what they are saying.
      When some people mean "store value", they are thinking that if one hours work gets me money that will buy me 7 gallons of gasoline, or 10 cans of Dinty Moore beef stew, and today I earn $20 for that hour, then that value (of my work) is stored in the money, and I can always get that much goods for that $20.
      If a few years later, that $20 can only buy 4 gallons of gas or 5 cans of stew, then the value of one hours work was not stored, but rather lost by converting it into $20 when it was earned.
      But the 7 gallons of gasoline will always be worth approximately 10 cans of Dinty Moore regardless of the dollar price. What people want is a "store of value" that will always get you the 10 cans of Dinty Moore for the hour of work you did some years ago. There have been currencies that have lost all their value - 1920's German marks, whatever they used in Mozambique for example. Some people believe that a certain weight of gold will always get you the same (within reason) amount of beef stew over the decades, and although that isn't true, but it is closer than most other things that pass for money.

    28. Re:Bitstamp hack..... by Nutria · · Score: 2

      you could buy a new car for 20 ounces 100 years ago you can still buy a new car for 20 ounces today.

      But there are a lot more cars (and people to buy them) now than 100 years ago. That's a big problem, and why I said that the GS is unsustainable.

      Gold provides natural level of inflation at about 1.5% a year.

      It does?

      --
      "I don't know, therefore Aliens" Wafflebox1
    29. Re:Bitstamp hack..... by roman_mir · · Score: 1

      The prices of cars in gold can be falling with gold being used as money. With paper the prices are going up, there is no reason why prices shouldn't be falling and they were in fact falling under gold and they would still be falling. Prices for manufactured goods fall over time measured in real money. Price for a new car today could be 5 ounces of gold today if we did not try to inflate insanely.

      Estimated gold reserve on the planet is between 155 and 171 thousand tons of gold, we mine about 3.5 thousand per year today, so that's just around 2% and the mining increased over the years (50 years ago yearly gold production was closer to 2.5 thousand tons per year).

      If in fact, the governments of the world were looking for 2% inflation, which in itself is a dubious target to aim for, we should desire deflation instead, gold provides that exact amount very nicely without some idiot bankers and politicians fiddlefucking with it.

      --
      You can't handle the truth.
    30. Re:Bitstamp hack..... by roman_mir · · Score: 1

      Well, does your life have any value under all conditions?
      Gold has intrinsic value that actually goes well past your life, gold had value before you and it will have value long after you are gone (and me, and everybody else who is living today).

      Gold has intrinsic value in its own right and it has value that we recognise as such because we want gold. People wanted gold since the moment they have first seen it and they want it today. Gold has thousands of years of a proven track record, which is thousands of years more than any fiat currency, any paper currency and any digital currency.

      Gold was used as money as a result of it having this value. Gold became money because people wanted it, not because somebody told them they have to do it.

      As to the reserve currency being meaningful it has to have actual monetary value behind it, USD is not a meaningful reserve currency because it is backed by nothing. Before 1971 it was backed by gold, today it's backed by nothing and yes, it still represents the largest amount of reserve in the world, but this is exactly what I was referring to, when I mentioned Greece and Cyprus and such.

      USD as a reserve is meaningless and Gresham law will prove it to be such. You can't get anything for dollars once people are unwilling to take them, because nobody has to provide you anything for them, there is no reserve behind this 'reserve'. There is nothing behind the zeroes on the paper, no gold, not even tin.

      --
      You can't handle the truth.
    31. Re:Bitstamp hack..... by roman_mir · · Score: 1

      Right, so if money doesn't store value how do you propose to be able to buy a similar amount of products with your money tomorrow that you could buy yesterday?

      Money is not a measure of value, it is an actual store of value, it is also unit of account and medium of exchange. Without being able to store value money is not only useless, it's dangerous to have.

      --
      You can't handle the truth.
    32. Re:Bitstamp hack..... by rhodium_mir · · Score: 1

      Money is not a measure of value, it is an actual store of value, it is also unit of account

      This explains why when I go to the store I keep seeing prices denominated in grams of rhodium.

      --
      You can't spell "oneiromancy" without "roman".
  4. Re:Replace bitcoin with "cash". by PRMan · · Score: 1

    And these incompetent operators is what is causing cash to lose credibility. An unregulated, anonymous currency that is stored with unregulated, uninsured entities is immediately a bad idea and people supporting them and then being fleeced by them or their poor security practices and policies is really damaging cash.

    Is it? Is it really? I haven't exactly seen a decrease in the use of cash. Though I aslo haven't seen a significant increase either. However among those using it they still seem to be using it.

    Seems the same to me.

    --
    Peter predicted that you would "deliberately forget" creation 2000 years ago...
  5. Bitcoin != $Coins. by Anonymous Coward · · Score: 1

    5 million dollars were not lost. Stop speaking of Bitcoins in terms of real currency. The fact you keep relating it to currency means that cash is king and you have no argument that could prove otherwise, until you only speak of Bitcoins in terms of number of Bitcoins.

    1. Re:Bitcoin != $Coins. by PopeRatzo · · Score: 2

      Stop speaking of Bitcoins in terms of real currency.

      Don't worry. Fewer and fewer people will be making that mistake in the future, except maybe the poor sod who's gonna try to buy something with Bitcoins a year from now.

