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Chaos and Hackers Stalk Investors on Cryptocurrency Exchanges (reuters.com)
From a report: Dan Wasyluk discovered the hard way that trading cryptocurrencies such as bitcoin happens in an online Wild West where sheriffs are largely absent. Wasyluk and his colleagues raised bitcoins for a new tech venture and lodged them in escrow at a company running a cryptocurrency exchange called Moolah. Just months later the exchange collapsed; the man behind it is now awaiting trial in Britain on fraud and money-laundering charges. He has pleaded not guilty. Wasyluk's project lost 750 bitcoins, currently worth about $3 million, and he believes he stands little chance of recovering any money. [...] Cryptocurrencies were supposed to offer a secure, digital way to conduct financial transactions, but they have been dogged by doubts. Concerns have largely focused on their astronomical gains in value and the likelihood of painful price crashes. Equally perilous, though, are the exchanges where virtual currencies are bought, sold and stored. These exchanges, which match buyers and sellers and sometimes hold traders' funds, have become magnets for fraud and mires of technological dysfunction, a Reuters examination shows, posing an underappreciated risk to anyone who trades digital coins. Huge sums are at stake.
there is no accounting for... accounting.
if this is supposed to be a new economy, how come they still want my old fashioned money?
dont keep money you arent trading on an exchange.
i thought everyone knew that, obviously not. Those who do not learn history are doomed to repeat it. MtGox says hello.
The problem with slashdot is that most of its users were bullied and stuffed into lockers as kids!
"and lodged them in escrow at a company running a cryptocurrency exchange called Moolah"
So they stuck them in a unregulated bank from some guy no one has heard of and the bank was robbed. Blame the currency! If they would have kept them in their own wallet, not some guys basement, they would have been fine.
Can't you do everything from your digital wallet on your computer, except convert to real cash ? Sorry, I never got on the cryptocurrency bandwagon.
Non-Linux Penguins ?
If you want to invest in something that is shiny and tangible, invest in gold and silver. The actual metal and not paper shares. People who own paper shares don't know that the supply of paper shares is greater than the tangible supply of gold and silver. Like bit coin, paper shares will eventually collapse.
The first mistake was putting the BTC in escrow on a cryptocurrency exchange. The second mistake was leaving it there. Did no one teach these people about digital wallets?
Do your research on cryptocurrency before getting involved in it, people!
Seriously, part of the point of bitcoin is that you can do transactions from your own bitcoin wallet. Why do we still have otherwise-intelligent people handing bitcoins worth millions of dollars to a random dude who set up a website on the internet?
If you had three million dollars in cash and a random guy you met on a street corner promised that if you gave it to him, he'd give it back to you in a few months when you need it... would you really hand it over and then be shocked when you couldn't find that guy again when you wanted your money back?
The only reason to ever give bitcoins to an exchange is that you're converting them to cash (or to another cryptocurrency), and in that case you should hand over only what you want to exchange.
I've never heard of Moolah, which is the first red flag in entrusting a $3million pile of digital cash to them.
The whole point of BTC is to cut out middlemen. Like cash, you hand a wad over to someone and they can do whatever they want with it. Why would you give your wad of cash to someone? What the fuck do you think is going to happen if that guy runs off with your cash?
If you want to hand over a wad of digital cash to someone, use a bank like a normal person. Put your BTC in cold storage in a safety deposit box. This is asset security 101. The fact that these people managing millions of $ in assets don't know the first thing about securing cash is both laughable and sad.
You need to read some Marco Polo and see what life was actually like trying to trade across continents in his day. His party literally sewed gems into their clothing to avoid tolls and thieves.
Hint: there's a reason we have governments with police powers. Radical libertarians are crazy.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
Only ever store your bitcoins in the official wallet.
I hate all this constant stream of FUD in regard to crypto currencies. Fiat money can be stolen as well and it happens all the time, yet /. rarely if ever features such articles.
Every passing week brings at least five news pieces featuring five new prominent economists/advisors/CFO/etc. who all declare that Bitcoin is either a bubble or a Ponzi scheme.
We've all heard that Bitcoin is a fraud at least a thousand times already. Now leave it alone please. People who trade bitcoins or invest in bitcoins perfectly understand their risks. It's true that bitcoin's worth is basically zero unless the market agrees that it has a different price. The market has decided that it costs ~$4200 at the moment. It's true that Bitcoin might become worthless tomorrow. If you think otherwise you need to get a shot of common sense.
Can't you do everything from your digital wallet on your computer, except convert to real cash ?
Pretty much, if you run a full node on your own system the only way to lose your money would be if your system got compromised.
Which is why you don't run the bitcoin wallet software on your regular computer. You take an old obsolete computer, install Linux on it, install the wallet software on it, and use that machine only for:
(1) Linux software updates.
(2) Bitcoin software updates.
(3) Running the bitcoin software.
(4) Bitcoin transfers.
(5) Copying the bitcoin wallet to USB sticks for backups.
The longer-term the investment, the stupider it is.
Bitcoins should only be on an exchange for that brief moment where you exchange them for a different coin or a real currency. No Bitcoin is not a currency, not yet, likely never. It is an asset that can fluctuate wildly in value. Bitcoin is a convenient way to transfer money globally (fiat1 -> bitcoin -> transfer -> fiat2). It is also a highly speculative investment vehicle. Don't let yourself be fooled into believing otherwise.
Will bitcoin be around in a few years, probably. Will bitcoin be at a higher price in a few years, maybe, maybe not. Will bitcoin be around in a couple decades, possibly not, it has various technical flaws and may be replaced by a better cryptocurrency. Will blockchain technology be around in a couple of decades, most likely, but blockchain is separate from bitcoin, bitcoin is just one of many users of blockchain technology.
Blockchain is like the internal combustion engine, bitcoin is like a particular make and model car. Keep this in mind if you want to speculate.
I never had the impression BTC was supposed to be secure, it was supposed to be universal and free of centralized control. Certain aspects of it have security certainly, but who promised BTC in general would be "secure"?
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Like the huge sums of money that come in my Monopoly board game?
love it when the greedy get bitten. 1849. Live the dream. Again. Miner miner 49er.
The new silk road was paved with bitcoins. Read all about it in "American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road".
zed oh muh gawd. artem has dictated. we must obey and not talk bad about this. shyeah.
So some butthurt author wrote an article whining about BTC-E. I've got news for you. NOBODY in the bitcoin community trusted BTC-E. They were always the shady exchange and nobody with a brain used them. All the other major exchanges have been around for years with little to no incidents. So the moral of the story actually is do some damn research before choosing an exchange and all the rest are safe. This is such a FUD article I can't even believe it.
Hello, random stranger on the internet. Here is a stack of untraceable currency worth $3 million. Please don't run away with them.
My point is they obviously did near-zero research. There are plenty of well-known reasonably trusted BTC exchanges. This is what happens when incompetent people come into money through luck rather than hard work or intelligent action.
Well that's completely non sequiter.