      --
      You are welcome on my lawn.
  6. Were they hacked? by Holistic+Missile · · Score: 2

    Given law enforcement's inability and unwillingness to investigate any online crime, combined with the complete lack of government regulation or even recognition as a legal tender, what is stopping the exchange operators from simply stealing the bitcoins and then saying they were hacked?

    "Sorry, we got hacked and all your coins are gone. It was probably criminals in Russia / North Korea / Elbonia. Look! They covered their tracks so well, they made it look like the attack came from the Starbucks across town. We lost all our money, too, so we're shutting down and filing bankruptcy. Better luck next time."

    Is there any way to track the stolen coins and void them? I wouldn't think people would steal them if they couldn't spend / cash them...

    --
    When you're dead, you don't know you're dead. It only affects the people around you. Same thing when you're stupid.
    1. Re:Were they hacked? by Sqr(twg) · · Score: 1

      The bitcoin transaction chain is public, so in theory it is possible to track stolen bitcoins. People could arbitrarily decide not to accept bitcoin from tainted sources (or not to accept bitcoin at all) and that would make life much harder for thieves and extortionists. However, the accepted practice is that all bitcoins are equal. There is no governing authority that has the power to declare that certain transactions are "tainted".

      If a mechanism for declaring bitcoin "tainted" would be introduced today, it would not only affect the original thieves, but also a large number of innocent extortionists and drug dealers who just happened to run their bitcoin through the same "tumbler" as the thieves. The whole system would collapse. So it's not going to happen.

    2. Re:Were they hacked? by AmiMoJo · · Score: 1

      Is there any way to track the stolen coins and void them?

      Yes and no. The coins can be tracked easily because all Bitcoin transactions are public. As soon as the thieves transfer them to someone else it will be visible. However, for anyone to notice we would need a list of the stolen coins. Even if we had the list, what would we do with the information? Someone receives a payment from an allegedly stolen coin... we have an email address for them, that's it. Unknowingly receiving stolen currency isn't a crime everywhere, and even where it is Bitcoin might not be considered a currency or even goods...

      Bitcoins can't be voided.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    3. Re:Were they hacked? by MrL0G1C · · Score: 1

      Bitcoin is ideal for money Laundering and there are money laundering services.

      You transfer $100 to the money laundering service wallet A, then the money laundering service transfers from wallet B $40 to your second wallet and $60 to your 3rd wallet. Trace lost.

      --
      Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
    4. Re:Were they hacked? by StikyPad · · Score: 1

      Not lost. That's only effective if there's no pattern, and erasing a pattern is a lot more difficult than just splitting the transfers. Assuming the transfers are timely (and it would seem likely that they would be), you could narrow down the source of the funds to accounts that sent money to the launderer within a given timeframe. Seeing the pattern more than once would increase the probability of a match, so you could never receive funds to the same account twice. Further, you could never aggregate funds in the future without giving yourself away, including paying for anything, otherwise you've identified yourself. That severely lowers the value. Bitcoin is good for a lot of things, but anonymity and laundering are not among them. And pseudonymity is not anonymity. For anonymity, cash is king.

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    5. Re:Were they hacked? by MrL0G1C · · Score: 1

      https://bitlaunder.com/bitcoin...

      Site linked launders over time which apart from extremely large transfers would destroy any trace. Any intelligent criminal would use bespoke software or arduous work to split the stolen coins into dozens or even hundreds of small wallets of varying size, those could then be sold for hard cash or goods etc.

      So yes, bitcoins are ideal for traceless laundering.

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      Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
  7. Re:Why do bitcoins have value? by myforwik · · Score: 1

    Not coins have value because they have useful properties of money that facilitate trade. They can not easily be created/mined. They are easily divisible, easily transported, they don't rot or wear out. So they value for the same reason gold has value: their intrinsic properties are close to that of ideal money. Tabasco sauce can easily be made, will go off, is annoying to divide and measure, and must be transported physically in a container. It is terrible for use as money.- Money is meant to be something that can store wealth, in that people will accept it for wealth and give it when given wealth. They are not banks, they are exchanges. A bit coin is basically a secret long number, you can store it however you want. Most people store them in a common file format that is encrypted called a wallet.

  8. Re:What if the exchange stole the bitcoins? by myforwik · · Score: 1

    Several of them have. Users need to trust them and/or only give then a small amount of currency and bit coins at a time, which is what pretty much everyone who isn't an idiot does.

  9. Re:Sad to see a good idea... by Anonymous Coward · · Score: 1

    destroyed by greedy Republicans. Of course what else would anyone expect since they rule the money supply in the US. They are creating destructive inflation in order starve families. They hate the poor and want us to die.

    You seem to think that Republicans control the money supply in the US.
    This is wrong
    The people who control our money supply are neither Republicans nor Democrats, nor do they care which party wins the elections. They are as much Europeans as they are Americans and have little to no loyalty to any country or party. It is also wrong to think that they are creating inflation (or poverty) to harm others. Inflation is a side effect of their expanding the money supply to seize power and assets. They would be happier to do it without inflation and without causing social unrest. It's just an unfortunate side effect. If you had been paying attention, you might have noticed that the Democrats (through Eric Holder) are the ones kowtowing to Wall Street and rescuing their banks and investments houses. Meanwhile small banks and their officers all over the country have been closed and their officers have been arrested.